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MR. JUSTICE CASTLES,
delivered the Opinion of the Court.
This is an appeal by Interstate Products Company, a corporation, hereinafter referred to as “Products” or appellant, from a judgment entered against it awarding the respondent, Interstate Manufacturing Company, a corporation, $77,695.20 as damages for loss of profits due to the alleged breach of a contract between the two companies. Interstate Manufacturing Company will hereinafter be referred to as the respondent or “Manufacturing”.
This action plus another action by the same plaintiff against the same defendant for money had and received were consolidated for trial, by the Honorable James D. Freebourn, sitting as judge in the eighteenth judicial district, Gallatin County, Montana. The trial was held without jury. The court below dismissed the action for money had and received, and that judgment is not appealed. However, in the action for breach of an alleged contract, an order finding facts and conclusions of law in favor of the respondent was entered and a judgment was rendered thereon in favor of the respondents.
On October 10, 1946, Interstate Products Company was incorporated for the purposes of mining asbestos ore. One of the principal incorporators of this company was C. A. Lester who became a director of the corporation, and by action of the board of directors, President. Lester’s wife, Mabel, later became a director and Secretary-Treasurer of the corporation.
C. A. Lester became the owner of 21 lode mining claims and two mill sites located near Karst, approximately thirty miles south of Bozeman. In consideration for the transfer of stock in “Products” to him, C. A. Lester sold the rights in these claims to “Products”. The company’s mining operations were to take place upon these claims.
On November 24, 1950, Interstate Manufacturing Company was incorporated for the purposes of producing asbestos out of asbestos ore. The capital stock in this corporation was subscribed to by C. A. and Mabel Lester and one E. F. Bunker. These three became directors of the company and later President, Vice President, and Secretary-Treasurer of the corporation respectively.
On April 10, 1956, the two corporations entered into a contract, the alleged breach of which, and consequent loss of profits to respondent, is the subject of this suit.
The pertinent portions of the contract are as follows:
“The party of the first part further agrees to deliver to the party of the second part, asbestos ore at the average rate of at least forty tons per operating day or more as may be mutually agreed upon at the party of the second part’s manufacturing building at 204 South Wallace Avenue in Bozeman, Montana; and the party of the second part agrees to pay therefor as follows:
“The party of the first part further agrees to deliver to party of the second part, asbestos ore at the average rate of at least forty tons per operating day or more as may be mutually agreed upon at the party of the second part’s manufacturing building at 204 South Wallace Avenue in Bozeman, Montana; and the party of the second part agrees to pay therefor as follows:
“Thirty Dollars per ton by paying Fifteen Dollars in cash and Fifteen Dollars per ton in common stock of the party of the second part until it has paid 49 percent of the share of common stock in said Interstate Manufacturing Company at the rate of Fifteen Dollars per ton and thereafter, to pay the party of the first part Thirty Dollars per ton cash for all ore delivered to them.
“The party of the first part further agrees to deliver to the party of the second part at least forty tons per day of asbestos ore from the Karst Mines, the same to be computed on the basis of annual averages and upon orders therefor by the party of the second part at the above said agreed price of Thirty Dollars per ton delivered at the second party’s present mill building plant, at and when the party of the second part shall so designate.”
Because of the fact that the business records of both companies were lost during the course of an audit, we have very little evidence as to how the two companies operated under the contract. In order to avoid repetition, we will review that evidence when we decide whether the contract was actually breached.
On May 6, 1958, C. A. Lester died. Mr. Bunker, who had become a director and vice president of both corporations, had died previously. It was at this point, when new people entered into the control of both corporations, that the trouble between the two corporations began to develop.
On May 16, 1958, Mabel Lester appointed one Glen Allman, as director of “Manufacturing”. These two directors elected Bernard Goosen as director, whereupon Mrs. Lester resigned her position in respondent corporation. Allman and Goosen then elected Oscar Huso as a director. These directors became President, Vice President and Secretary-Treasurer respectively of “Manufacturing”.
On May 31, 1958, a meeting of the Board of Directors and some stockholders in “Products” was held. Doyle Potts, who had previously become a director of that corporation, was made acting president. Potts was later elected to this position by the stockholders of “Products” on September 9, 1958.
In May of 1958, the directors of “Manufacturing” became concerned as to the validity of the claims to the property which had been transferred by C. A. Lester to “Products.” Allman and the other officers of “Manufacturing” entered upon the claim with the intention of securing the title to the claims and then transferring this title apparently to the stockholders of “Manufacturing”.
Potts, fearing some attempt at “claim jumping,” gave orders to the guards at the mining property that no one was to be let upon the property.
On August 8, 1958, a plant foreman of “Manufacturing” ordered a truck to be sent to the mines to pick up some ore. The truck had no loading equipment, and the mine did not either.
The watchmen at the mine, acting under Potts’ previous orders to prevent claim jumping, ordered the truck off the property.
It is this refusal to load ore onto the truck which respondents contend constituted the breach of the contract in question.
The court below after hearing the evidence determined in its findings of fact and conclusions of law that there had been a valid contract between the two parties; that the contract was breached by the failure to load up the truck; and that as a result of this breach respondent suffered a loss of profits.
Appellants present to this court three arguments as to why the judgment based upon the findings of fact and conclusions of law should be reversed. These are : (1) that there was no valid agreement between the two parties; (2) that if there was a contract, there was no breach of it; and (3) even if there was a breach, the damages were not supported by evi dence and were so remote and speculative that they could not be awarded.
Appellant is correct in pointing out that in a long line of decisions, this court has held that we will not disturb the trial court’s findings unless there is a decided preponderance of evidence against these findings. Larsen Farms v. City of Plentywood, 145 Mont. 509, 402 P.2d 410; Kosel v. Stone, 146 Mont. 218, 404 P.2d 894; Hurly v. Hurly, 147 Mont. 118, 411 P.2d 359; Duffie v. Metropolitan Sanitary & Storm Sewer Dist. No. 1, 147 Mont. 541, 417 P.2d 227; Studer Const. Co. v. Rural Special Impr. Dist. No. 208, 148 Mont. 200, 418 P.2d 865. We continue to adhere to this rule in our decision in the present case.
Though we tend to agree with the appellant that there was no valid contract between the two parties, we will not decide this point for the reason that we think there is a more obvious point upon which to base our decision.
Assuming arguendo that there was a valid agreement between the two parties, the record contains evidence which decidedly preponderates against the conclusion that there was any breach of that agreement.
A breach of a contract is defined as “a non-performance of any contractual duty of immediate performance * * Restatement of the Law of Contracts, § 312, p. 462. In order then to ascertain whether there was a breach in the present case it is first necessary to determine what duties were imposed upon the appellant under the contract.
The first of the pertinent paragraphs of the contract calls for the delivery by the appellant to the respondent of ore “at the average rate of at least forty tons per operating day.” (Emphasis added.) We will assume that this provision was modified by mutual consent to call for the delivery of only twenty tons.
At first blush it would seem that this paragraph imposes ■an automatic duty upon the appellant, to deliver the ore, with out the necessity of any order by the respondent, and that his failure to do so put him in breach of the eontracct.
The problem though is that the contract calls for the delivery of the ore every “operating day.” We must first determine the meaning of the term “operating day” to see whether any breach occurred.
Though the contract itself gives no clue to the meaning of the term, and we are unable to find any authority defining this term we conclude that in relation to this particular contract the term means any day in which respondent’s plant is operating in accordance with its purpose as expressed in the articles of incorporation, namely the carrying on of “the business of purchasing, milling, concentrating, converting, separating, treating, and preparing for market, manufacturing, buying, selling, exchanging, and otherwise producing” asbestos.
The evidence as presented not only fails to establish what the number of operating days left during the term of the contract would be, but also preponderates against the conclusion that the respondent had had any “operating days” in the past. Therefore the term is so vague and meaningless as to impose no duty upon the defendant, and thus not leave him in breach of this particular paragraph of the contract.
The minute entries of respondent corporation, the only surviving business records of the corporation, indicate that up until 1953 the corporation was still not operating commercially and that preparations were still under way to try to get the plant in production. The minute entries are silent as to what transpired from 1953 until May of 1958. The minute entries indicate that the mill was shut down on August 5, 1958, three days before the incident which constituted the so-called breach of the contract occurred.
The testimony of Mrs. C. A. Lester also indicates that the company had experienced trouble in getting into production and that it was not a going concern at the time of the alleged breach. Mrs. Lester testified that the company was having difficulty perfecting the machinery in order to produce a commercial grade of asbestos. She also testified that as late as 1958, the year of the alleged breach, the company was still remodeling the mill.
As a matter of fact, the words “per operating day” as used in the contract were never established as a basis for any delivery. Having failed to establish that respondent company had had any “operating days” in the past, or would have any during the remaining period of the contract, no duty was placed upon the appellant by this provision, and hence there was no breach of it.
The third paragraph of the contract quoted above calls for delivery of ore to respondent’s mill “upon order” of the respondent. There were no orders. The sending up of a truck to get some ore from the mine does not fulfill the requirements of an order under the contract. Consequently the appellant breached no duty under this paragraph of the contract either.
For the reason that there was no breach of the contract the award of damages by the court below was erroneous.
The judgment is reversed, and the cause is dismissed.
MR. JUSTICES HASWELL, ADAIR, JOHN CONWAY HARRISON, and THE HONORABLE LeROY L. McKINNON, District Judge, concur.
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MR. JUSTICE FREEBOURN:
This action is one for malicious prosecution wherein plaintiff, Alice Rickman, secured verdict and judgment against the defendant, Safeway Stores, Inc., a corporation. The action was dismissed as to the defendant, Daly Bank & Trust Company of Anaconda, a corporation, on plaintiff’s motion at the close of plaintiff’s case in chief.
Plaintiff, in her complaint alleged: That the defendants, on September 29, 1948, at the city of Anaconda, in Deer Lodge county, Montana, maliciously and without probable cause, procured and caused a criminal complaint to be filed in the justice court of Bast Anaconda township, charging plaintiff with the crime of “uttering a fraudulent check,” resulting in the issuing of a warrant of arrest for plaintiff and her arrest thereunder by a constable, who took her before a justice of the peace; that the criminal complaint was then dismissed; that plaintiff suffered injury therefrom; and asked that plaintiff be awarded actual damages and damages by way of punishment and example.
General demurrers by all defendants were overruled and they answered separately.
Answers of the corporate defendants consisted of admissions of corporate capacity and denials of other allegations of the complaint.
Answer of defendant, Mary A. Milkovieh: Admitted the filing of the criminal complaint and issuance of the warrant of arrest; denied other allegations of the complaint and alleged a separate defense wherein it was alleged: she was “well and truly acquainted with Alice Rickman, the plaintiff,” who bought groceries from defendant, a clerk and employee of Safeway Stores ,• that plaintiff gave in payment for such groceries a check which was returned by the defendant bank after presentation for collection, accompanied by the statement there “was no account in the bank in the name of Alice Rickman; ’ ’ that believing such fact to be true defendant went to the county attorney’s office and “gave a full and complete statement of all the facts of the case” to and was advised by the county attorney “to sign and file a complaint against the said Alice Rickman;” that “the said complaint was prepared and signed by this defendant, Mary A. Milkovich; ’ ’ that she had just cause and reasonable grounds for believing plaintiff guilty of the crime charged and acted in good faith and without malice.
The allegations of this defense were placed in issue by plaintiff’s reply.
The trial jury’s verdict was in plaintiff’s favor and against the defendant, Safeway Stores, Inc., awarding plaintiff actual damages in the sum of $2,000 and damages by way of punishment and example in the sum of $1,000.
Motion for new trial was denied and this appeal followed.
Plaintiff’s case in chief disclosed that plaintiff, as Alice Rickman, and Fred F. Hites (husband and wife at the time of trial, December 9, 1949) opened a joint account with the defendant bank on July 21, 1948. This account was in existence and had a cash balance of $274.68 on September 10, 1948. Money could be withdrawn from this account by cheek signed by Alice Rickman or Fred F. Hites.
On September 10, 1948, Alice Rickman delivered her check for $15, payable to Safeway Stores, to Mary A. Milkovich, Safeway Stores clerk, in payment for groceries. The check was good as shown by bank records.
For a year prior to the giving of the check, Alice Rickman and Fred F. Hites had been customers of the Safeway Stores. They customarily visited the store on Mondays, where Hites would cash his weekly check and groceries would be purchased.
On October 1, 1948, plaintiff was arrested on a warrant issued in a judicial proceeding in a justice court. Such proceeding was instituted on September 28, 1948, by the filing of a criminal complaint signed by the Safeway Store employee, Mary A. Milkovieh. The criminal complaint charged Alice Rickman with being guilty “of the crime of ‘uttering a fraudulent check’,” in that she did on September 10, 1948, “with intent to defraud Safeway Stores, Inc., make, and draw and utter and deliver a check in the amount of Fifteen and no/100 ($15.00) Dollars on the Daly Bank and Trust Company of Anaconda, Anaconda, Montana, knowing at the time of such making, drawing, uttering and delivering that she had not sufficient funds in, or credit with such bank for the payment of such check, a misdemeanor * * *”
Taken before the justice of the peace plaintiff pleaded not guilty. Later the proceedings were dismissed and plaintiff released.
Evidence of damage to plaintiff from the institution of such justice court proceedings was introduced.
General demurrers of defendants,- Safeway Stores, Inc., a corporation, and Mary A. Milkovieh, to the complaint were properly overruled. The complaint stated a cause of action for, and plaintiff’s evidence made a prima facie case of malicious prosecution.
The complaint alleged and the evidence tended to prove: (a) That a judicial proceeding was commenced and prosecuted against plaintiff; (b) that the defendants, Safeway Stores, Inc., and Mary A. Milkovieh, were responsible for instigating such proceeding; (c) that there was want of probable cause for defendant’s action; (d) that defendants were actuated by malice; (e) that the proceedings terminated favorably to plaintiff; and (f) that plaintiff suffered damage. Stephens v. Conley, 48 Mont. 352, 138 Pac. 189; Johnson v. Horn, 86 Mont. 314, 283 Pac. 427; and Cornner v. Hamilton, 62 Mont. 239, 204 Pac. 489.
Plaintiff, innocent of any wrong, had been charged with the crime of passing a worthless check, although the check was good, with ample funds in the.bank to cover it. No. justification existed for filing such- criminal charge. Probable cause, or such a state of facts and circumstances, as would lead a careful and conscientious man to believe that plaintiff was guilty, was lacking.
“All the books agree that the plaintiff must prove both want of probable cause and malice, and that, where the absence of the former is established, the presence of the latter may be inferred. In other words, when the proof tends to show the absence of the former, a -prima facie case is made for the jury. The burden then rests upon the defendant to rebut this prima facie case; and this he must do by any evidence tending to show the existence of- probable cause and the want of malice on his part. Probable cause, however, is not to be confounded with actual guilt. The latter must always be established by proof beyond a reasonable doubt, while ‘probable cause is only such a state of facts and circumstances as would lead a careful and conscientious man. to believe that the plaintiff was guilty. ’ Barron v. Mason, 31 Vt. 189.” Martin v. Corscadden, 34 Mont. 308, 86 Pac. 33, 36; Grorud ,v. Lossl et al., 48 Mont. 274, 136 Pac. 1069; Saner v. Bowker, 69 Mont. 463, 222 Pac. 1056; Cornner v. Hamilton, supra; and Puutio v. Roman, 76 Mont. 105, 245 Pac. 523.
The filing of such criminal charge was a wrongful act which would not only vex and annoy plaintiff but did injure her. It was a malicious act. “The words ‘malice’ and ‘maliciously’ import a wish to vex, annoy, or injure another person, or an intent to do a wrongful act, established either by proof or presumption of law.” R. C. M. 1947, sec. 19-103, subd. 18.
The institution of such criminal prosecution was voluntary on the part of Mrs. Milkovich. She intended, by so doing,' to vex, annoy and injure plaintiff; for the law presumes “That a person intends the'drdinary consequence of his voluntary act.” R. G. M. 1947, sec. 93-1301-7, subd. 3.
Corporations, of necessity, act through individuals. Mary A. Milkovich, employee of Safeway Stores, wrote in the body of the check, witnessed plaintiff sign it approved and accepted it •upon her own responsibility. She gave Safeway Store groceries and cash for the check. She knew plaintiff and could identify her. She could give the authorities all the facts pertaining to the check transaction. Mrs. Milkovich would be the principal witness against plaintiff in a criminal prosecution and was the logical person to sign the criminal complaint on behalf of Safeway Stores. Her action was the action of Safeway Stores.
The facts and circumstances made a case warranting the conclusion that the prosecution was commenced on behalf of Safeway Stores, through its employee and agent, Mrs. Milkovich, acting within the apparent scope of her authority.
The rule is laid down in Grorud v. Lossl, supra [48 Mont. 274, 136 Pac. 1071], where this court said: “ It is settled law that an action for malicious prosecution will lie against a corporation as well as against a natural person. (Citing cases.) By the great weight of authority it is also the rule that when an agent of a corporation in the course of the discharge of duties intrusted to him by it, and within the apparent scope of his authority, does an act from which a third person suffers injury, the corporation also is liable for the damages flowing therefrom, even though the agent may have failed in his duty to the principal, or may have disobeyed his instructions. (Citing cases.) If the act is prompted by fraudulent or malicious motives, the fraud or malice of the agent is imputable to the corporation.” See also, 54-C. J. S., Malicious Prosecution, sec. 64, p. 1032.
Defendants’ evidence showed that the $15 check, signed by Alice Bickman, was returned to Safeway Stores by the bank, with a notation indicating she had no account in such bank.
At this time neither Mrs. Milkovich nor the store manager, Mr. Walters, appeared to believe plaintiff guilty of any wrong connected with the check. No complaint was then made to the county attorney or other authority. Three weeks elapsed before any action was taken. Mrs. Milkovich testified: “I took the respon sibility of knowing these people [Alice Rickman and Fred F. Hites], they having come there for over a year. * * * I told him [the store manager] I would watch for her from that time and I would approach her and tell her the check came back and was no good. I did; just about three weeks I waited for her to come in ***".
Plaintiff testified she was in the store several times during this period.
Then Mrs. Milkovieh and the store manager, separately, made one trip to an address where they believed plaintiff lived. They did not find plaintiff. The store manager’s express purpose in making his trip was, as he said, “to collect the money.”
No effort was made to contact plaintiff by mail. The bank was not called upon to verify its notification that plaintiff had no account. No attempt was made to locate Hites although Mrs. Milkovieh knew he worked for the Anaconda Copper Company and she believed plaintiff and Hites were husband and wife. Mrs. Milkovieh’s testimony was:
“Q. Did you, or anybody under the direction, or anybody ■ you know at all, in' connection with the Safeway Store, ever call the A. C. M. Company to see if Mr. Hites was still working ? A. No.
“Q. But you did know he had worked there? A. Yes, but I never did inquire.” She said further: “I have waited on both Miss Rickman and Mr. Hites for nearly a period of a year. * ~ * I always presumed they were husband and wife. I did know Mr. Hites’ name because he used to cash his check every Monday; * * * his pay check * * * from A. C. M. Company.”
With all of the evidence in, it appeared, even though the bank had indicated the check was not good, that reasonable investigation on the part of the store clerk and manager, with the knowledge they had, would have disclosed the cheek was good. Such investigation was not made.
“The failure of a person who has received information tending to show the commission of a crime to make such further inquiry or investigation as an ordinarily prudent man would have made in the same circumstances, before instigating a proceeding, renders him liable for proceeding without probable cause.” 34 Am. Jur., Malicious Prosecution, sec. 51, p. 735. See note in 5 A. L. R., p. 1688, citing Federal, California, Illinois, Indiana, Iowa, Louisiana, Michigan, Minnesota, Missouri, Nebraska, New York, Ohio and Pennsylvania eases.
After the unsuccessful trips to locate plaintiff by herself and the store manager, Mrs. Milkovich went to the county attorney’s office. Her purpose in going was the same as motivated the store manager in seeking plaintiff, to “collect that money.” As she put it, while on the witness stand, to secure “a warrant— a complaint, so that I could collect that money. ’ ’
“If one makes use of the criminal law for some collateral or private purpose and not to vindicate the law, such proceeding will be considered malicious, and this principle has been held applicable where it is shown that the sole purpose of the prosecution is to enforce the payment of a debt * * *.” 54 C. J. S., Malicious Prosecution, sec. 42, p. 1006.
“So also, malice in a criminal prosecution exists where the prosecution was actuated by any improper motive — that is, by any motive other than that of bringing the accused to justice.” 34 Am. Jur., Malicious Prosecution, sec. 45, p. 729.
The collection of the money wks to be made for Safeway Stores. Although Mrs. Milkovich’s answer alleged she told plaintiff when the check was accepted she “would guarantee payment of the same to her employer, Safeway Stores, Inc.,” the record is barren of any evidence supporting such allegation. There is no evidence the amount of the cheek was withheld from her wages or that she was compelled or was expected to make the amount of the check good. Her actions and words did not indicate she was collecting her own money.
These facts, with other hereinbefore set forth, were sufficient to justify the conclusion that in commencing the criminal prosecution, Mrs.. Milkovich. was acting within her authority solely on behalf of Safeway Stores.
Since the evidence, as a whole, disclosed the criminal complaint was signed and plaintiff was prosecuted without probable cause and maliciously, motions of defendants Mrs. Milkovich and Safeway Stores for directed verdicts were properly denied.
The defense that the criminal prosecution was instituted upon the advice of the county attorney was not supported by evidence. He did not' advise Mrs. Milkovich in the matter. When asked if she had talked to the county attorney, Mrs. Milkovich’s answer was “No.” Further testimony on her part was:
“Q. And did he.ever advise you at all on this matter? A. No. I didn’t get to see him, so I explained everything to Miss Finnegan [county attorney’s stenographer] and asked her if she would fix the warrant-complaint so that I could collect that money. ’ ’
Mr. Ruane, the county attorney, testified: “My secretary, Miss Finnegan, came into the office. * * * She stated that Miss Milkovich had informed her one Alice Rickman had given the check to Safeway, that the check had come back from- the bank, indicating there was no account. Upon that information and viewing the check, I instructed her to prepare the complaint. ’ ’
Appellant, asserting the record affirmatively, establishes that Mary A. Milkovich was not authorized to sign the criminal complaint, contends there was no ratification of her acts as would impute malice to the defendant corporation. Jones v. Shannon, 55 Mont. 225, 175 Pac. 882, 885, is cited in support of this contention. In that case the defendant sought to be bound by the act of another was an individual, not a corporation. The court, recognizing this difference, said: “ It is true that we held in the case of Grorud v. Lossl, 48 Mont. 274, 136 Pac. 1069, that the malicious motives of an officer of a corporation while acting in its behalf are imputable to the corporation. We also held in the ease of Burles v. Oregon Short Line Ry. Co., 49 Mont. 129, 140 Pac. 513, Ann. Cas. 1916A, 873, that a corporation is liable in exemplary damages for the willful and malicious acts of one of its servants. A corporation, however, is an artificial person, and can only act through agents; and if the malignant motives of the agent are not imputable to it, it would necessarily follow that it could not be held liable for the malicious acts of its agents in any case. The corporation cannot, as a natural person, participate in any maliciously' wrongful act, and it is not to be supposed that the board of directors — the executive body of the corporation — would by a formal resolution authorize such an act or by the same method ratify it. In the Grorud Case, the president of a corporation had instituted a baseless criminal prosecution against the plaintiff for the alleged theft of money of the corporation. If the malice of the president could not be imputed to the corporation, it could not have been held liable at all, and the only recourse of the plaintiff would have been against the president. In that case the question of exemplary damages did not arise.
“In the case of Burles v. Oregon Short Line Ry. Co., however, it was distinctly held that, where the act of the servant was prompted by a willful disregard of the rights of the plaintiff, his motive was properly imputable to the company. A natural person can act for himself, and therefore the malignant motive of another should not be imputed to him unless, under the rule of the cases cited above, he directly or indirectly authorized or subsequently ratified the wrongful act. It seems to us that, whatever may be assigned as the foundation for it, a clear distinction is to be recognized between a corporation and a natural person, when we come to fix responsibility for the acts of their agents. ’ ’
The collection of the money was a common purpose, as shown by the evidence of both Mrs. Milkovich and the store manager. He gave Mrs. Milkovich the check on which the criminal complaint was based to take to the county attorney’s office. He did not object to Mrs. Milkovich waiting until plaintiff came into the store to contact plaintiff about the check. He knew all the facts. He did not discharge Mrs. Milkovich. It was made clear by defendant’s evidence that, although she had left Safeway Store’s service between the time of the criminal proceedings and the trial of this cause, such leaving was of her own volition. He did not reprimand her for. filing the criminal complaint. She filed the complaint to collect the money. The store manager collected it, collected it after the criminal proceedings were dismissed.
These facts show ratification of Mrs. Milkovich’s acts sufficient to make Safeway Stores liable for actual and punitive damages, even though it be said that Mrs. Milkovich was without the scope and authority of her employment when she instituted the criminal proceedings. See, 15 Am. Jur., see. 288, p. 730; sec. 289, p. 731; and see. 292, pp. 734 and 735.
Appellant’s contention that the dismissal of the criminal proceedings resulted from a compromise whereby plaintiff redeemed the check as a consideration for such dismissal is not borne out by the evidence. It appears that when plaintiff was arraigned before Justice of the Peace Sestrick, she said the check was good and offered her bank book showing a balance in her account. The justice of the peace relayed such facts to the county attorney, who, after contacting the bank, told the justice to ‘ ‘ dismiss that criminal complaint against the lady, as the money is on deposit at the bank. ’ ’
‘ ‘ Q. What did you do then, Judge Sestrick ? A. I dismissed the case against Miss Rickman upon the request of county attorney Ruane * * *
“Q. It was completely dismissed? A. That’s right; it was dismissed.” The dismissal was on October 1, 1948. The $15 was paid to the manager for the cheek on October 10, 1948. According to plaintiff this was done because Judge Sestrick advised, “Better pay it and keep the check for evidence.” This she did.
The court did not err in giving instruction No. 6 to the jury. It was a correct statement of the law on the facts existing in the case. That it, as appellant puts it, “overlooks the question of course of employment on the part of Mary A. Milkovich,” did not vitiate it. Such question was covered by instruction No. 14, given by the court. Appellant requested no other instruction covering this phase of the law.
Rehearing denied March 1st, 1951.
We have carefully examined all other assignments of error and find no merit in them. The jury was fairly instructed and the case well tried by the court and counsel on both sides.
The verdict for plaintiff was not excessive.
As said in Fauver v. Wilkoske, 123 Mont. 228, 211 Pac. (2d) 420, 423, quoting from Cornner v. Hamilton, supra, “ ‘It was proper for the court to instruct the jury in this case on the subject of the allowance of the exemplary damages, and proper for the jury, under the evidence, to allow the same (citing cases), and in this class of cases it is wholly within the province of the jury to fix the amount of damages to be awarded compensatory, as well as exemplary; and, unless its determination appears to have been influenced by passion, prejudice, or some improper motive, or unless the amount is outrageously disproportionate, either to the wrong done or the situation or circumstances of the parties, the court will not generally interfere with the verdict’.”
The motion for a new trial was properly denied. For the reasons stated, judgment of the district court is affirmed.
MR. CHIEF JUSTICE ADAIR and ASSOCIATE JUSTICES ANGSTMAN, BOTTOMLY and METCALF, concur.
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an appeal and cross-appeal from an order and memorandum of the Thirteenth Judicial District Court, Yellowstone County, granting petitioner’s motion for declaratory judgment, denying petitioner’s request for attorney’s fees, and finding petitioner’s request to void certain actions and for an injunction moot. We reverse.
Appellant City of Billings (City) raises the following issue:
1. Did the District Court err in holding that Article II, Section 9 of the Montana Constitution required that a meeting involving the Billings Public Works Director, the City Engineer, and individuals representing a private contractor and private engineering company be open to the public?
Cross-appellant SJL of Montana Associates Limited Partnership, d/b/a KTVQ (KTVQ), raises the following issues:
2. Did the District Court abuse its discretion in denying KTVQ’s request for attorney’s fees pursuant to § 2-3-221, MCA?
3. Although the District Court determined that KTVQ’s request for an injunction was moot, does the controversy continue under the standard “capable of repetition, yet evading review?”
Because of our resolution of issue one, we need not address issues two and three.
On May 22, 1992, a meeting was held in the office of the Public Works Department for the City of Billings. City Engineer Kurt Corey (Corey), Public Works Director Ken Haag (Haag), and representatives of Empire Sand and Gravel and Engineering Incorporated attended. No members of the city council were present. The purpose of the meeting was to discuss the problems and concerns surrounding the delays in construction on 27th Street in Billings (the 27th Street project) and how to keep the surrounding property owners better informed. No new contracts were entered into and no amendments to the existing contracts were made.
Brian Michael (Michael), a reporter from KTVQ, learned of the meeting on May 20th while following up on a tip that there was a dispute between the City and Empire Sand and Gravel. Corey told him that the press would not be allowed into the meeting because it was a “staff meeting,” and that Empire Sand and Gravel did not want the media there. Michael was denied access because the City Attorney had advised Haag that the meeting need not be open to the public.
On May 22, 1992, KTVQ petitioned the District Court for a declaratory judgment and injunctive relief as follows: 1) declaring the right of a KTVQ reporter to attend the ongoing meetings concerning the 27th Street project; 2) requiring the City to release public records, including the plans and amendments for the 27th Street project; 3) voiding any actions taken at the May 22nd meeting; 4) enjoining further meetings unless the reporter was allowed to attend; and 5) requiring the City to pay KTVQ’s attorney’s fees as provided for in § 2-3-221, MCA.
That afternoon the District Court granted a temporary restraining order enjoining the City and its subdivisions from prohibiting a KTVQ reporter from attending further meetings between the above parties, and the court set a hearing on the petition for June 3rd. Michael was allowed to attend a meeting between the same parties held on May 29th at a local restaurant. After the May 22nd meeting he was also given access to certain documents he had requested.
After the hearing, the District Court allowed the parties time to brief the issues. On July 9th, the court entered an order and memorandum determining the following:
1. KTVQ’s request to void the acts taken at the May 22nd meeting was moot as no action was taken;
2. KTVQ’s request to enjoin the City was moot because the reporter had been allowed to attend later meetings;
3. KTVQ was entitled to a declaratory judgment that it had a constitutional right to attend meetings between the above individuals regarding the 27th Street project; and
4. KTVQ’s request for attorney’s fees must be denied.
We begin by pointing out that this case does not involve a “staff meeting” as the City has attempted to characterize it in the proceedings in the District Court and in this Court. During a hearing on this matter, the District Court and the City Attorney engaged in the following discussion:
MR. TILLOTSON: Certainly it was a scheduled meeting. We have many scheduled staff meetings.
THE COURT: Well, now, define a staff meeting.
MR. TILLOTSON: Staff meeting is a meeting attended by governmental employees.
THE COURT: But not members of the public?
MR. TILLOTSON: That’s correct, Your Honor.
THE COURT: Wasn’t this a meeting between staff and members of the public?
MR. TILLOTSON: Yes, it was.
By the City’s own admission, this was not a “staff meeting.”
I
Does Article II, Section 9 of the Montana Constitution require that these particular meetings be open to the public?
Article II, Section 9 of the Montana Constitution provides:
Right to know. 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.
The Montana Constitution is to be given a “broad and liberal interpretation ...” Arps v. State Highway Comm’n (1931), 90 Mont. 152, 160, 300 P. 549, 553, quoted in Board of Regents v. Judge (1975), 168 Mont. 433, 443, 543 P.2d 1323, 1329. In addition, this Court recently held that:
While the legislature is free to pass laws implementing constitutional provisions, its interpretations and restrictions will not be elevated over the protections found within the Constitution.
In re Lacy (1989), 239 Mont. 321, 325, 780 P.2d 186, 188.
The provisions of Article II, Section 9 are implemented by the open meeting laws, §§ 2-3-201 et seq., MCA. Flesh v. Board of Trustees of Joint School Dist. #2 (1990), 241 Mont. 158, 164, 786 P.2d 4, 8. Thus, the initial question before us is whether the open meeting laws, §§ 2-3-201 et seq., MCA, require the meeting at issue to be open to the public. If so, we need go no further because it will be clear that the City violated these laws in refusing Michael’s request to attend. If not, we must examine whether the statutes implementing the constitutional right to know are unduly restrictive of Article II, Section 9.
Under the open meeting laws,
[a]ll meetings of public or governmental bodies, boards, bureaus, commissions, agencies of the state, or any political subdivision of the state or organizations or agencies supported in whole or in part by public funds or expending public funds must be open to the public.
Section 2-3-203, MCA. The legislature’s intent, clearly expressed in § 2-3-201, MCA, is that
[a]ctions and deliberations of all public agencies shall be conducted openly. The people of the state do not wish to abdicate their sovereignty to the agencies which serve them. Toward these ends, the provisions of the part [open meeting laws] shall be liberally construed.
The meeting at issue was attended by City Engineer Corey, Public Works Director Haag and private persons. It is clear that the meeting was not one of a public or governmental body, board, bureau or commission. Thus, the only manner in which the meeting might fit within the parameters of § 2-3-203, MCA, is if it can be properly construed as a meeting of a public agency.
The term agency is defined in Part 1 of Title 2, Chapter 3, MCA. That part implements Article II, Section 8 of the Montana Constitution, which provides for the public’s right to participate in government operations. However, when a word is defined in the code, that definition is applicable to other parts of the code except where the contrary is plainly indicated. Section 1-2-107, MCA; Department of Revenue v. Gallatin Outpatient Clinic (1988), 234 Mont. 425, 430, 763 P.2d 1128, 1131.
Agency is defined in § 2-3-102, MCA, as “any board, bureau, commission, department, authority, or officer of the state or local government authorized by law to make rules, determine contested cases, or enter into contracts ....” The City argues that neither Corey nor Haag is a board, bureau, commission, department, or authority. Further, neither is authorized to make rules, determine contested cases, or enter into contracts. KTVQ does not dispute these assertions and, indeed, the record before us is clear that Corey and Haag are City employees who are not authorized to make rules, determine contested cases or enter into contracts. We conclude, therefore, that Montana’s open meeting statutes do not require the meeting between Corey, Haag and private persons to be open to the public.
The question remains, then, whether the statutes enacted by the Montana legislature to implement the public’s constitutional right to observe the deliberations of public bodies or agencies are unduly restrictive of that right. If so, those statutory interpretations will not be elevated over the protection found within the Constitution. Lacy, 780 P.2d at 188. Based on a careful review of the constitutional history, we must conclude that the statutory definition of agency is not restrictive of the public’s right to observe deliberations of public bodies and agencies as contained in Article II, Section 9 of the Montana Constitution.
The constitutional history reveals that Delegate Dorothy Eck introduced what ultimately became Article II, Section 9 of the Montana Constitution. Delegate Eck’s proposal, denominated Delegate Proposal No. 57, provided in pertinent part:
No person shall be deprived of the right to ... observe the actions and deliberations of all public officials or agencies ....
Montana Constitutional Convention 1971-72, Volume I, p. 157. It is clear that Proposal No. 57 was very broad in scope. It applied to actions and deliberations of all public officials and agencies (emphasis added).
Delegate Eck’s proposal was not adopted. Instead, the Bill of Rights Committee proposed Section 9, Right to Know, as it was finally passed by the Constitutional Convention and the people of Montana. Montana Con. Con., Vol. II, p. 621. There it was narrowed from the original scope so that it no longer applied to “actions” — even actions of public agencies; nor did it include any reference to “public officials” or any other individuals.
Referring again to the constitutional history, we are given significant insight into precisely what the constitutional framers intended when utilizing the term “public agency” in Article II, Section 9. We note here for clarity that the floor debate in the Constitutional Convention on Article II, Section 8, preceded the argument on Article II, Section 9, and that as a result most of the debate over the term “public agencies” is covered in that portion of the Convention transcripts.
The following remarks exemplify the thrust of the debate on “governmental agencies”:
DELEGATE DaHOOD: ... I ... urge all of the delegates to look at the term “governmental agencies”, which is the key to constructing that particular section.... Once again, I want to point out, we have in mind the governmental agencies that are miniature legislatures who put together rules and regulations that affect us all.
Montana Con. Con., Vol. V, p. 1664.
DELEGATE McNEIL: ... I think ... [governmental agencies] is what the committee intended to reach with this, and that is appointive commissions, bureaus, so forth ....
DELEGATE DaHOOD: ... [Governmental agencies that are not elected, that are appointed, that function to carry out the laws that are passed, are the ones, of course, that will enact rules and regulations and make the decisions that affect people ....
Montana Con. Con., Vol. V, p. 1667.
Nothing in these floor debate comments and explanations suggests that there was any intent to make “public agencies” synonymous with individual public employees. It is obvious from these and other remarks that the framers of the Constitution were concerned with governmental entities which had rule-making authority and regulatory powers.
This intent is even more clear when the Bill of Rights Committee’s comments on Article II, Section 9, are considered. The Committee specifically cited with approval then-existing § 82-3401, RCM (1947), which states that the legislative intent regarding open meetings; namely “that actions and deliberations of all public agencies shall be conducted openly.” Montana Con. Con., Vol. V, p. 1670. Section 82-3401, RCM (1947), subsequently recodified as § 2-3-201, MCA, also contained the legislative declaration of open meeting laws — as they existed both before and after the passage of the 1972 Constitution — applied to “public boards, commissions, councils, and other public agencies.” These are the kind of agencies that the delegates at the Montana Constitutional Convention included in Article II, Section 9.
We hold that, with regard to the meeting at issue here, Montana’s open meeting statutes do not restrict the public’s constitutional right to know. As a result, we hold that the District Court erred in ruling that Article II, Section 9 of the Montana Constitution requires that a meeting involving the Billings Public Works Director, the City Engineer, and individuals representing a private contractor and a private engineering company be open to the public. This opinion does not address, and shall not be construed as interpreting, the public’s right to examine documents as provided for in Article II, Section 9 of the Montana Constitution.
CHIEF JUSTICE TURNAGE, JUSTICES GRAY, McDONOUGH and WEBER concur.
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JUSTICE WEBER
delivered the Opinion of the Court.
This is an appeal from the Eleventh Judicial District, Flathead County, modifying the custody of two minor children. We affirm.
While the appellant charges thirteen different errors made by the court, we consider the following question which includes consideration of all issues raised:
Did the District Court abuse its discretion in modifying the custody of the two minor McDowell children?
The marriage of Wanda and Randy McDowell was dissolved in 1986, after five years of marriage. Two children, a girl and a boy, were born to the couple. At the time of the dissolution, Wanda McDowell was awarded custody and Randy was granted reasonable rights of visitation. At the time of the hearing on modification, the children were ages 7 and 9. Wanda has worked to a limited degree since 1980. Randy has been employed as a custodian and maintenance man for Flathead County for over eleven years.
Both Wanda and Randy re-married other people. Wanda married Jerry Harris and moved from Flathead County to Trego, Montana, in Lincoln County. Wanda and Jerry Harris separated in November of 1990, and she returned to Flathead County. Wanda testified that her children had told her that Jerry had sexually abused them. Wanda testified as to her belief that while she was in the hospital having the couple’s first child, Jerry involved both of the McDowell children in satanic rituals.
In January of 1991, Wanda sought counseling for the children based upon her belief that Jerry had sexually abused her children. The first counselor saw the children from January until June of 1991. In June, after indication that the children had been ritually abused, Wanda took the children to see a Missoula counselor. This counseling lasted several sessions at which time Wanda was advised by the counselor that she should find a facility which had special accommodations for children. Wanda then took her son to Rivendell Treatment Center in Butte. Wanda testified that she was dissatisfied with the treatment at Rivendell and because her son was expressing suicidal thoughts, she had him admitted to Shodair Hospital.
Wanda testified that she removed her son from Shodair Hospital after a short time because she believed that Hospital personnel had lied to her with regard to the Hospital’s expertise in dealing with ritually abused children. Shodair personnel testified that Wanda should not have removed her son from Shodair Hospital and such removal constituted a significant risk because of his predisposition towards suicide. Notwithstanding this advice from the personnel at Shodair Hospital, Wanda removed her son from the Hospital and then took him to Burley, Idaho where she had located a journalist whom she believed to be an expert in ritually abused children.
Before her trip to Idaho, Wanda sent Randy a letter saying that she had to disappear with the children for several years in order to protect them. It was at this point, in October of 1991, that Randy filed a Motion for Modification of Custody in the Montana District Court.
Randy received a court order dated October 9,1991 awarding him temporary custody of his children. He was subsequently able to locate Wanda and the children in Idaho. He obtained the help of Idaho authorities and took physical custody of his children on October 15, 1991. Immediately upon assuming custody of the children, Randy returned them to Shodair Hospital where they remained for treatment until January of 1992. During this stay, the children were visited each week by both parents.
A modification hearing was held on June 30 and July 1, 1992. On August 20, 1992 the District Court entered its Findings of Fact and Conclusions of Law and Order awarding custody of the children to Randy with supervised visitation for Wanda. Wanda appeals that order.
Did the District Court abuse its discretion in modifying the custody of the two minor McDowell children?
Wanda asserts that the court erroneously modified the custody of the McDowell children. She claims that she has been unable to see the children whom she raised for nine years. Randy argues that Wanda took the children out of the state in direct contravention to the custody order and that the safety and well-being of his children required an immediate change in their physical custody because of possible abuse by their step-father.
Our custody modification statute provides that when the child’s present environment endangers seriously his or her “physical, mental, moral, or emotional health” it may “in its discretion” modify a prior custody arrangement. Section 40-4-219(l)(a) and (c), MCA. Further, the district courts have discretion to modify custody when the custodial parent changes or intends to change the child’s state of residence. Section 40-4-219(l)(f), MCA.
In any custody determination, we will look to see if a district court’s findings are clearly erroneous. In re Marriage of Klose (1990), 243 Mont. 211, 793 P.2d 1311. And, unless the court has abused its discretion, we will not overturn a district court’s ruling. In re Marriage of Rolfe (1985), 216 Mont. 39, 699 P.2d 79. The testimony presented during the modification hearing was extensive. That testimony is mirrored specifically in the District Court’s findings. There is substantial evidence in the record to establish that the children here suffered forms of sexual abuse and possibly satanic ritualistic abuse.
The District Court could not determine exactly what had happened to the children and although the transcript of the hearing contains graphic detail, many questions remain unanswered as to the extent of the abuse. The court did find that Wanda’s efforts to obtain effective treatment, and to help her children, were well intentioned, but erratic to the point they endangered the children, particularly the boy. The court also found that the children’s real father, Randy, had been passive in his approach to the relationship he had with his children. The court determined that when the children were taken out of state because of possible harm from their step-father, Randy appropriately sought to protect his children.
The District Court found that there was a significant possibility that Wanda had participated in the abuse, and that she may have told the children they were required to be involved in the satanic cult. The record before us does not contain evidence to support that finding. On this aspect, the court relied upon reports from Shodair Hospital which are not a part of this record. Appellant argues that such records should never have been considered by the court without appropriate authentication. We cannot consider this argument because the appellant failed to object to the records when they were given to the District Court and were considered by the court. If a party does not object to evidence at the lower comb level, the party cannot object to it on appeal. Whiting v. State (1991), 248 Mont. 207, 810 P.2d 1177.
Wanda argues that the court did not consider the children’s preference for custodial parent. The record reveals that the court did not interview the children. 'While district courts are required to consider the best interests of the children in determining a custody arrangement, this Court has determined that a district court is not required to interview the children in every case. In re Marriage of Susen (1990), 242 Mont. 10, 788 P.2d 332. In the Susen case, the wishes of the children were specifically known. In the case before us no testimony was obtained from the children so we do not know their views regarding custody. While an interview with the children would have been preferable, the record as hereafter summarized establishes that two counselors and other qualified persons testified regarding the care and custody of the children, including the possibility of danger to them. In view of the facts as determined by the court, which clearly demonstrated that the best interests of the children required a change in custody, we conclude the court did not err in failing to interview the children.
Wanda moved for the appointment of an attorney to represent the children. The father questioned the need for such an appointment. The District Comb did not rule on the motion and did not express a reason for not making an appointment in its Findings of Fact, Conclusions of Law and Order dated August 20, 1992. Section 40-4-205, MCA(1991), in effect on the date of the order, provided as follows:
40-4-205. Representation of child. The court may appoint an attorney to represent the interests of a minor dependent child with respect to his support, custody, and visitation. The county attorney and the deputy county attorneys, if any, may not be appointed for this purpose. The court shall enter an order for costs and fees in favor of the child’s attorney. The order shall be made against either or both parents, except that if the responsible party is indigent, the costs shall be waived.
This code section was interpreted in the custody case of Milanovich v. Milanovich (1982), 200 Mont. 83, 655 P.2d 959. In interpreting the foregoing code section, in Milanovich we stated the rule regarding appointment of attorneys for children as follows:
“[T]he rule is that appointment of counsel is only necessary when the child needs an advocate to represent his position as to the issues in dispute or to insure the development of an adequately complete record concerning the best interests of the child.”
Milanovich, 200 Mont. at 89, 655 P.2d at 962; quoting In the Matter of Inquiry into J.J.S. Youth In Need of Care (1978), 176 Mont. 202, 577 P.2d 378, 381. In accordance with the Milanovich case, we have carefully reviewed the record in this case to determine if an attorney was required to represent the position of the children on the issues in dispute, or to ensure the development of an adequately complete record concerning their best interests. Following are key parts of the findings and conclusions of the District Court:
FINDINGS OF FACT
6. Several witnesses, including counselors from Shodair and the parties themselves, indicated that the children had been sexually abused and molested, probably by Mr. Harris. This abuse occurred during the mid and later part of 1990 as best can be determined...
7. References and innuendoes during the trial indicate that Mr. Harris may have been involved with a satanic cult or participated in “cultist” activities and rituals. Wanda firmly believes that the children were molested and abused by Mr. Harris in conjunction with those rituals. Randy is not so certain of the ritualistic nature of the abuse, but believes rather firmly, based upon information that he has, that, at the very least, the children were sexually abused by Mr. Harris. ...
8. In January of 1991 Wanda contacted Carol Lee, a counselor in Columbia Falls, regarding the children, and Ms. Lee did counsel the children over a period of time from January through June of 1991. During the latter part of that counseling, certain references were made to ritual abuse. Lee testified that she would have been willing, and felt competent, to continue counseling with the children but that Wanda discontinued that counseling in June when she took the children to see James Ramsey, a licensed professional counselor...
9. Wanda terminated the counseling with Mr. Ramsey, but, in August or September of that year, J. began exhibiting very bizarre, self-destructive behavior. He expressed a desire to commit suicide. As a consequence, Wanda took him to Rivendale [sic], a children’s psychiatric hospital in Butte. She decided that she did not like that facility so she took him to Shodair Children’s Hospital for treatment and evaluation. However, on September 26, 1991, Wanda removed J. from Shodair against medical advice.
11.... It should be noted that J. was potentially suicidal prior to his admission to Shodair and upon his removal from that facility by Wanda. Lisa Shipley and Sharon Center, both therapists at Shodair, felt that removing J. from Shodair under those circumstances constituted medical abuse and was potentially a serious endangerment to J. ...
13. Shodair determined, upon evaluating the McDowell children [after their return by Randy to Shodair in October, 1991], that it would be best if both children remained at Shodair and they did remain there from mid-October until late January 1992. During the three months that they were at Shodair, the children had weekly visits and family sessions with both parents. The therapists testified that the family sessions between the children, Randy and Marie, were appropriate and appeared to be helpful to the children. On the other hand, the weekly family sessions with Wanda were frequently inappropriate in that Wanda interjected topics into the conversation that were considered improper by the therapists ...
14. The therapists from Shodair felt strongly that Randy and Marie were in a better position to provide an appropriate, nurturing and therapeutic home environment for the children than Wanda was.
16. The children were discharged in January, 1992 and have resided with Randy McDowell since that time. They are enrolled in school in Smith Valley School, a rural school just a few miles west of Kalispell. Both children are progressing adequately in school and appear to be doing well and have adjusted to that environment, as well as to the McDowell family home.
17. Dr. Matthew Bosley, a Kalispell pediatrician, testified that he has treated the McDowell children on numerous occasions over the last several years. He testified that the children, particularly J., were generally hyperactive and ill-behaved when they were in their mother’s custody, and that he had noted an extreme change in their behavior from prior to their treatment at Shodair. Dr. Bosley believes that Randy and Marie are appropriate parents and that the children seem to have improved since the change of custody.
CONCLUSIONS OF LAW
2. The erratic behavior and inconsistent treatment of the children by Wanda, the removal of the children from the state of Montana and from Shodair without Court approval and against medical advice ... constitute a serious physical, mental, moral and emotional endangerment to the children.
3. The apparent improvement of the children physically and emotionally since the temporary change of custody in October of 1991 makes it clear that any trauma that might have been caused to the children by virtue of such change of custody has been far outweighed by the benefits that the children have received from that change.
4. Based upon the above considerations and the Findings of Fact, the Court concludes that the Respondent, Randy J. McDowell, should be awarded the custody of the minor children.
We have reviewed the extensive testimony on the part of various experts with regard to the children and their best interests as well as the testimony of the parents. We conclude there is substantial and largely uncontradicted evidence to support the above-quoted Findings of Fact and Conclusions as well as the remaining Findings of Fact and Conclusions of the District Court. Applying the Milanovich tests, we conclude that the record demonstrates the children did not need an advocate to represent their position as to the issues in dispute, as those issues were carefully and completely presented. Next, we conclude that the record without question demonstrates that there was the development of an adequately complete record concerning the best interests of the children. We hold that the District Court did not err in its failure to appoint counsel for the children.
Our attention has been directed to In the Matter of Gullette (1977), 173 Mont. 132, 566 P.2d 396. Gullette was a contested guardianship proceeding, rather than a proceeding under the termination of mar riage and child custody provisions as involved in the present case. However, we carefully consider Gullette because of the serious nature of the alleged abuse and because of the legal questions this case raises in terms of future application. The alleged abuse here was ritual sexual abuse, now a felony in Montana. Section 45-5-627, MCA (1993).
In Gullette, while discussing the need for counsel to represent children in a contested guardianship case, this Court held as follows:
We find the reasoning of the Oregon court in In the Matter of D. to be the most workable solution to the problem presented and hold that where custody is in serious dispute, the court shall appoint independent counsel for the child or make a finding stating the reasons that such appointment was unnecessary. [Cases cited.]
Gullette, 173 Mont. 140, 566 P.2d at 400.
As pointed out in Gullette, there is no statutory provision with regard to the appointment of counsel in contested guardianship cases. The Court extensively discussed the need for counsel in those proceedings as well as in serious marital custody cases. We recognize the contradiction between our current holding and the foregoing holding in Gullette which states that the court shall appoint independent counsel or make a finding stating the reasons the appointment was unnecessary. The court did neither in the present case.
The requirement of Gullette extends beyond the statutory requirements of § 40-4-205, MCA. We also point out that the Milanovich case was subsequent in date to Gullette. In addition, § 40-4-205, MCA, was amended in 1993 without any change in the first sentence which states that “the court may appoint an attorney to represent the interests of a minor dependent child with respect to the child’s support, custody, and visitation.” In order to eliminate the contradictions between Gullette and Milanovich, we expressly overrule the holding in Gullette.
For assistance in future cases, however, we emphasize again that the alleged abuse to the children in this case was severe and involved allegations of ritual sexual abuse. In 1993, Montana enacted § 45-5-627, MCA, as a criminal felony statute which provides that a person commits the offense of ritual abuse of a minor if the person engages in various conduct such as sexual intercourse, mutilation or sacrifice of animals and other specifically defined conduct. In consideration of future cases of alleged ritual abuse, we emphasize that the parties and courts should carefully consider the possible need for separate counsel to represent the children as well as the possibility of appointment of a guardian ad litem.
We conclude that the record contains substantial and extensive evidence to support the conclusions of the District Court with regard to custody. We hold the District Court did not abuse its discretion in changing custody of the children.
Affirmed.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, HUNT, TRIEWEILER, NELSON and GRAY concur.
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On September 16, 1991, the Defendant was sentenced to fifteen (15) years for Aggravated Assault. Credit is given for ninety (90) days time served. The Defendant shall be designated a dangerous offender for the purposes of parole.
On March 11, 1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and was represented by Bevra J. Jacobson, Legal Intern from the Montana Defender Project. The state was represented by Karen Townsend, Deputy County Attorney from Missoula, Montana.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall remain the same as originally imposed.
DATED this 11th day of March, 1993.
The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.
Hon. Thomas McKittrick, Chairman, Hon. John Warner, and Hon. James Purcell, Judges
The Sentence Review Board wishes to thank Bevra Jacobson, Legal Intern from the Montana Defender Project for her assistance to the defendant and to this Court. The Court also wishes to thank Karen Townsend for appearing on behalf of the State of Montana.
|
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On December 2, 1991, the Defendant was sentenced to twenty five (25) years for Conspiracy to Sell Dangerous Drugs; Defendant shall pay a fine of $25,000; and he shall receive credit for 156 days credit for time served; plus conditions as stated in the December 2, 1991 Judgment imposed by Judge Warner.
On May 6,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and was represented by Carl White, Legal Intern from the Montana Defender Project. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, it is the unanimous decision of the Sentence Review Division that the last ten (10) years of the sentence shall be suspended. The sentence imposed shall remain the same in all other respects.
The reason for the decision is because of the disparity in sentences of the co-defendants. This will make the time portion of the sentence more appropriate.
Hon. Robert Boyd, Acting Chairman, Hon. G. Todd Baugh, and Hon. Mark Sullivan, Judges
The Sentence Review Board wishes to thank Carl White, Legal Intern from the Montana Defender Project for his assistance to the defendant and to this Court.
|
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MEMO OPINION
PER CURIAM:
In this cause the parties joined in a petition requesting suspension of the rules under authority of Rule 3, Rules of Appellate Civil Procedure. Necessity therefor having been shown, on April 3, 1968, the Court ordered filing of briefs forthwith and made provision for oral argument. The parties thereafter waived oral argument and the cause was submitted for decision on April 11, 1968.
The Court has reviewed the record herein and observes no reason to qualify or overturn the decision of the district court. Therefore the judgment is affirmed, each party to bear their own costs.
|
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On July 7, 1992 the Defendant was sentenced to DC-92-204, eight (8) years for Theft, to be served consecutive to the term given in Silver Bow County.
On July 7, 1992, the Defendant was sentenced to DC-92-216, seven (7) years for Theft, A Common Scheme, to be served consecutive to the term imposed in DC-92-204.
On May 6,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and proceeded pro se. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall be affirmed.
The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.
Hon. Thomas McKittrick, Chairman, Hon. John Warner, and Hon. Robert Boyd, Judges
The Sentence Review Board wishes to thank Mr. De Arment for representing himself in this matter.
|
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MR. JUSTICE SHEEHY
delivered the Opinion of the Court.
We determine in this case that the attempted appeal by the Attorney General from the judgment of the District Court in the underlying cause in the Second Judicial District, Silver Bow County, must be dismissed for the reasons hereafter stated. Further we determine that the appeal of the Montana Department of Public Service Regulation, Montana Public Service Commission must also be dismissed as untimely.
I.
On September 30, 1983, Montana Power Company (MPC) filed an application with the Montana Department of Public Service Regulation, through the Montana Public Service Commission (PSC) to increase the utility’s electrical rates to produce an annual gross income increase of $96,367,013. It was the largest electrical rate increase request ever filed in the State of Montana. Opposition to the proposed rate increases developed early, and parties appeared before the PSC in opposition either as protestants or as intervenors. Protestants included James C. Paine, the Montana Consumer Counsel, and his staff attorney, John Allen. Intervenors included Northern Plains Resource Council, Montana Irrigators, District 11 Human Resources Council, Ideal Basic Industries, ASARCO, Champion International, Conoco, Missoula County, Atlantic Richfield, Stauffer Chemical, Exxon, L.I.G.H.T., Butte Community Union, Montana Association of Senior Citizens, and the United States Air Force. The Attorney General made no formal application or appearance before the PSC either on his own behalf or on behalf of the State of Montana as an interested party.
The application was given docket No. 83.9.67 by the PSC, and several interim orders followed therein by the Commission. On August 3, 1984, the Commission handed down the critical order which became the basis of contention in this action. In essence this order of the Commission granted MPC authority to increase its electrical rates to generate additional revenues in the amount only of $4,106,915 (a figure later amended) and, most importantly, denied in toto MPC’s application to increase its rates to recover costs associated with the construction of its steam power plant known as Col-strip Unit 3.
The PSC order of August 3,1984 is long and complicated, but generally it may be stated that the PSC determined that no portion of Colstrip Unit 3 was used or useful in the generation or supply of electricity for the Montana Power Company consumers, and therefore the PSC refused to include its value in MPC’s rate base. The PSC determined that based on a 1982 test year, the demand for energy by MPC’s electrical users could be satisfied through utilization of other less expensive resources and through modification of the maintenance schedule of Colstrip Units 1 and 2. The less expensive resources were a natural gas-fired facility known as the “Bird Plant” owned by MPC, and the available electricity from the Hanford Project, a Washington State nuclear energy facility, whose electricity the utility had purchased in the past. The MPC had been offered a contract from Hanford Energy for electricity for a 10 year period commencing July 1983, but MPC had rejected it because of Colstrip Unit 3’s energy for commercial operation becoming available in early 1984.
On October 10,1984, MPC filed in the District Court, Second Judicial District, Silver Bow County, its petition for judicial review of the PSC order, under the provisions of the Montana Administrative Procedure Act, Section 2-4-701, MCA. Service of copies of the petition was made upon all of the protestants and intervenors of record before the PSC by mail, and in addition service of summons and copies of the petition for review were personally served upon counsel for all of the parties, the protestants and the intervenors. Such personal service was also made on October 12, 1984, upon the Attorney General, and the Chief Assistant Attorney General sent notice of such service upon him to the PSC by letter dated October 17, 1984.
Several of the parties who had contested the MPC in the rate case before the PSC did in fact appear in the District Court action for review. They included, besides the PSC, which was the respondent, intervenors Champion International Corporation, Conoco Inc., the Montana Consumer Counsel, and Montana Irrigators Inc., but did not include the Attorney General, who made no formal appearance in the District Court case on his own behalf or on behalf of the State of Montana as an interested party.
After receiving briefs and conducting a hearing, on June 17, 1985, the District Court entered findings of fact, conclusions of law and order, in effect reversing the August 3, 1984 order of the PSC. The District Court remanded the matter to the PSC “for a proper determination of the need for the Colstrip 3 generating station which is in full compliance with this court’s decree,” and further the District Court enjoined the Commission from determining or attempting to determine the need for Colstrip 3 generating station on the MPC’s system in the manner that the District Court had found to be unlawful.
After the judgment, on August 16, 1985, Northern Plains Resource Council, District 11 Human Resources Council, and Missoula County, (none of which had earlier appeared in the District Court action, but had appeared before the PSC) filed a motion in the District Court for permission to intervene in the action. On the same date, August 16, 1985, the District Court denied the motion of these parties for intervention.
On August 16, 1985, the Attorney General filed in the District Court a notice of appeal, stating that “notice is hereby given that the State of Montana, through its Attorney General, appeals to the Supreme Court of the State of Montana” from the order and judgment of June 17, 1985 of the District Court.
On August 23, 1985, a notice of appeal was filed by the Montana Department of Public Service and Regulation, Montana Public Service Commission from the District Court’s order pursuant to Rule 5 of the Montana Rules of Appellate Civil Procedure.
II.
On September 5, 1985, MPC filed in this Court its motion to dismiss the appeal filed by the Attorney General for lack of standing and further to dismiss the appeal filed by the Montana Public Service Commission as untimely.
MPC contends that the Attorney General has no standing to appeal from the District Court decision in a judicial review proceeding in which the Attorney General did not appear on behalf of the State of Montana. MPC also contends that the appeal of the Montana PSC is invalid because, since it was filed under Rule 5, M.R.App.Civ.P., and not within 60 days of the judgment as required by Section 2-4-711, MCA, and 69-3-405, MCA the PSC appeal is untimely.
In opposing the motion to dismiss, the Attorney General contends that the State was indeed a party to the proceeding below because its Department of Public Service Regulation was the named respondent, that the State was in fact a party to the District Court proceedings, and that the Attorney General was authorized to appeal from the District Court’s judgment under his common law and statutory powers.
Both parties rely on State ex. rel. Olsen v. Public Service Commission (1955), 129 Mont. 106, 283 P.2d 594. The Attorney General claims that Olsen affirms his broad constitutional, statutory and common law powers as attorney general and that it affirmed the authority of the attorney general to represent the State in district court proceedings; while the Montana Power Company distinguishes Olsen, saying in that case the Attorney General was an actual party taking part on behalf of the State in the District Court proceedings.
The motion of MPC with respect to the Attorney General’s appeal puts in question squarely his right as an official or as an attorney representing the State to perfect an appeal from the District Court decision in this case.
There is not before us, and we make no comment on, the legal sufficiency or propriety of the District Court order reversing the PSC. Also not before us are the actions taken by the PSC subsequent to the judgment of the District Court which resulted in electrical rate increases granted by the PSC relating to Colstrip Unit 3 based on a test year of 1983.
III.
Supervision, regulation and control of public utilities are vested in the Montana PSC under the terms of statutes found in Ch. 3, Title 69, MCA. The PSC is given specific power “in its discretion” to investigate and ascertain in the rate-making process the value of the property of every public utility “actually used and useful” for the convenience of the public. Section 69-3-109, MCA.
With respect to the Attorney General, the chapter on the regulation of utilities under Section 69-3-110(3) provides:
“Upon the request of the commission, it is the duty of the attorney general or the prosecuting attorney of any county to aid in any investigation, prosecution, hearing, or trial had under the provisions of this chapter and to institute and prosecute all actions or proceedings necessary for the enforcement of this chapter.”
The PSC contends that it made no request of the Attorney General for aid in the investigation, prosecution, hearing, or trial of the MPC rate increase proceedings. For that reason, PSC contends that the Attorney General did not represent it in the proceedings before the Commission itself, or in the District Court when MPC filed its petition for judicial review.
(Curiously, Ch. 14 of Title 69, MCA, the part of our code referring to the regulation of railroads by the Public Service Commission provides in Section 69-14-132, MCA, that the Attorney General is the attorney of the Commission, but that the Commission may employ special counsel with the approval of the Attorney General to assist in any case. However, Section 69-14-132, is confined by its terms to Ch. 14, pertaining to the regulation of railroads.)
In fact, the PSC employs counsel independently of the Attorney General for the purpose of advising the Commission and conducting proceedings and actions relating to rate regulation and other matters within the purview of the Commission. It is also true that when such counsel of the Commission proceed in court, they do so as special assistant attorneys general under commissions granted in writing to them by the Attorney General. Typical letters from the Attorney General which accompany the certificates of such appointments for counsel include the following or similar language:
“Please find enclosed an official Certificate of Appointment. This Commission will remain in effect until its expiration on January 1, 1989, or termination of your appointment by the Public Service Commission, unless you are otherwise notified by me in writing.
“Please note that Sections 25-1-501 and 25-1-502, MCA, require that the Attorney General be notified when a state department or board initiates or intervenes in an action in any court or appeals a judgment or order entered in any court. Special assistant attorney generals should provide a copy of the complaint, counterclaim, crossclaim, or notice of appeal to my office when any of the previ ously-stated actions are filed in any court. Copies of pleadings and documents handled by you under authority of this Commission need only be provided to me upon specific requests.”
Thus under this arrangement, the answer of the PSC in the District Court to the petition for judicial review by the MPC was filed on November 1, 1984. The appearing party was described as
“Department of Public Service Regulation Montana Public Service Commission 2701 Prospect Avenue Helena, MT 59620 Eileen E. Shore Attorney for Respondents /s/ Opal Winebrenner Opal Winebrenner Staff Attorney Montana Public Service Commission”
Throughout the course of the District Court proceedings then, the representation of the PSC was maintained by its counsel and designated as such.
As we said, the judgment of the District Court was entered on June 17, 1985. Under Section 69-3-405, MCA, any party to the action in the District Court has 60 days in which to appeal to the Montana Supreme Court. Thus the final date for the filing of a notice of appeal was August 16, 1985.
The PSC decided on August 9, 1985, by a vote of 4 to 1 of its 5 members not to appeal the decision of the District Court. No other party or intervenor who had appeared in the District Court action chose to appeal.
IV.
In every appeal, the first question is that of jurisdiction. Hand v. Hand (1957), 131 Mont. 571, 312 P.2d 990.
The constitutional right of appeal is secured only where the laws are followed and compliance is made with the provisions necessary to give the Supreme Court appeal jurisdiction. State Bank of New Salem v. Schultze (1922), 63 Mont. 410, 209 P. 599; State ex rel. Reid v. District Court (1953), 126 Mont. 489, 255 P.2d 693. An appellant is charged with a duty of perfecting his appeal in the manner and within the time provided by law, and unless mandatory statutory provisions are complied with, the Supreme Court acquires no jurisdiction to entertain and determine the appeal. In re Malick’s Estate (1951), 124 Mont. 585, 228 P.2d 963.
Statutes relating to appeals are held to be mandatory and jurisdictional, State ex rel. Clark v. District Court (1955), 128 Mont. 526, 278 P.2d 1000, and in a sense prohibitory and jurisdictional in that they limit the right of appeal to the method expressly provided by statute. Id.
Rule 1 of the Montana Rules of Appellate Civil Procedure provides that “a party aggrieved” may appeal from a final judgment of the District Court. The Attorney General informed us at oral argument that he did not seek in this appeal to represent the PSC as the party appellant. In his notice of appeal, the Attorney General stated that “the state of Montana, through its Attorney General” appealed to the Supreme Court. The first question for us to determine therefore is whether the State of Montana or the Attorney General in his individual capacity, is a “party aggrieved” within the purview of Rule 1, M.R.App.Civ.P., independently of the PSC.
We recognize in the beginning that the business of a public utility is affected with a public interest. We stated so emphatically in Olsen, 129 Mont. at 116, 283 P.2d at 599, pointing out that rates and charges of a public utility could not be regulated or controlled if its business were not affected with a public interest. We also pointed out in Olsen that aside from the public interest generally, the state has a further interest in public utility rates if the state and its institutions might be required to pay unlawful and unreasonable rates. Olsen, 129 Mont. at 117, 283 P.2d at 600. Olsen further confirmed that the Attorney General had the right to protect the public interest in litigation affecting rate regulation proceedings.
We must also keep in mind, from the beginning, the function of the PSC in the rate-regulating process and the relation of courts to that function of the PSC:
“The function of ratemaking is purely legislative in character, whether it is exercised directly by the legislature itself by the enacting of a law fixing rates or by the granting of a charter wherein the rates are regulated, or is exercised by some subordinate administrative or municipal body to whom the power of fixing rates has been delegated; in any of such cases, the completed act derives its authority from the legislature and must be regarded as an exercise of legislative power. Therefore, since the ratemaking power of the state is legislative rather than judicial, it is not within the power of a court to fix, directly or indirectly, the rates to be charged by public utilities, or to control, by writs which can issue only for the purpose of controlling judicial action, the action of properly authorized ratemaking bodies, although it may, in general, restrain the imposition of palpably excessive or confiscatory rates . .
64 Am.Jur.2d, Public Utilities Section 89.
The power of district courts in Montana to review a rate order of the PSC is controlled by Section 69-3-404, MCA. The District Court must proceed without a jury, and is confined to the record unless application is made to the court to present additional evidence. After the district court enters its order or judgment, appeal to the Supreme Court may be taken pursuant to a special statute for that purpose. Section 69-3-405, MCA, provides that upon judgment “either party to said action may appeal or take the case up on error as in other civil actions.”
Thus, Rule 1, M.R.App.Civ.P. provides for an appeal to “a party aggrieved” while Section 69-3-405, MCA, provides for an appeal to “either party to said action.” We determine in this case that the two provisions must be interpreted in harmony with each other.
We find in this case that the State of Montana, as such, though entitled to appear as a party in interest, was not a party either in the District Court action or in the proceedings before the Montana Public Service Commission. No formal appearance was made by the State of Montana through its Attorney General in either of those proceedings, for the representation of the separate interest of the state in the proceedings. The PSC, it is true, is an agency of the state, and may be thought to represent the state. However, the posture of the PSC in the District Court review proceedings was not so much to protect the interest of the state of Montana in defending the PSC order (although arguably they may coincide), but rather to protect the propriety and the integrity of the order which it had made denying any value in the MPC rate base to Colstrip Unit 3.
The fact that the State of Montana was not itself a party in either the administrative proceedings or the District Court action is not in itself decisive of the right of the state to appeal here. The test to determine one’s standing to appeal is whether one has a direct, immediate and substantial interest in the subject which would be prejudiced by the judgment or benefited by its reversal. Estate of Tomlinson (Ill. 1976), 65 Ill.2d 382, 3 Ill.Dec. 699, 359 N.E.2d 109, 111. A nonparty has standing to appeal if he has such an interest. Marcheschi v. P.I. Corporation (Ill.App. 1980), 84 Ill.3d 873, Ill.Dec. 138, 405 N.E.2d 1230, 1234. Thus, nonparties, under the rule of virtual representation, such as members of a class involved in a class action, or nonparties to a will contest may have such an interest as would entitle them to appeal. Marcheschi, supra. If the State were mandated by law to have been made a party to the review proceedings in the District Court or before the Public Service Commission, it would then certainly have a right to appeal. Estate of Tomlinson, supra.
We determine that the State of Montana is not an aggrieved party, or a party to the action in the District Court entitled to appeal from the District Court judgment. It was pointed out on oral argument that the Attorney General has failed to identify the direct, immediate and substantial interest of the state on which he attempts to appeal here. If the interest of the state is that of a consumer of electricity provided by the MPC, its interest as a consumer is no different from that of the corporate consumers that appeared in the proceedings below, or of John Q. Citizen. Certain corporate or other organizations of consumers did appear and identify their interests before the PSC and the District Court but the State of Montana did not. As a consumer, therefore, the State of Montana is precluded, as would any John Q. Citizen who did not appear below be precluded, from appearing for the first time in the appellate court to relitigate the issues.
The reasons are obvious: neither the PSC nor the District Court was given an opportunity by the State of Montana to identify its separate interest, and to resolve any issues of interest relating to the state. Moreover, the State is not privy to the record developed before the PSC and the District Court. What issues could be framed in the appeal here by the State? The party to the action in the District Court, the PSC has acceded to the terms of the judgment of the District Court. The Attorney General, without a party client, is in effect asking for an advisory opinion to reverse the District Court, a pastime in which this Court does not ordinarily indulge. Indeed, what relief could be granted by us at this juncture? The PSC, within the discretion granted to it by law, has acted to approve the District Court decision. There is nothing now for an appellate court to determine. The horse is out of the barn, and it is too late to lock the stable door.
The cases are legion that we will not, for the first time on appeal, resolve issues or determine questions not presented in the first time on appeal, resolve issues or determine questions not presented in the first instance to the District Court. We hold, therefore, that the State of Montana, as a nonparty to the proceedings before the PSC and the District Court has no standing to appeal, and the appeal on its behalf must be dismissed.
V.
Implicit in this case is the question whether the Attorney General, in his official capacity, is entitled to appeal the decision in the District Court.
The Attorney General is a constitutional officer. Art. VI, Section 1, 1972 Montana Constitution. He is constitutionally empowered to be the legal officer of the state and to have the duties and powers provided by law. Art. VI, Section 4. His lawful powers and duties with regard to the state are expressed in two lines of a statute: he must “attend the supreme court and prosecute or defend all cases to which the state or any officer thereof in his official capacity is a party.” Section 2-15-501(1), MCA. He is therefore the legal officer for the PSC, and it is for that reason that the lawyers employed by the PSC act under the Attorney General in court proceedings as special assistant attorneys general.
In a carefully worded opinion, this Court determined in Woodahl v. State Highway Commission (1970), 155 Mont. 32, 465 P.2d 818, that the Montana Highway Commission had authority to employ and engage outside fee counsel without approval of the Attorney General. In Woodahl v. Montana Board of Natural Resources and Conservation (1973), 163 Mont. 193, 516 P.2d 383, because factual questions were involved and the Attorney General had a right to litigate the same issue in the District Court, this Court refused to determine the right and authority of the Attorney General to require all legal counsel appearing in any judicial proceeding on behalf of elected officials to first secure a commission of authority from the Attorney General to so appear.
In State ex rel. Olsen v. Public Service Commission (1955), 129 Mont. 106, 283 P.2d 594, this Court supported the broad powers of the Attorney General as the first legal officer of the state. We determined in Olsen that the Attorney General not only had the constitutional and statutory powers specifically enumerated for him, but broad common law duties, when not restricted or limited by statute.
In this case, the PSC, as a state agency involved in the District Court action, has acted to accept the decision of the District Court and to forego an appeal. We look then to determine whether the Attorney General, in the light of his broad constitutional, statutory and common law powers, may nevertheless maintain this appeal because of his official capacity.
Having in mind that the Attorney General did not appear on his own behalf or on behalf of the State as a party before the PSC or the District Court, we determine that his participation in the proceedings below and in the District Court must be limited to his representation of the PSC, through the special assistant attorneys general.
In that sense, therefore, the contention of the PSC that the Attorney General becomes the attorney for the PSC only upon request of the Commission, pursuant to Section 69-3-110(3), MCA, is incorrect. Under the constitution and by virtue of his office, it is the duty of the Attorney General to institute and prosecute all actions or proceedings necessary for the enforcement of the regulation of utilities, whether requested by the Commission or not. The Attorney General may, however, as he did in this case, authorize counsel employed by the Commission to act as special assistant attorneys general in the prosecution of court actions.
Moreover, the appearance of the Consumer Counsel in rate proceedings would not foreclose an appearance by the Attorney General on behalf of the State. The duties of the Consumer Counsel and of the Attorney General are not co-extensive.
While the Attorney General is the legal officer for the PSC in all cases to which the PSC is a party, the PSC remains the party in the action. The Attorney General remains the attorney, and as legal officer he is not empowered to make the decisions that are vested by law in the discretion of the PSC. The power of the State to make regulatory decisions on utility rates is lodged in the PSC and not the Attorney General. Rightly or wrongly, it is the PSC, within the bounds of law that must regulate rates. The PSC is not answerable for the lawful exercise of its discretion to a fellow official, the Attorney General. The substantive discretion as to what rates to deny or promulgate is only the PSC’s under the provisions of law. The Attorney General, like the rest of us, must accept the PSC decision. He is not free, because the result differs from what he would prefer, to upset the lawful decisions of a public officer in the guise of his attorney relationship to that officer. To permit otherwise, would make the Attorney General a super-officer, whose discretion on any state subject could override that of other public officers, by testing his discretion against theirs in court. No more disruptive arrangement for the operation of the government can be imagined. The forum for testing the correctness of the PSC decision not to appeal the adverse decision of the District Court is not to test for the first time such decision in the appellate court in the guise of an appeal, but rather in the forums provided by law, the proceedings before the PSC and before the District Court on review.
The position of the Attorney General in this case is untenable. As a nonparticipant in the proceedings before the PSC and the District Court, he is not entitled to appeal either on behalf of the State or his own behalf. This appeal is not the place to contest the ultimate decision of the PSC not to appeal. For these further reasons, therefore, the attempted appeal by the Attorney General, whether on his official behalf or on behalf of the State of Montana must be dismissed.
VI
We also determine in this case that the appeal of the PSC in this case must be dismissed as untimely.
More than sixty days from the entry of judgment by the District Court had elapsed when the PSC filed its notice of appeal under Rule 5, M.R.App.Civ.P. Since the Attorney General had filed a notice of appeal on behalf of the State of Montana, the PSC, to protect its interest in this cause, filed its notice of appeal within the seven days provided under Rule 5.
The right of a party to file a notice of appeal within seven days after the first notice of appeal is filed by another party is conditioned upon the language of Rule 5, which is “If a timely notice of appeal is filed by a party . . .” Because we have determined that the appeal filed by the Attorney General on the 60th day from the notice of entry of judgment was invalid as an attempted appeal, the right of any other party whose right to appeal depends on that attempted appeal is without basis. The appeal of the PSC must therefore be dismissed as untimely.
VII.
Accordingly, it is ordered that the appeals of the State of Montana, through the Attorney General and of the PSC be and are hereby dismissed. It follows that all pending motions in this appeal are likewise denied.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and GULBRANDSON concur.
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ME. CHIEF JUSTICE ADAIE:
The parties to these actions by and through their counsel having so stipulated in writing,
It is ordered that the appeals from the judgments in each action be dismissed on the merits as fully settled without costs to any party.
|
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On May 22, 1991, the Defendant was sentenced to a term of forty (40) years for Sexual Intercourse Without Consent. It is the recommendation of the Court to the Parole Board that the Defendant shall complete the sexual offender treatment program and the anger management program at the Montana State Prison before being eligible for parole. The Defendant shall he designated a dangerous offender for the purposes of parole. Credit is given for 186 days time served.
On May 6,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and proceeded pro se. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he did not wish to proceed at this time because he wants counsel to represent him.
IT IS HEREBY ORDERED that the application for review of sentence shall be dismissed with prejudice with leave to refile at a later time.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
|
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MR. JUSTICE SHEEHY
delivered the Opinion of the Court.
In this case, we are confronted with an aspect of the continuing interaction of federal and state laws, procedure, and authority in our complex federal system. Following entry of a default judgment against Jeffrey Wilhelm in the United States District Court for the Southern District of New York, Credit Alliance Corporation registered the same and began execution proceedings. Those efforts to execute on the judgment have resulted in actions before the United States District Court for the Montana District, the United States Bankruptcy Court, the Alaska Superior Court, and the District Court of the Fourth Judicial District, Missoula County.
Credit Alliance Corporation appeals from the judgment of the District Court of the Fourth Judicial District, Missoula County, which determined that certain real property located within Missoula County was subject to the family protection allowances of Section 72-2-801 et seq., MCA, and thus exempt from execution pursuant to Credit Alliance Corporation’s judgment lien. We affirm.
The issues before the Court are:
1. Did the District Court lack jurisdiction to hold that the real property was subject to Montana’s Homestead, Exempt Property and Family Allowances, thus invalidating Credit Alliance Corporation’s execution?
2. Did the District Court err in holding that the Homestead, Exempt Property, and Family Allowances were superior to a judgment lien on the decedent’s real property?
On April 23, 1982, Credit Alliance Corporation obtained a default judgment against Jeffrey Wilhelm, a resident of Alaska, from the United States District Court for the Southern District of New York in the amount of $43,115.74 plus interest based on the underlying claim of Wilhelm’s failure to repay a promissory note. The judgment was registered in the United States District Court for the District of Montana the same day and subsequently docketed upon the records of the Missoula County Clerk of Court on October 26, 1982.
On May 8, 1986, Credit Alliance Corporation caused a Writ of Execution to be issued by the United States District Court of Montana and delivered to the United States Marshal. The United States Marshal scheduled for sale on July 8, 1986, certain real and personal property of Jeffrey C. Wilhelm, consisting of a 1.9 acre parcel of land in Missoula County and a 1969 Buddy Mobile Home. Jeffrey C. Wilhelm filed for bankruptcy in Alaska, his state of residence, on July 3, 1986 and the automatic stay pursuant to 11 U.S.C Section 362 prevents the United States Marshal’s sale from proceeding. Thereafter, on July 11, 1986, the Writ of Execution was returned by the Marshal unsatisfied.
On October 21, 1986, Jeffrey Wilhelm died in an automobile accident near Palmer, Alaska. At that time, he was seeking to have the default judgment overturned.
Shortly after Wilhelm’s death, probate proceedings were initiated in the Third Judicial District of the State of Alaska, Wilhelm’s domicile. On January 13, 1987, Credit Alliance Corporation filed a creditor’s claim against the estate in the amount of the judgment plus interest, costs, and attorney’s fees.
The bankruptcy proceedings were subsequently dismissed on February 6, 1987, dissolving the temporary stay. On June 20, 1987, Credit Alliance Corporation caused a new Writ of Execution to be issued and delivered to the United States Marshal. On July 28,1987, the U.S. Marshal levied upon real and personal property of the estate of Jeffrey C. Wilhelm located in Missoula County, Montana. Pursuant to that levy, a 1969 Buddy Mobile Home and Jeffrey Wilhelm’s purchaser’s interest in a Contract for Deed for 20.18 acres of land in Missoula County were sold at U.S. Marshal’s sale on September 9, 1987. A subsequent U.S. Marshal’s sale was held on November 18, 1987 for 1.9 acres of land in Missoula County. The properties at both sales were purchased by the Credit Alliance Corporation which was put on notice at the time of the sales of the surviving spouse’s claim for exempt probate allowances against those properties.
In the meantime, the Alaska probate proceedings were continuing and ancillary proceedings were initiated in Missoula County, on August 27, 1987. On September 17, 1987, the Alaska Superior Court determined that Wilhelm’s estate was inadequate to satisfy the Alaska family protection allowances and ordered that the real and personal property of the Montana estate be used to satisfy the same. The property in the Montana estate is valued at $29,000 and does not exceed the exempt probate allowances as ordered by the Alaska Court.
A hearing was subsequently held before the state District Court of the Fourth Judicial District for the County of Missoula, for the pur pose of determining whether the family protection allowances were superior to Credit Alliance Corporation’s judgment lien. On January 29, 1988 the state District Court issued an order declaring that the family protection allowances were allowed, were exempt from and had priority over the creditor’s claim of Credit Alliance Corporation, and were superior to Credit Alliance Corporation’s judgment lien. The order also declared the prior execution sales of Credit Alliance Corporation void.
During the course of these proceedings, Credit Alliance Corporation had also filed a quiet title action concerning the property sold pursuant to the execution sale. The estate of Wilhelm answered by motion to dismiss. On July 20, 1988, the United States District Court for the District of Montana granted Wilhelm’s motion to dismiss based on the state’s exclusive jurisdiction over probate matters.
JURISDICTION
Credit Alliance Corporation, in effect, argues that the District Court lacked jurisdiction in two instances. See Credit Alliance Corporation v. Wilhelm, et al (D. Mont. 1988), 693 F.Supp. 884, 885, First, Credit Alliance Corporation contends that the District Court lacked jurisdiction to determine the rights of the parties to the property at issue because such property was in the custody of the U.S. District Court and thus subject to the exclusive jurisdiction of the federal court. Secondly, it is argued that the District Court lacked the authority to invalidate the federal execution sale. Upon examination, we find any error to be moot.
Courts are the creatures of law and as such have no authority outside that granted by law. Jurisdiction is the power, granted by law, of a court to entertain, hear, and determine a particular case or matter. State ex rel. Bennett v. Bonner (1950), 123 Mont. 414, 425, 214 P.2d 747. It is a prerequisite to judicial intervention or decision; in its absence, the actions of a court are without effect. Wilson v. Thelen (1940), 110 Mont. 305, 100 P.2d 923.
Article VII of the 1972 Montana Constitution is the wellhead from which judicial authority flows. Pursuant to Art. VII, Section 4, district courts are vested with original jurisdiction over “all civil matters and cases at law and in equity . . . and such additional jurisdiction as may be delegated by the laws of the United States or the state of Montana.” Clearly, the broad sweep of this provision encompasses matters of probate.
Section 72-3-111, MCA, provides that “the district court has exclusive jurisdiction of all probate matters.” In addition, the district courts of this state are vested with “the full power to make orders, judgments, and decrees and take all other action necessary and proper” to effectuate the court’s authority. Section 72-1-202(2), MCA. The conclusion is thus inescapable that the state District Court properly had jurisdiction over the assets of the estate. The issue therefore becomes one of federal preemption.
By virtue of the Supremacy Clause, state jurisdiction is subject to federal preemption. Rio Grande Railroad Co. v. Gomila (1889), 132 U.S. 478, 10 S.Ct. 155, 33 L.Ed 400. However, the United States Supreme Court has long recognized the primacy of state courts over probate matters. See Yonley v. Lavender (1874), 88 U.S. (21 Wall.) 276, 22 L.Ed 536. Although the federal court retains jurisdiction over claims impacting the estate, the court cannot seize and control property which is in the possession of the state probate court. Waterman v. Canal-Louisiana Bank & Trust Company (1909), 215 U.S. 33, 44, 30 S.Ct. 10, 12, 54 L.Ed 80, 84. The assets of the estate remain subject to exclusive state control. As the Waterman court noted, citing Byers v. McAuley (1893), 149 U.S. 608, 13 S.Ct. 906, 37 L.Ed.2d 867:
“A citizen of another state may establish a debt against the estate. (Citation omitted.) But the debt thus established must take its place and share of the estate as administered by the probate court; and it cannot be enforced by process directly against the property of the decedent. . (Emphasis added.)
215 U.S. at 44, 30 S.Ct. at 12, 54 L.Ed at 84.
It is thus clear that while “a federal court may exercise jurisdiction and enter a judgment binding on a claimant and the administrator of an estate, the federal court may not exercise dominion over assets in the estate which by state law are subject to the exclusive possession of the state probate court.” Nichols v. Marshall (10th Cir. 1974), 491 F.2d 177, 181.
Similarly, the federal courts have also demonstrated a reluctance to intrude upon the state province of family protection. In United States v. Yazell (1966), 382 U.S. 341, 86 S.Ct. 500, 15 L.Ed.2d 404, the Supreme Court was asked to uphold the Small Business Administration’s attempt to levy on property pursuant to loan default in violation of Texas family law. Noting the absence of a federal interest sufficient to override state law concerning family and family-property arrangements, the court held:
“We decide only that this Court, in the absence of specific congressional action, should not decree in this situation that implementation of federal interests requires overriding the particular state rule involved here. Both theory and the precedents of this Court teach us solicitude for state interests, particularly in the field of family and family-property arrangements. They should be overridden by the federal courts only where clear and substantial interests of the National Government, which cannot be served consistently with respect for such state interests, will suffer major damage if the state law is applied.
“Each State has its complex of family and family-property arrangements. There is presented in this case no reason for breaching them.”
382 U.S. at 352, 86 S.Ct. at 507, 15 L.Ed.2d at 410. See also Fink v. O'Neil (1882), 106 U.S. 272, 1 S.Ct. 325, 27 L.Ed 196 (federal court cannot order execution on land protected by state homestead exemption.)
In the instant case, the issuance of the writ of execution by the court clerk following Jeffrey Wilhelm’s death infringed upon the state’s jurisdiction to determine matters of probate. Upon Jeffrey Wilhelm’s death, jurisdiction over the assets of the estate was vested solely in the state court. See Waterman, supra. Credit Alliance Corporation’s subsequent attempt to execute on the assets of the estate pursuant to a federal writ of execution violated the state’s prerogative and the prohibition against execution during the pendency of probate in contravention of Section 72-3-813, MCA. It also contravened the state’s primacy in the area of family protection. See discussion, infra.
When confronted with an analogous situation, the United States Court of Appeals for the First Circuit determined that a writ issued solely on the authority of a federal court clerk in violation of state law is without effect. Gabovitch v. Lundy (1st Cir. 1978), 584 F.2d 559, 561. However, neither this Court nor the District Court has the authority to invalidate federal action. Rio Grande Railroad Co. v. Gomila (1889), 132 U.S. 478, 10 S.Ct. 155, 33 L.Ed 400. That task remains solely within the discretion of the federal courts. In this case, we conclude the federal court has so acted.
In Credit Alliance Corporation’s related quiet title action before the federal District Court, Credit Alliance Corporation claimed the right to quiet title to the property pursuant to the property’s purchase at the execution sale. The federal court disagreed. Recog nizing the exclusive jurisdiction of state courts in probate matters, the federal court determined that jurisdiction over the property was vested in the state court upon Jeffrey Wilhelm’s death, an event which occurred prior to the execution. Credit Alliance Corporation v. Wilhelm, et al. (D. Mont. 1988), (No. 87-218) slip op. at 3. Consequently, the federal court lacked jurisdiction to determine title to the property. Slip op. at 4.
On its face, the federal court’s determination that the assets of the estate of Jeffrey Wilhelm became subject to state court jurisdiction upon his death, a time prior to the execution, clearly invalidates the writ. Although the District Court lacked jurisdiction to invalidate the federal writ of execution, it nevertheless had the authority to determine title to the property. We must therefore conclude that the issue is moot.
PRIORITY OF CLAIMS
Judgment liens are controlled by Title 25 of the Montana Code Annotated. Section 71-3-1504, MCA. Pursuant to Section 25-9-301(2), MCA, a judgment constitutes a lien against “all real property of the judgment debtor not exempt from execution ...” (Emphasis added). In the instant case, Credit Alliance Corporation contends that the property at issue is not exempt from execution. We disagree.
Judgment liens are designed to assist creditors to collect debts due and owing. Generally, the death of a judgment creditor does not affect the vitality of a judgment lien. Section 25-13-103(2), MCA. However, a judgment lien is solely a creature of statute and completely dependent upon the authorizing statute for the terms and limits of its existence. McMillan v. Davenport (1911), 44 Mont. 23, 31, 118 P. 756, 758, 759. It is a general lien on all real property owned by the debtor but is not a specific lien on any particular piece of property. Vaughn v. Schmalsle (1890), 10 Mont. 186, 194, 25 P. 102, 103. As such, a lien does not create title to the property nor does it create an estate or interest therein. See, Martin v. Dennett (Utah 1981), 626 P.2d 473, 475. Rather, the lien merely creates a right of seizure of the debtor’s interest as defined and limited by the terms of the authorizing statute. See, Hannah v. Martinson (1988) [232 Mont. 470,] 758 P.2d 276, 45 St.Rep. 1203.
The family protection and allowances granted pursuant to statute states public policy. The goal is to ensure that the family of a decedent is not left destitute and dependent upon the public charity. Estate of Lawson (Mont. 1986), [222 Mont. 276,] 721 P.2d 760, 762, 43 St.Rep. 1261, 1263. Unlike judgment liens, the family protection allowances grant the family of the decedent a vested interest in property. The right exists apart from, and in addition to, any rights flowing from the estate. Lawson, 721 P.2d at 762, 43 St.Rep. at 1263; Matter of Merkel's Estate (Mont. 1980), 618 P.2d 872, 37 St.Rep. 1782. In addition, the right is to be liberally construed in order to effectuate its purpose. Matter of Hutchinson's Estate (Alaska 1978), 577 P.2d 1074, 1076. See also, Lawson, supra (nature of family allowances preclude defenses of offset, satisfaction, payment or abandonment).
In the instant case, we are confronted with a statutory conflict between the competing interests of the decedent’s family and creditors due to the insolvency of the estate. In such situations, the applicable statutes cannot be viewed in a vacuum. Rather, the statutes should be read together and, if possible, harmonized so as to give effect to each of them. Schuman v. Bestrom (Mont. 1985), [214 Mont. 410,] 693 P.2d 536, 42 St.Rep. 54.
Where there are ancillary proceedings in this state, the family of the decedent is entitled to family exemptions and allowances as determined by the law of the decedent’s domicile — Alaska. See Section 72-3-821, MCA. Pursuant to Alaska law, Wilhelm’s family is entitled to a homestead allowance, exempt property allowance and family allowance totaling $52,000. See, AS Sections 13.11.125, 130 and 135. However, the insolvency of the Alaska estate has left $48,253.74 of the amount unsatisfied.
Both Alaska and Montana law provide that the homestead allowance is exempt from and has priority over all claims against the estate. See AS Section 13.11.125, AS and Section 72-2-801(2), MCA. A similar priority has been granted under the family allowance and exempt property provisions in order to provide the dependents of the decedent with the means to provide themselves with the basic necessities of life. See AS Sections 13.11.130, 13.11.135, AS and Sections 72-2-802(2), 72-2-803(2), MCA. In addition, both probate codes recognize the continuing nature of a judgment lien. See AS Section 13.16.515, and Section 72-3-812, MCA.
However, unlike Alaska, this Court has not been confronted with a similar dispute. In Hutchinson, supra, the Alaska court was asked to determine the priorities between the family protection allowances and administrative expenses. Although applying an Alaska statute, the court’s examination of the rationale underlying the priority given family protection allowances is nonetheless sound.
“Those who dealt with the decedent did so with knowledge of the existence of such provisions for the protection of himself and his family, and only upon the margin of his credit over such exemptions. It is therefore in no sense unfair to them that such provisions be continued in effect after his death, for the benefit of his family. The public welfare, moreover, is largely involved. If indigent widows and orphans were to be left wholly without means of support, a great burden would be cast upon society and they would frequently be left to suffer for faults which they were without power or capacity to oppose. It is repeatedly and soundly declared, accordingly, that the statutory rights of the family of a decedent to maintenance and support and to such protection against deprivation of the bare necessities of life as is accorded by the exemption and homestead laws and continued for their benefit, although in derogation of the common law, are strongly favored and are to be liberally construed in view of their humanitarian purpose.”
577 P.2d at 1076. We believe the same reasoning to be equally applicable here.
While the code indicates that a judgment lien survives the death of a debtor (Sections 25-13-103(2), 72-3-812, MCA), it does not provide that the judgment creditor’s interest is inviolate. The creditor was aware of the family protection laws at the time he engaged in business with the debtor and knew that his remedy for breach might be subject to the same. Unlike a mortgage, a judgment lien does not create a vested right in a specific piece of property. Short of such a right, the existence of the lien should not prevent the property to which the lien attached from being marshaled as assets of the estate. See, Martin, 626 P.2d at 476; see also In Re Donner's Estate (Fla. App. 1978), 364 So.2d 753 (lien cannot be imposed upon the surviving spouse’s dower); Thomas v. Bailey (Miss. 1979), 375 So.2d 1049 (widow’s allowance is superior to judgment lien).
We therefore conclude that although the judgment lien attached prior to Wilhelm’s death, the lien was extinguished upon the exercise of the Wilhelm family’s statutory rights granted pursuant to the family protection allowances. At that time, the property was no longer non-exempt within the meaning of Section 25-9-301(2), MCA.
It is not necessary now to discuss the issue advanced by the estate that when Credit Alliance Corporation filed a creditor’s claim in the Alaska probate proceedings, it waived its judgment lien upon specific probate property.
The judgment is affirmed.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, HUNT and McDONOUGH concur.
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MR. JUSTICE GULBRANDSON
delivered the Opinion of the Court.
Ramona and Richard Medders (the Medders) appeal a Sheridan County District Court grant of summary judgment to Arnold Joyes (Joyes). We affirm.
On May 27, 1984, vehicles driven by Ramona Medders and Arnold Joyes collided on a well graveled and recently graded county road in Sheridan County, Montana. Medders was traveling north and Joyes was traveling south on the county road. The head-on collision occurred at the crest of a hill at approximately 3:00 p.m. in good weather. Sheridan County Deputy Sheriff Brost (Brost) arrived at the accident scene at approximately 4:00 p.m. to find Ramona Medders and her eleven-year-old daughter, Tracie, trapped in their 1979 Chrysler Cordoba. Brost also found Joyes at the wheel of his 1984 Ford Bronco II and Arnold’s wife, Iris Joyes, unconscious in the front passenger seat. All four accident victims were subsequently transported by ambulance to a Plentywood hospital where Iris Joyes later died of injuries she sustained in the accident.
Brost conducted an examination of the accident scene and noted his findings on a State of Montana accident investigation report form. Sheriff Holt (Holt) photographed the accident scene before the vehicles were moved. Brost determined that the gravel road was twenty-two feet wide at the point of impact, and that the eastern edge of the skid mark left by the right rear tire of the Medders’ vehicle was twelve feet from the eastern edge of the road. The eastern most edge of the skid mark made by the left rear tire of the Joyes’ vehicle was twelve feet nine inches from the eastern edge of the road. The Medders’ vehicle left a skid mark twenty-nine feet long and the Joyes’ vehicle left a twenty-one foot five inch skid mark. The accident occurred to the north side of the crest of a hill with the Joyes’ vehicle nearing the crest and the Medders’ vehicle on the downhill side.
Sheriff Holt’s photographs portray the two vehicles where they settled after recoil from the force of the impact. The rear end of both vehicles shifted to the east immediately after impact. Brost determined that the two vehicles collided primarily on the left front halves and noted the position of the two vehicles at impact on his accident investigation report and deposition diagrams. Officer Brost’s calculations and Sheriff Holt’s photographs place the Medders’ vehicle in the lane of traffic properly occupied by the Joyes’ vehicle immediately before impact.
On March 5, 1986, the Medders filed a complaint alleging that Arnold Joyes operated his vehicle in a negligent manner thereby causing the accident in question. Joyes moved for summary judgment on September 10, 1987. The District Court granted summary judgment to Joyes on October 15, 1987, and issued the following findings:
“1. That drivers of motor vehicles in the State of Montana have an obligation, pursuant to Section 61-8-321, MCA, to drive upon the right half of the roadway, with three statutory exceptions, none of which apply to the case at bar.
“2. The physical facts of the subject accident, which have not been controverted or rebutted by Plaintiffs, show the following:
“(a) That prior to and at the time the collision, Defendant Joyes’ vehicle was being driven in the right half of the subject county road pursuant to Section 61-8-321, MCA;
“(b) That prior to and at the time of the collision, Plaintiff Ramona Medders’ vehicle was being driven in a northerly direction within Defendant Joyes’ southbound lane of traffic.
“3. That there has been no credible or admissible evidence indicating excessive speed on the part of either Plaintiff Ramona Medders or Defendant Joyes.
“4. That there has been no substantial evidence offered by the Plaintiffs to raise a genuine issue of fact that the accident would not have occurred but for the fact that Plaintiff Ramona Medders was driving her vehicle outside the right half of the roadway in violation of Section 61-8-321, MCA.
“5. The materials offered by Plaintiffs in opposition to Defendant’s motion for summary judgment are not material or of a substantial nature, but rather [are] fanciful, frivolous, gauzy, or merely suspicious.”
The Medders appeal the District Court’s grant of summary judgment to Joyes and we identify the following issue for review: Do genuine issues of material fact exist which preclude summary judgment?
The Medders assert that there are several genuine issues of material fact in this case. Summary judgment is improper where genuine issues of material fact exist. Rule 56(c), M.R.Civ.P. The Medders’ burden on this appeal is to establish the existence of a genuine issue of material fact. Eitel v. Ryan (Mont. 1988), [231 Mont. 174,] 751 P.2d 682, 684, 45 St.Rep. 521, 524.
The Medders first claim that there is a factual dispute as to the location of the two vehicles before and after impact. On the basis of his accident investigation, Officer Brost placed the Medders’ vehicle primarily in the left lane of traffic in violation of Section 61-8-321, MCA. In support of his motion for summary judgment, Joyes also submitted an affidavit from A.D. Pipkin (Pipkin), an accident investigation expert, who on June 5, 1984, investigated the scene of this accident. Pipkin studied Brost’s accident investigation report, surveyed the accident site, examined the damaged vehicles, and also concluded that Ramona Medders was on the wrong side of the road at the time of the collision.
In opposition to Joyes’ motion for summary judgment, the Medders submitted an affidavit from an ambulance attendant, Paula Tinsley (Tinsley), who attended to Ramona Medders at the accident scene. In her September 23, 1987 affidavit, Tinsley recalled her two and one-half year old perception that both vehicles were near the middle of the road, that Joyes’ vehicle was substantially in the wrong lane of traffic, and that the Medders’ vehicle was substantially in the correct lane of traffic. Tinsley arrived sometime after the accident and her recollections are of the shifted vehicle positions after impact and recoil. Unlike Brost and Pipkin, Tinsley did not investigate the accident scene or make any measurements to determine the location of the vehicles immediately prior to and at the time of impact. Medders also allege that Holt’s photographs and the coroner’s report concerning Mrs. Joyes’ death conflict with Brost’s measurements and conclusions. The Medders did not submit any independent accident investigation reports or other expert evidence regarding the circumstances of the accident to support their allegations.
The Medders also attempt to justify Ramona Medders’ failure to drive on the right side of the road by contending that the county road in question contained deep ruts which forced traffic to drive near the center of the road. Holt’s photographs and Brost’s deposition, on the other hand, evidence a well graded and graveled two-lane county road with no ruts at the location of the accident.
Initially we note that the Medders’ claim that a negligence case such as here presented is not susceptible to adjudication by summary judgment. Brown v. Merrill, Lynch, Pierce, Fenner & Smith, Inc. (1982), 197 Mont. 1, 10, 640 P.2d 453, 458. Joyes cites to Brohman v. State of Montana (Mont. 1988), [230 Mont. 198,] 749 P.2d 67, 45 St.Rep. 139, for the proposition that this Court will affirm a grant of summary judgment in a negligence case where “it is clear that a party has breached a duty and caused an accident.” Brohman, 749 P.2d at 69 (citing Birky v. Johnson (Mont. 1986), [220 Mont. 413,] 716 P.2d 198, 43 St.Rep. 488). We find the reasoning in Brohman to be applicable to the instant case.
The District Court concluded that the Medders’ evidence in opposition to the motion for summary judgment was “not material or of a substantial nature . . .” We agree. Although the Medders dispute the fact that Ramona Medders was traveling in the wrong lane of traffic, Tinsley’s affidavit and conclusory allegations as to what the photographs portray are not sufficient to give rise to a genuine issue of material fact in this case.
The Medders have not presented any evidence to support the existence of a genuine issue of material fact regarding the location of the vehicles at the time of the collision. Ryan, 751 P.2d at 684. Where reasonable minds cannot differ as to the cause of an accident, questions of fact may be determined as a matter of law. Brohman, 749 P.2d at 70, (citing Hartley v. State (Wash. 1985), 698 P.2d 77, 81). The overwhelming evidence in this case supports the District Court’s conclusion that Ramona Medders’ negligence caused the accident and the District Court properly granted summary judgment.
The Medders next contend that there is a genuine issue of material fact as to whether Joyes was speeding at the time of the accident. The facts concerning the speed of the Joyes’ vehicle are not in dispute. Joyes admits that he was driving approximately forty miles an hour. The District Court concluded that the Medders had failed to present any credible or admissible evidence indicating that Joyes was speeding. The only evidence presented by the Medders with regard to the appropriate speed for this particular road was Ramona Medders’ statement that she felt that eighteen to twenty miles an hour was all she could handle in her car. In a written statement dated June 13, 1984, Ramona Medders claimed to have been traveling approximately thirty-five miles an hour immediately before the accident. After instigating this litigation, Ramona Medders changed her testimony to reflect that she was traveling eighteen to twenty miles an hour. On the other hand, Pipkin, in his affidavit, stated that forty miles an hour was not excessive under the road and driving conditions present at the time of the accident. In addition, Richard Medders stated in his deposition that he had traveled the same county road on several occasions at speeds of thirty-five to fifty miles an hour.
The District Court in effect made a conclusion of law based on the undisputed facts in its determination that Joyes was not speeding. Such questions of law are properly decided by the District Court. Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact (1982), 99 F.R.D. 465, 487. The Medders have presented no evidence to support their allegation that Joyes was driving too fast. On the contrary, the record of this case indicates that Mr. Joyes was driving in a reasonable and prudent manner when his vehicle was struck by Ramona Medders’ vehicle which was being driven in the wrong lane of traffic.
Section 61-8-321, MCA, provides that all vehicles shall be driven on the right side of the roadway with certain exceptions not applicable to this case. The District Court concluded that Ramona Medders violated this statute and that the accident would not have occurred but for her negligence in driving on the wrong side of the roadway. The Medders assert that the District Court incorrectly held this violation of a statute to be negligence per se and that the lower court should instead have determined whether Ramona Medders and Arnold Joyes drove in a reasonable and prudent manner.
We find nothing in the order of the District Court to suggest that it found Ramona Medders’ violation of Section 61-8-321, MCA, to be negligence per se. The District Court reviewed the evidence and concluded that Ramona Medders was the only negligent party. We have reviewed the pleadings, affidavits, answers to interrogatories, and the remainder of th'e record in this case and conclude that summary judgment was properly granted. Eitel, 751 P.2d at 684.
Joyes requests that he be awarded attorney’s fees and costs of this appeal pursuant to Rule 32, M.R.App.P. We decline to award attorney’s fees in this case because we find that appellants’ arguments, although not persuasive, were within the bounds of reasonable appellate argument. LaForest v. Texaco, Inc. (1978), 179 Mont. 42, 585 P.2d 1318. Costs of this appeal, other than attorney’s fees, are to be awarded to Joyes as the prevailing party pursuant to Section 25-10-104(2), MCA.
Affirmed.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER, SHEEHY, McDONOUGH and HUNT concur.
|
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MR. JUSTICE HARRISON
delivered the Opinion of the Court.
This appeal comes from an order and judgment of the District Court of the First Judicial District, Lewis and Clark County, State of Montana, granting Janeen Breidenbach’s motion for summary judgment. The parties primarily involved are the children of John J. Wedum, deceased. The dispute involves the effect of a family settlement agreement in which the signing heirs agreed to share equally their father’s estate. The issue on appeal is whether the family settlement agreement constitutes a valid renunciation of insurance proceeds and a survivor’s interest in joint property.
John J. Wedum died March 1, 1987. At his death, Mr. Wedum held joint tenancy accounts with his daughter Janeen Breidenbach in certain local banks and also had acquired life insurance in which he named Janeen primary beneficiary. On March 9, 1987, four of John J. Wedum’s children entered into a family agreement in which the signatories would share the estate equally. John Randall Wedum, one of the children, drafted and delivered to the signatories the agreement which reads as follows:
“We, the undersigned heirs of John J. Wedum, after due consideration and review of the assets of the estate and having in mind our father’s , intentions to treat all of his children equally do hereby mutually agree, and the consideration for the making of the agreement is relinquishment of any objection that the undersigned would have to the disposition of his estate and to carry out his wishes and intentions evidenced by his last will and testament and his conversations with the undersigned and as evidence of our love and affections for our deceased father and each other, do hereby agree that we, his four heirs, shall share equally, share and share alike, in all of his estate, wherever situated and however comprised and however held and whether to be designated as being distributed by law, by devise, or by last will and testament.
“This agreement made this 9 day of March, 1987, at Helena, Montana.”
This agreement was signed by John R. Wedum, Joseph R. Wedum and Janeen L. Breidenbach. Sharon L. McBride did not sign the agreement but apparently consented to its terms.
After the agreement was signed, the attorney for the estate of John J. Wedum notified the various financial institutions by letter dated March 9, 1987, that an agreement between the “affected parties hereto” and Janeen Breidenbach was reached which rendered the “accounts held jointly” assets and part of the estate. The financial institutions evidently were notified of a dispute over the intention of the parties to the agreement because the banks would not release the money to any of the parties. Janeen Breidenbach filed this action to compel the release of the insurance and joint account funds.
The District Court found the bank accounts wholly vested in Janeen at the instant of her father’s death, since survivorship is the essential characteristic of joint tenancy property, and also that the life insurance proceeds were payable to Janeen at the death of her father because she was the named beneficiary. The defendants below argued that the agreement constituted a renunciation by Janeen of the joint accounts and insurance proceeds, whereupon the property became part of the estate. The District Court held, however, that the agreement did not constitute a valid renunciation. We agree.
Under Section 72-2-101, MCA, a surviving joint owner or beneficiary under an insurance contract may renounce, in whole or in part, any interest in the property by filing a written instrument which must:
a) describe the property or interest renounced;
b) be signed by the person renouncing; and
c) declare the renunciation and the extent thereof.
The appellants argue that the agreement is not only a valid family settlement agreement but also suffices as a written renunciation of interests outside of the estate. Appellants contend the renunciation is effective by reading together the following two clauses in the agreement: “[a]nd the consideration for the making of the agree ment is relinquishment of any objections that the undersigned would have to the disposition of his estate . . and “[i]n all of his estate, wherever situated and however comprised and however held and whether to be designated as being distributed by law, by devise, or by last will and testament.”
We reject such strained construction. Our emphasis goes to the words “disposition of his estate” and “in all of his estate” in the above two quoted clauses. It is not our job to cut and paste in order to find what appellants allege was the intention of the parties. Appellants are attempting to transform an awkwardly drafted family settlement agreement into a renunciation of property interests which have already vested in the respondent, and are outside the estate. We hold that, with respect to property held outside of the estate, this agreement fails to meet the statutory requirements of Section 72-2-101, MCA, and is therefore ineffective as a renunciation or relinquishment of those vested rights. We do not address the adequacy of the settlement agreement itself.
Initially, the agreement does not describe any property interests to be renounced. It merely states that the parties will relinquish their “objections ... to the disposition of his estate.” Nowhere in the agreement are joint tenancy bank accounts or life insurance proceeds mentioned. Yet, even assuming that this clause is an effective renunciation, it applies only to estate property, not to Janeen’s vested personal property.
Additionally, the broad, encompassing language of “wherever situated and however comprised and however held,” describes and modifies the estate property which is being equally distributed by the terms of the agreement. It would be absurd to construe this language as an expansion of the “relinquishment” clause.
Second, the agreement does not declare that it operates as a renunciation of property interests or the extent of any renunciation. Even if we assume the “relinquishment” clause is a valid renunciation, it extends only to objections to the distribution of the estate.
We have examined the effectiveness of claimed renunciations in earlier cases. In Casagranda v. Donahue (1978), 178 Mont. 479, 585 P.2d 1286, the following statement in a letter from one joint tenant to the other was claimed to be a renunciation:
“As I told you in my last letter, Mickey, your money is yours to do with what you want. I hope you don’t feel an obligation to include me in your will . . .” Casagranda, 178 Mont. at 482, 585 P.2d at 1287-1288. We held that this statement was not a renunciation, stating:
“Respondent’s statement in a letter expressing her appreciation for being named in a Will cannot be construed in any manner to amount to a renunciation of her interest in the bank accounts. The accounts are not mentioned in the letter. Nothing is said about the devise or from what source it is to be made.”
Casagranda, 178 Mont. at 485, 585 P.2d at 1289.
In Lundgren v. Hoglund (Mont. 1985), [219 Mont. 295,] 711 P.2d 809, 42 St.Rep. 2031, judgment creditors attempted to reach trust income held under a spendthrift provision by contending that assignments by the beneficiary of a portion of the inherited estate amounted to a renunciation of the trust. We held there was no renunciation, stating “[t]he assignments did not declare the renunciation nor properly describe the interest renounced.” Lundgren, 711 P.2d at 814.
The fundamental rule in construing statutes is to give effect to the intention of the Legislature as expressed in the statute. In so doing, we must look to the plain language of the statute and the object sought to be accomplished. The thrust of our opinions in Casagranda and Lundgren, and what we now expressly hold, is that a renunciation of property rights or interests under Section 72-2-101, MCA, must be clear and unequivocal. That clearly was the intent of the legislature in specifically requiring a written renunciation, signed by the person renouncing, that it describe the property or interest, and declare the renunciation and its extent.
In the alternative, the appellants argue the agreement is ambiguous, and therefore, parol evidence should be heard to determine the parties’ intention. But upon our reasoning above, this avenue is of no assistance for if a renunciation is to be clearly and unequivocally stated in a written, signed and filed instrument, an ambiguity therein will render it ineffective as a matter of law. We find appellants’ argument equally unpersuasive because they argued to the District Court that the agreement was “clear and unambiguous on its face.” Ambiguity or not, there is no valid renunciation. Therefore, the District Court correctly granted the motion for summary judgment.
AFFIRMED.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES SHEEHY, GULBRANDSON and McDONOUGH concur.
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MR. JUSTICE SHEEHY
delivered the Opinion of the Court.
This action was commenced as an eminent domain proceeding brought by the City of Ronan (Ronan) to condemn land owned by the Lakes in furtherance of an airport expansion project. Donald and Bernadine Lake responded by seeking a preliminary injunction halting the action by Ronan, summary judgment and a delay in the proceedings. The Lakes also sought a preliminary injunction against Lake County prohibiting funding of Ronan’s actions. Following a hearing, the District Court of the Twentieth Judicial District, Lake County, issued orders denying the Lake’s motions and quashing the motion for preliminary injunction as to Lake County. We affirm.
The issues before the Court are:
1. Does formation of a joint airport board pursuant to Sections 67-10-204, -206, MCA, preclude independent exercise of the power of eminent domain by a member municipality for airport purposes?
2. Does Ronan’s independent eminent domain proceeding constitute a violation of the Lakes’ right to due process?
3. Did the District Court err in denying the Lakes’ application for a preliminary injunction against Ronan?
4. Did the District Court err in granting Lake County’s motion to quash the Lakes’ application for a preliminary injunction?
On October 16, 1947, Lake County, the City of Poison, the Town of St. Ignatius, and Ronan entered an agreement providing for the establishment of a joint airport board. As the original agreement neared its expiration date, the parties again joined together in an attempt to further the public good. On March 18, 1966, the parties entered an agreement for a term of 25 years which, as amended, provides, in pertinent part:
“I
“CREATION OF JOINT BOARD
“There is hereby created, pursuant to the provisions of Chapter 288, Laws of 1947, a Joint Airport Board, to have, and which shall have, the jurisdiction over the planning, acquiring, establishment, development, construction, enlargement, improvement, maintenance, equipment, operation, regulation, protection and policing of said joint airports or landing fields or other air navigation facilities established, owned or controlled, or to be established, owned or controlled by the county and cities and town aforementioned, located upon the sites above mentioned and which shall have, as well, jurisdiction over the airport hazards as authorized by Chapter 288, Laws of 1947.
“V
“POWERS AND DUTIES
“The Joint Airport Board created and established hereby shall have the following powers and duties:
“(1) To provide for the planning, acquisition, establishment, development, construction, enlargement, improvement, maintenance, equipment, operation, regulation, protection and policing of the joint airports or landing fields on the sites above described, and other air navigation facilities established thereon or to be established thereon and all airport hazards, but the said Joint Airport Board shall make no contract nor incur any obligation for such purposes, nor for any one of them, which singly or in the aggregate shall involve an expenditure of any more money than is available under the Joint Airport Board Budget for such purpose.”
The agreement does not vest the joint airport board with the power to tax or the power of eminent domain. In addition, although the agreement provides for joint ownership of the various airports, Ronan has held record fee simple title to the Ronan airport property since its construction in the early 1950’s. The controversy at hand arises as a result of Ronan’s efforts to condemn the Lake’s land in order to expand the airport without benefit of the consent and approval of the joint airport board.
On August 29, 1986, Ronan and Lake County jointly applied to the Federal Aviation Administration (FAA) for an airport expansion grant in order to fund acquisition of the land. Following approval of a $256,500 grant by the FAA, and written acceptance of the same by Ronan and Lake County, the money was deposited in the “Airport Fund for the City of Ronan.” Shortly thereafter, Ronan began eminent domain proceedings against the Lakes. Ronan’s efforts were funded by the “Airport Fund for the City of Ronan.”
EMINENT DOMAIN
The crucial question is the effect of the 1966 agreement entered into by Ronan and the other signators. The Lakes argue that as a result of the adoption of the joint airport board agreement, Section 67-10-205(2)(c), MCA, mandates that Ronan may bring an eminent domain proceeding for airport purposes only as a joint action with the other signators. We conclude, however, that the Lakes take an overly narrow view of Ronan’s power of eminent domain.
Generally, the power of eminent domain is viewed as an inherent attribute of sovereignty existing without reliance on constitutional acknowledgment. State v. Aitchison (1934), 96 Mont. 335, 341, 30 P.2d 805, 808. At its heart, the sovereign’s right of eminent domain is little more than an embodiment of the principle that the rights of the individual sometimes pale in comparison with the needs of the common welfare. Butte, Anaconda & Pacific Ry. v. Montana Union Ry. Co. (1895), 16 Mont. 504, 536, 41 P. 232, 243. It is a right necessarily incident to the government’s duty to serve the common need and advance the general welfare.
From the days of early statehood, the legislature has recognized the need to endow municipalities with the power of eminent domain for the good of the whole. Consequently, with the advent of the broad availability of commercial aviation, the 1947 Montana Legislature acted to ensure that Montanans would reap the benefits inherent in increased air service. See, Ch. 288, Laws of Montana (1947). Then, as now, “Expansion, not restriction, [was] the legislative watchword.” See Montana Talc Co. v. Cyprus Mine Co. (1987), [229 Mont. 491,] 748 P.2d at 444, 448, 44 St.Rep. 2161, 2166.
Chapter 288 of the Laws of Montana (1947), declared itself to be an act “providing for acquisition, construction, maintenance, operation, and regulation” of airports by municipalities and counties. In addition, the Act authorizes counties and municipalities to accomplish this task either jointly or separately, through the use of eminent domain. See, Ch. 288, Sections 3, 14, Laws of Montana (1947). However, consistent with the broad grant of authority embodied by the Act, and the earlier enactments of the 1929 legislature granting similar rights, the 1947 legislation did not specifically provide that the creation of a joint airport board constituted a waiver of the right to independent action. Both the 1929 and 1947 Acts, as codified in Title 67, Ch. 10, remain substantially unchanged.
At issue in the instant case is the interaction of the various sections of Title 67, Ch. 10. The statutes at issue provide in pertinent part:
“67-10-102. Acquisition and establishment of airports and landing fields. (1) Counties, cities, and towns in this state may, either individually or by the joint action of a county and one or more of the cities and towns within its border, acquire by gift, deed, purchase, or condemnation land for airport or landing field purposes and thereon establish, construct, own, control, lease, equip, improve, operate and regulate airports . . .
“(2) In addition a county, city, or town may do the acts authorized by this section by acting jointly with one or more counties, with one or more cities, with one or more towns, or any combination of such counties, cities, or towns . . .
“67-10-103. Public purpose. (1) Any lands acquired, owned, controlled, or occupied by any county, city, or town, individually or pursuant to joint action as herein provided for the purposes enumerated in 67-10-102, are acquired, owned, controlled, and occupied for a public use and as a matter of public necessity, and such counties, cities, and towns, whether acting individually or jointly, have the right to acquire property for such purposes under the power of eminent domain as and for a public use or necessity.
“(2) The acquisition of any land or interest therein pursuant to this chapter; the planning, acquisition, establishment, development, construction, improvement, maintenance, equipment, operation, regulation, protection, and policing of airports and air navigation facilities, including the acquisition or elimination of airport hazards; and the exercise of any other powers 'herein granted to municipalities and other public agencies, to be severally or jointly exercised, are public and governmental functions, exercised for a public purpose and matters of public necessity . . .
“67-10-201. General municipal powers (1) Every municipality may, out of any appropriations or other money made available for such purposes, plan, establish, develop, construct, enlarge, improve, maintain, equip, operate, regulate, protect, and police airports and air navigation facilities, either within or without the territorial limits of such municipality and within or without the territorial boundaries of this state, including the construction, installation, equipment, maintenance, and operation at such airports of buildings and other facilities for the servicing of aircraft or for the comfort and accommodation of air travelers and the purchase and sale of supplies, goods, and commodities as an incident to the operation of its airport properties. For such purposes the municipality may use any available property that it may now or hereáfter own or control and may, by purchase, gift, devise, lease, eminent domain proceedings, or otherwise, acquire property, real or personal, or any interest therein,
“67-10-202. Creation of board — funding — rules. (1) The county, city, or town, acting individually or acting jointly as authorized by 67-10-102, having established an airport or landing field and acquired property for such purpose, may construct, improve, equip, maintain, and operate the same and for that purpose may create a board or body from the inhabitants of such county, city, or town, or such joint subdivisions of the state for the purpose of conferring upon them, and may confer upon them, the jurisdiction for the improvement, equipment, maintenance, and operation of such airport or landing field ....
“67-10-204. Joint exercise of powers. (2) All powers, privileges, and authority granted to any municipality by this chapter may be exercised and enjoyed jointly with any public agency of this state and jointly with any public agency of any other state or of the United States to the extent that the laws of such other state or of the United States permit such joint exercise or enjoyment ....
“67-10-205. Joint airport board. (1) Public agencies acting jointly pursuant to 67-10-204 through 67-10-206 shall create a joint board which shall consist of members appointed by the governing body of each participating public agency .... The joint board shall have power to plan, acquire, establish, develop, construct, enlarge, improve, maintain, equip, operate, regulate, protect, and police any airport or air navigation facility or airport hazard to be jointly acquired, controlled, and operated; and such board may exercise on behalf of its constituent public agencies all the powers of each with respect to such airport, air navigation facility, or airport hazard, subject to the limitations of Subsection (2) of this section ....
“(2)(c) Eminent domain proceedings under 67-10-204 through 67-10-206 may be instituted only by authority of the governing bodies of the constituent public agencies of the joint board. If so authorized, such proceedings shall be instituted in the names of the constituent public agencies jointly, and the property so acquired shall be held by said public agencies as tenants in common until conveyed by them to the joint board.” (Emphasis added.)
By its terms, Section 67-10-205(2)(c), MCA, requires joint action when an eminent domain proceeding is brought pursuant to the authority of a joint airport board. However, it does not, on its face, preclude action separate and apart from the joint airport board. Statutes cannot be examined in a vacuum. Rather, statutes affecting the same topic should be read together and, if possible, harmonized so as to give effect to each of them. See, Schuman v. Bestrom (Mont. 1985), [214 Mont. 410,] 693 P.2d 536, 42 St.Rep. 54.
In the instant case, Sections 67-10-102, -103, -201, and -202, MCA, evidence a legislative intent to empower municipalities to act either jointly or independently. In addition, our state constitution demonstrates an intent to endow cities with a broad grant of power. “The powers of incorporated cities and towns and counties shall be liberally construed.” Art. XI, Section 4(2), 1972 Mont. Const. Further, when the authority of a city is in question, “every reasonable doubt as to the existence of a local government power or authority [is to] be resolved in favor of the existence of the exercise of that power or authority.” Section 7-1-106, MCA.
To limit the statutory scheme to the narrow interpretation suggested by the Lakes would fly in the face of both constitutional and legislative directive. We are not prepared to do so. Neither the joint airport board agreement nor any of the provisions of Title 67, Ch. 10, specifically prohibit the independent exercise of a municipality’s power of eminent domain. Rather the power in this case is expressly granted. We must conclude that Ronan acted within its statutory powers to exercise eminent domain.
DUE PROCESS
The crux of the Lakes’ due process argument is that it is unfair to allow Ronan to bring an independent eminent domain proceeding and thereby manipulate the geographical area subject to a public necessity determination. However, although ably argued, the Lakes are unable to cite authority in support of their contention. We conclude that such a failure is not the result of a lack of diligence, but rather reflects the lack of merit of the claim.
The right to due process guarantees that no person shall be deprived of property pursuant to eminent domain proceedings without adequate notice, a hearing and just compensation. See Housing Authority v. Bjork (1940), 109 Mont. 552, 98 P.2d 324. Ronan’s compliance with the eminent domain procedures contained within Title 70, Ch. 30, MCA, clearly satisfies those requirements.
PRELIMINARY INJUNCTION
As the Lakes’ claim to entitlement to a preliminary injunction was founded on the alleged statutory and constitutional violations committed by Ronan, the claim is clearly without merit. We therefore limit our discussion to the issue of the quashing of the application for preliminary injunction against Lake County.
The first allegation of error concerns the adequacy of the District Court’s order denying the Lakes’ application for preliminary injunction and granting Lake County’s motion to quash. Specifically, that the District Court failed to make adequate findings of fact and conclusions of law.
Pursuant to Rule 52(a), M.R.Civ.P., orders granting or refusing interlocutory injunctions shall be accompanied hy findings of fact and conclusions of law. See Ensley v. Murphy (1983), 202 Mont. 406, 658 P.2d 418. However, the extent of such findings and conclusions is necessarily dependent on the facts and circumstances of each case. Consequently, the litmus test in such cases is whether the District Court’s order sets forth its reasoning in a manner sufficient to allow informed appellate review. Accord, Clemans v. Martin (Mont. 1986), [221 Mont. 483,] 719 P.2d 787, 43 St.Rep. 994.
In the instant case, the District Court found that the Lakes’ prayer for relief failed because they retained a plain, speedy, and adequate remedy at law •— the Lakes complaint for damages. Although the court failed to state its findings and conclusions in the recommended form, the court’s reasoning is nevertheless clear. Under such circumstances, we conclude the Lakes’ specification of error is meritless.
In the second and third specifications of error, the Lakes contend that the District Court’s order is erroneous because the possible award of damages is not sufficient to remedy Lake County’s illegal funding of Ronan’s illegal eminent domain proceedings, and that the County’s action results in the indirect seizure of the Lakes’ land because the land will be held by the joint airport board. We disagree.
As noted above, Ronan is free to pursue independent eminent domain proceedings. Upon the successful completion of the eminent domain proceedings, and payment of just compensation, title to the property will be vested in Ronan alone. Neither Lake County nor the joint airport board will hold an interest in the property. The Lakes’ contention that Lake County is indirectly seizing their land must therefore fail.
In addition, the Lakes have made no showing that the funding of the project is unlawful. Lake County merely acts as custodian of the separate airport funds. When not bound by the procedural con straints of joint action under Section 67-10-201, et seq., MCA, Lake County remains free to release funds to Ronan upon lawful request.
The judgment is affirmed.
MR. JUSTICES HARRISON, WEBER, GULBRANDSON, HUNT, McDONOUGH and MR. CHIEF JUSTICE HASWELL, retired, sitting for MR. CHIEF JUSTICE TURNAGE, concur.
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MR. JUSTICE McDONOUGH
delivered the Opinion of the Court.
This appeal from the Ninth Judicial District presents a single issue for review: Should a new trial be ordered on damages under Gehnert v. Cullinan where the jury in its special verdict found both that plaintiff’s injuries were caused by defendant’s negligence and that plaintiff would incur future medical expenses for treatment of those injuries, yet failed to award plaintiff anything for future pain and suffering and other elements of damage?
We decline to order a new trial and affirm.
Appellant Walls sued respondent Rue for injuries stemming from an automobile accident which occurred on November 14, 1985. The action went to trial before a jury on July 1, 1987. At the end of the defendant’s case, the lower court directed a verdict for plaintiff Walls on the issue of liability. The jury was then instructed to determine damages by answering questions posed through a special verdict. The verdict form and the jury’s answers appeared as follows:
X Yes _No
If your answer is “yes,” go to the next question. If your answer is “no,” then skip the remaining questions and simply sign the verdict.
II. Was the Defendant’s negligence a cause of injury to the Plaintiff?
X Yes _No
If your answer is “yes,” go to the next question. If your answer is “no,” then skip the remaining questions and simply sign the verdict.
III. What is the amount of money that will compensate the Plaintiff for her injury?
Medical Expenses to Date: $2000,00
Future Medical Expenses: $2800,00
Pain and Suffering to Date: $ 100.00
Future Pain and Suffering: $ —
Lost Earnings to Date: $ —
Lost Earning Capacity: $ —
Loos of Enjoyment of Life to Date: $ 100.00
Future Loss of Enjoyment of Life: $ —
DATED this 3rd day of July, 1987.
s/ jury foreman
After the verdict, the District Court denied Walls’s motion for new trial for an inadequate award, and also denied Walls’s motion for reconsideration.
Walls argues on appeal that the jury’s failure to award more damages runs counter to the evidence. Walls speculates that the jury ignored the evidence showing her damages because some of the jurors, as revealed during voir dire, considered other jury awards excessive. Rue responds that the jury based its failure to award other damages on substantial credible evidence. We agree with Rue.
In Maykuth v. Eaton (Mont. 1984), [212 Mont. 370,] 687 P.2d 726, 41 St.Rep. 1800, the District Court held insufficient as a matter of law a $700 award for pain and suffering. We reversed holding that:
“To permit the undoing of this verdict by affirming the trial court decision granting a new trial, would, in the language of Nelson v. Hartman (1982), [199] Mont. [295], 648 P.2d 1176, 1179, 39 St.Rep. 1409, 1412, ‘. . . create a bench supremacy and sap the vitality of jury verdicts.’ While the trial court, or this Court sitting as a jury, or another jury, may have awarded plaintiff more for pain and suffering in the year following the accident, we cannot say as a matter of law that substantial evidence did not support the jury’s award.”
Maykuth, 687 P.2d at 727.
We have also emphasized that:
“Our function in reviewing the sufficiency of proof of actual damages is to determine whether there is substantial credible evidence in the record to support the jury’s verdict. We must view the evidence in a light most favorable to Lauman, the prevailing party below, and where the record presents conflicting evidence, resolved by the jury, this Court is precluded from disturbing the verdict. This rule is particularly applicable when the District Court has passed on the sufficiency of the evidence on motion for new trial and has upheld its sufficiency.”
Lauman v. Lee (Mont. 1981), 626 P.2d 830, 833, 41 St.Rep. 499, 502.
On the other hand, this Court has held that a jury’s failure to award damages for pain and suffering constituted an inadequate award where: >
“The evidence clearly indicates that the plaintiffs suffered serious and painful injury. The injury to Harold Gehnert’s back is such that it may have been rebroken and there was evidence that he was permanently injured and disabled. Lina Brenner suffered a relapse into a severe depression and while her physical injuries may have been modest, they were accompanied by pain. Her testimony indicated hair had been pulled from her head. The jury found in this case that the Cullinans committed wrongful acts toward the plaintiffs, and their attack on the plaintiffs was the cause of the injuries sustained. Liability having been established, it was the jury’s duty to award damages for pain and suffering for the serious injuries suffered.”
Gehnert v. Cullinan (Mont. 1984), [211 Mont. 435,] 685 P.2d 352, 354, 41 St.Rep. 372, 375.
Walls contends that in this case, as in Gehnert, the jury failed to award damages when evidence clearly showed injury due to the defendant’s conduct. Rue responds that the jury’s failure to award greater damages resulted from the defendant’s attacks on the credibility and certainty of evidence presented by Walls. To resolve this issue, a review of the medical evidence is necessary.
The injury occurred to Walls’s shoulder. X-rays taken shortly after the accident revealed no skeletal injuries, and the contusion to Walls’s shoulder was described by the treating physician as not serious.
However, medical testimony from depositions read into the record indicated that Walls’s shoulder did not heal properly. One physician’s impression was that Walls suffered from “rotator cuff tendinitis and possibly mild adhesive capsulitis of the left shoulder along with chronic cervical strain.” Another’s impression was “strain of the left shoulder with soft tissue tenderness and probably perifibrosis”. Both agreed that use of the shoulder in physical therapy could improve the condition. One physician explained:
“Perifibrosis basically is tightness of the tissues around the shoulder, and I think my impression was that her complaints and her findings were pretty much related to her shoulder girdle, including the area between her shoulder blades as [sic] the shoulder itself and that the perifibrosis is a stiffness or lack of resiliency of the muscles and ligaments because it’s been injured and protected and allowed to heal without motion or even if trying to move it, enough soreness was there to keep it from moving well, and that it was the lack of resiliency of the tissues, or the fibrosis of the tissues, that was causing a lot of the problems at the present time.”
A third physician provided no diagnosis for Walls stating that, “I don’t have a diagnosis for her. I don’t know why she has her symptoms.” A fourth suspected “vasomotor reflex sympathetic dystrophy syndrome”, and a fifth coined the condition as “chronic pain syndrome”, answering queries from counsel as follows:
“Q. Are you comfortable with your opinion that this is a permanent condition?
“A. I don’t think you can say any condition is permanent other than death, right. Hopefully her condition will improve and go away. But at this point in time, I think she has chronic pain syndrome. Hopefully it will be alleviated, but as to a time and a date and how long, I don’t think anybody in the world can tell you that.”
The physician testifying in the above quote also stated that his office notes indicated that Walls had a separate injury to her back after the accident. Another physician testified that the severity of the injury might have resulted from its interaction with a preexisting condition.
Walls and other witnesses testified that the injury caused loss of enjoyment and loss of past employment due to pain. Walls also presented evidence indicating that pain, loss of enjoyment, and loss of earning’s capability would continue into the future.
The defense presented no medical testimony of its own, but attacked the plaintiffs case by attempting to discredit Walls herself, and by pointing to the uncertainty characterizing the source, nature, and degree of the injury. For example, the defense contended that evidence showed: Walls had not properly documented her employment history after the accident, Walls had not properly followed physical therapy recommendations, and Walls engaged in activities which inferred that the injury was not restrictive. Rue also contended that the failure of one physician to diagnose a condition inferred the condition did not exist.
Rue’s contentions find support from evidence in the record, and viewing the evidence in a light most favorable to Rue, we hold that the record supports the adequacy of the award. Thus, Walls’ contention that the jury ignored damages from a clear injury fails.
Walls also argues that the jury’s failure to award anything for future pain and suffering, future loss of enjoyment of way of life, and future lost earning capacity, while at the same time awarding damages for future medical expenses, is illogical. This inconsistency, according to Walls, shows that the jury ignored the instructions on damages. We disagree.
Walls testified that:
“Q. So am I correct then that from the time you stopped therapy in Shelby which would be about February of ‘86 until January of ‘87 when you had Dr. Powell’s therapy through Mr. Havens, you didn’t [sic] not have therapy?
“A. No, I didn’t.”
The lower court instructed the jury that:
“It is the duty of a person who has been injured to use reasonable diligence in caring for her injuries and reasonable means to prevent their aggravation and to accomplish healing. When one does not use reasonable diligence in caring for her injuries and they are aggravated as a result of such failure, the liability, if any, of another whose act or willing omission was a proximate cause of the original injuries, must be limited to the amount of damage that would have been suffered if the injured person herself had exercised the diligence required of her.”
As set out in the medical testimony summarized above, at least one physician held the opinion that Walls suffered from perifibrosis, and that perifibrosis is a stiffness or lack of resiliency of the muscles and ligaments because of an injury which has been protected and allowed to heal without motion. The obvious inference is that Walls should have better pursued therapy following the termination of her treatment in Shelby, and the jury’s award for future medical expenses covers the treatment which should have been pursued earlier. Under these circumstances, the lack of an award for other future damages could have followed from the instruction set out above. We hold that Walls has failed to show that the jury ignored the instructions.
We affirm.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, WEBER and GULBRANDSON concur.
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On April 10, 1991, the Defendant was sentenced to twenty (20) years, dangerous, for Sexual Intercourse Without Consent, plus three (3) years for the Use of A Weapon. The sentences shall be served consecutively to each other. The defendant shall receive credit for 209 days time served, plus abide by all conditions set out in the April 10, 1991, Judgment.
On September 24,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and represented himself. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to waive his appearance.
The Sentence Review Board then advised the defendant that if he waived his appearance, the Board would dismiss his Petition for Sentence Review, and if he chose to reapply, there would be no guarantee that the matter would be heard. The defendant acknowledged that he understood and wanted to proceed with the waiver and did not want to go forward with the Sentence Review.
It is the unanimous decision of the Sentence Review Division that the matter is dismissed.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
|
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ME. CHIEF JUSTICE ADAIE:
Allen B. Hall on August 28, 1940, died intestate, leaving a small estate consisting wholly of personal property situate in Sanders county, Montana, where he resided. Hall left two surviving heirs-at-law, they being his widow, Huida A. Hall, the respondent herein, and Lucy Hall, a daughter by a former marriage, then aged 16 years, the appellant herein.
On September 23, 1940, the respondent widow, Huida A. Hall, was duly appointed and qualified as administratrix of her husband’s estate and on December 9, 1940, the court granted respondent a family allowance of $35.00 per month commencing on October 1, 1940.
At the time of her father’s demise, the appellant, Lucy Hall, resided at Whitefish, Montana, with her aunt, Lucy J. Hanson, and on May 2, 1941, on petition of the latter as guardian of appellant, the court granted appellant a like sum of $35.00 per month as a family allowance, also commencing October 1, 1940.
From October 1, 1940, to October 1, 1941, the receipts of the estate amounted to $1,552.00 while the disbursements totaled $1,515.50, leaving a balance on hand of only $36.50. During • . such period the respondent widow was paid the sum of $420.00 and the appellant daughter was paid the sum of $420.00, or a total of $840.00 pursuant to the family allowance orders of the court.
Funeral expenses and the expenses of administration have preference over the family allowance, E. C. M. 1947, see. 91-2404, and such expenses were paid by the administratrix out of the funds of the estate.
From October 1, 1941, to August 14, 1944, the administratrix received only the sum of $49.20. During such period covering some two years and ten months the estate was without funds to pay the family allowance for which reason no such allowance was paid to either the respondent widow or to the appellant daughter.
In July 1942, the appellant daughter attained the age of 18 years. Upon thus becoming an adult, E. C. M. 1947, sec. 64-101, appellant’s right to receive a family allowance under E. C. M. 1947, sections 91-2401, 91-2402 and 91-2403 terminated.
On November 28,1943, appellant was married to one Hurlburt. Thereafter appellant was required to look to her husband for her support and not to the estate of her father.
E. C.M. 1947, section 91-3604, provides: “The executor or administrator, as soon as he has sufficient funds in his hands, may pay the funeral expenses and the expenses of the last sickness, and the allowance made to the family of the decedent. * * * ”
Clearly the administratrix was not required to pay appellant’s allowance when there were not sufficient funds in the estate to pay same, In re Smith’s Estate, 118 Cal. 462, 50 Pac. 701; Niland v. Niland, 154 Wis. 514, 143 N. W. 170, nor was the representative required to pay the allowance out of her own funds. 2 Bancroft’s Prob. Prae., sec. 752, p. 1344.
So far as is shown by the record before us the decedent’s estate consisted of a boat, an old automobile, a few smaE pieces of furniture and a l/8th royalty interest in a mining claim. The respondent administratrix was not able to obtain possession of the boat which was taken to the home of Lucy J. Hanson at Whitefish, Montana, she being the sister of decedent, and the aunt and guardian of the appellant. The pieces of furniture and the automobile were in the possession of and adversely claimed by the party with whom the decedent was living at the time of his demise. The administratrix and her attorney both made a thorough investigation as to all the property and the attorney testified that the automobile had been wrecked; that it and the furniture in dispute were of insufficient value to justify the expenses of a suit to recover same and that the outcome of such an action, if instituted, would be exceedingly doubtful as the only witness who would contradict the representations of those asserting title to and adversely claiming the articles was dead.
The respondent administratrix sought to interest certain mining companies in working and leasing the mining claim. On January 18,1944, she petitioned the court for authority to accept a compromise settlement of 4% royalty on the estate’s l/8th interest in the mining claim, such royalty being the maximum that could be obtained through the Reconstruction Finance Corporation, the- lending agency with whom a $5,000.00 loan was being negotiated by a lessee mining company. After hearing had thereon, the court made an order granting respondent’s petition, wherein it expressly found the estate would be benefited thereby. Following the making of such order and in the period from August 14, 1944, to October 28, 1946, the lessee mining company paid to the respondent administratrix $793.79 in royalty, as is shown in the final account of the administratrix filed July 11, 1949. Of this aggregate amount the sum of $219.89 was expended by the administratrix in the payment of necessary expenses incurred in administering the estate, and the balance in the amount of $659.60 she paid to herself to be applied on the amount owing on the family allowance so granted her.
On July 20, 1949, the appellant Lucy Hall Hurlburt filed written objections to the final account of the administratrix wherein she demanded that the administratrix be required to pay the appellant the sum of $379.80, representing one-half of the $659.60 so received by the respondent and credited on the family allowance granted her.
A hearing was had on the final account and on appellant’s objections thereto, at which hearing both the respondent administratrix and her counsel testified and submitted to cross-examination by appellant’s counsel. Neither the appellant nor her counsel took the witness stand, nor was any testimony introduced in appellant’s behalf. Following the cross-examination of respondent’s counsel, the presiding judge inquired whether appellant had anything to submit on her side of the case, to which appellant’s counsel replied, “I don’t know whether this is proper or not. I would like to offer in evidence the entire file in connection with this case, and that is all we have to offer.” Thereupon the entire court file in the case was received in evidence.
October 11, 1949, following the hearing, the court made' an order wherein it denied appellant’s objections to the final account, decreed the settlement thereof and ordered distribution of the estate.
This is an appeal from such order and decree.
Counsel for the administratrix moved that appellant’s proposed bill of exceptions have incorporated therein the entire district court file in the case and, at the settlement of appellant’s proposed bill of exceptions, the district court announced: ‘ ‘ The entire file had to be considered by this court in making tlie order overruling the objections and such entire file should be. included in the transcript on appeal to the supreme court, and the clerk of this court is directed in making up such transcript on appeal to include the entire file. ’ ’
Notwithstanding the respondent’s precautions and the specific order and directions of the presiding judge, the entire district court file was not incorporated in the transcript on appeal filed in this court. The amendments proposed by respondent to the bill of exceptions were not incorporated in the record as is authorized by R. C. M. 1947, section- 93-5505, nor was there any application to this court for leave to correct such errors in the transcript as is authorized by R. C. M. 1947, sec. 93-8021. Omitted from the record filed by appellant’s counsel in this court are: (1) The inventory and appraisement of the estate; (2) The annual account of the administratrix filed October 3, 1941, and approved by the district court on December 10, 1941; (3) claim against the estate by one Mabel Ashcraft; (4) the papers and records pertaining to a suit brought against the administratrix by Mabel Ashcraft on her disallowed claim; (5) the papers, orders and records pertaining to the settlement by the administratrix of the Ashcraft claim and suit; and (6) the papers, proceedings and records relative to certain claims filed against the estate by the appellant Lucy Hall Hurlburt.
The court in its decree found that the automobile in question had been wrecked and was valueless; that no property remains on hand for distribution and that the estate is in a condition to be closed. The decree further approved, allowed, confirmed and settled all of the accounts and proceedings of the administratrix including her final account.
Where .the widow lacks the means essential for her support, her maintenance during the course of the administration of the estate is a matter of public concern. For this reason the widow’s claim to family allowance is strongly favored in the law. The statutes relating thereto rest in sound public policy and are to be liberally construed. Here, on appropriate petition, the district judge found the necessity for and granted a family allowance to the widow. While the judge subsequently made a like order for an allowance to decedent’s daughter yet, at a time when the estate was wholly lacking in funds to pay either allowance, the daughter’s right to an allowance became lost, first,— upon her attaining the age of eighteen years and next, — upon her marriage to Hurlburt. On the other hand the right of the widow to the allowance continued, it appearing she was still unmarried and in need at the time of the receipt of the royalty payments, all made long after appellant’s right to an allowance had terminated. Under these facts and circumstances the district judge in the lawful exercise of a sound discretion declined to order the needy widow to share her wholly inadequate mite with appellant.
We find nothing in the record showing any abuse of discretion on the part of the district court or which would warrant this court in modifying or changing the district court’s findings, order or decree in any particular. All appear to be supported by substantial evidence most of which stands uncontradicted. The order and decree are affirmed.
ASSOCIATE JUSTICES ANGSTMAN, METCALF, FREEVOURN and BOTTOMLY, concur.
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JUSTICE HARRISON
delivered the Opinion of the Court.
Appellant Donna Marry (Marry) appeals the Fourth Judicial District Court, Missoula County, order which amended its original findings of fact and conclusions of law in response to Maury’s motion for new trial and amendment of judgment. We reverse and remand.
The issue is whether the District Court abused its discretion by amending a finding of fact solely to support a conclusion of law, which barred Marry from recovering damages.
This case involved a motor vehicle accident between Marry and a Deputy Sheriff of the Missoula County Sheriff’s Department. The parties disputed liability; each party contended that the other was negligent per se.
The District Court heard the case without a jury and entered its original findings of fact and conclusions of law on March 19, 1993. Finding of Fact No. 7 read:
The collision was caused equally by [Many's] failure to yield the right of way and by [the] Deputy ... [who] exceeded] the speed limit.
Conclusion of Law No. 6 read:
The negligence of [Marry] and the negligence of [the Deputy] ... contributed equally to the accident barring recovery by either party. § 27-1-701 MCA [sic].
The court ordered that judgment be entered in favor of defendants with each party to pay their own costs.
On April 1, 1993, Marry moved the court to make additional findings of fact concerning her damages. She also moved the court for a new trial or in the alternative to amend Conclusion of Law No. 6 to conform with § 27-1-702, MCA. Marry argued that Finding of Fact No. 7 established that the parties were equally negligent and, thus, the clear mandate of § 27-1-702, MCA, required the District Court to amend Conclusion of Law No. 6 to entitle Marry to recover fifty percent of the damages she sustained in the accident.
In response to Marry’s motion for new trial and amendment of judgment, the District Court, on May 6,1993, entered an opinion and order. In that opinion and order, the court admitted that, given the facts, Conclusion of Law No. 6 was not consistent with Montana law on contributory negligence. See § 27-1-702, MCA. The court stated:
It was the intent of the [cjourt that [Marry] take nothing in this action. The [c]ourt’s finding of “equal” negligence allows for a recovery on the part of [Marry], That was not the [c]ourt’s intent.
The court then amended Finding of Fact No. 7:
The collision was primarily caused by [Marry’s] failure to yield the right of way, and secondarily by [the] Deputy ... [who] exceed[ed] the speed limit.
Further, Conclusion of Law No. 6 was amended to read:
The negligence of [Marry] being greater than the negligence of the Defendant, [Marry] is not entitled to recovery. § 27-1-701 MCA [sic].
The court also denied Marry’s motion for a new trial. Marry appeals the court’s decision to amend Finding of Fact No. 7.
Usually we will uphold a district court’s findings of fact if substantial credible evidence supports those findings. Emcasco Ins. Co. v. Waymire (1990), 242 Mont. 131, 135, 788 P.2d 1357, 1360; Robinson v. Schrade (1985), 215 Mont. 326, 328, 697 P.2d 923, 925. However, when, as here, a district court amends a finding of fact to support a conclusion of law, we will review whether the district court abused its discretion. See Steer, Inc. v. Dep’t of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.
Marry maintains that the District Court abused its discretion by failing to follow the mandate of Rule 52(a) and (b), M.R.Civ.P., which require the court to find the facts first and then base its conclusions of law on those facts and to only amend its findings after reviewing the evidence in the record. Marry argues, and we agree, that the District Court amended Finding of Fact No. 7 solely to support Conclusion of Law No. 6 which prohibited her from recovering damages.
Rule 52(a), M.R.Civ.P., requires the district court to “find the facts specially and state separately its conclusions of law thereon....” Rule 52(b), M.R.Civ.P., states that “the [district] court may amend its findings or make additional findings and may amend its judgment accordingly.” The court must, however, review the evidence in the record before amending its findings. See Ring v. Hoselton (1982), 197 Mont. 414, 422, 643 P.2d 1165, 1170. Read in conjunction, Rule 52(a) and (b), M.R.Civ.P, compel the district court to find the facts first and review the record prior to amending its findings of fact. Rule 52(a), M.R.Civ.P., also requires the court to base its conclusions of law on the facts that it finds.
Initially, here, the District Court found that Marry and the Deputy were equally responsible for the collision. The court then erroneously concluded that neither party could recover damages under § 27-1-702, MCA. Following Marr/s motion for a new trial and amendment of judgment, the court admitted that Conclusion No. 6 was not consistent with Montana law and that Finding No. 7 did not support the result it desired to achieve. Thus, the court amended Finding No. 7 and Conclusion No. 6 in its opinion and order. The court clearly noted that its intent in amending Finding No. 7 was to prevent Marry from recovering damages.
The District Court did not, as required by Rule 52(b), M.R.Civ.P., review the evidence in the record when it amended Finding of Fact No. 7. In fact, the court, in its order, failed to state that it reviewed the evidence and determined that Finding of Fact No. 7 was incorrect. Instead, the District Court amended Finding No. 7 because it desired to preclude Marry from recovering damages.
Moreover, we note that both the original and amended Conclusion No. 6 dictated that Marry was barred from recovering damages. The District Court did not find the facts first, as required by Rule 52(a) M.R.Civ.P. Instead, the court fashioned a conclusion of law which barred Marry from recovering damages and then found facts to support that conclusion. We hold that the District Court abused its discretion when it arbitrarily, without reviewing the record, formed the facts to fit its already-fashioned conclusion of law.
We reverse and remand this case to the District Court with instructions to reinstate original Finding of Fact No. 7 and to amend Conclusion of Law No. 6 so that it is consistent with Montana law. Further, the District Court is directed to make findings as to Many’s damages and enter judgment in favor of Marry to recover half of her damages.
Reversed and remanded with instructions.
JUSTICES GRAY, TRIEWEILER, HUNT and WEBER concur.
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MR. JUSTICE HASWELL,
delivered the Opinion of the Court.
This is a Workmen’s Compensation Act appeal by the employer from a judgment of the district court of Silver Bow County awarding $3,000 to the nonresident, nondependent, surviving mother of an employee killed in a mine accident.
The facts are undisputed. James Dunphy, the employee, was killed in an industrial accident on May 2, 1966, in the Leonard Mine of his employer, The Anaconda Company, in Butte. At the time of his death he was single and left surviving him only his mother, Margaret Dunphy, the claimant in the case. At the time of her son’s death, claimant resided in County Kilkenny, Ireland, was a native of that country, and was not dependent on her son.
Claimant filed her claim with the Industrial Accident Board under the provisions of the Montana Workmen’s Compensation Act. The Board’s order awarded her $3,000, the employer appealed to the district court, and the district court entered judgment affirming the Board’s order. The employer appealed the district court judgment to this court.
There is only one issue presented for review upon this appeal, viz: Where an employee killed in an industrial accident leaves no beneficiaries or major or minor dependents, is his nondependent surviving parent residing outside the United States at the time of his death entitled to payment of $3,000 under the Montana Workmen’s Compensation Act?
The basic statute involved is section 92-704, R.C.M.1947, as amended, which governs payment of death claims due to industrial accidents. This statute first provides for payments to beneficiaries residing within the United States followed by a provision for lesser payments to beneficiaries residing outside the United States. Next the statute provides that if the decedent leaves no beneficiaries, then payments are to be made to major dependents residing in the United States and if there are none, then lesser payments to minor dependents residing in the United States. The next paragraph of the statute states: “If the decedent leaves no major or minor dependents a lump sum in the amount of three thousand and no/100 dollars ($3,-000.00) shall be payable to his surviving parent or parents.” In the instant case we are called upon to interpret the meaning of the quoted words and whether they authorize the award in the instant case.
At the outset it should be noted that the statute in question, excluding the quoted words added by legislative amendment in 1957 which we are called upon to construe here, provides (1) for payment of lesser amounts of compensation to nonresident “beneficiaries” than to resident “beneficiaries” and (2) where there is no “beneficiary”, for payment of compensation to “major” or “minor dependents” residing in the United States without provision for any payment to “major” or “minor dependents” residing outside the United States. Speaking in general terms, “beneficiaries” under the Act are the surviving spouse and minor children, “major dependents” are surviving parents, and “minor dependents” are brothers and sisters under 18 years of age:
The substance of the employer’s argument in the instant case is that the fundamental consideration in construing the quoted words of the statute in question is the determination of legislative intent; that in determining legislative intent, this court must look not only to the literal meaning of the words used, but also must read such words in context with the Act as a whole, in pari materia with other provisions in the Act, and in light of the legislative history of the statute itself and the Act as a whole; that when so read and considered, a consistent legislative intent to discriminate against nonresidents is apparent; that this legislative intent is paramount and requires this court to imply these words at the end of the quoted portion of statute relating to payment of $3,000 to surviving parents, “if residing within the United States at the time of the injury;” that otherwise an absurd result would follow in direct conflict with legislative intent, viz., that the Legislature intended to grant benefits to non-dependent, nonresident parents and to deny benefits to dependent, nonresident parents. The employer then goes on to contend that therefore the Legislature must have intended to deny benefits to nondependent, nonresident parents, the statute should be so construed, and benefits denied to claimant in this case.
Claimant, on the other hand, while agreeing that legislative intent is the controlling consideration in construing the statute in question, contends that where the statute is clear and unambiguous on its face, as is the case here, the court cannot add words that have been omitted, at least where there is no compelling reason for doing so, as in the instant case. Claimant proceeds to argue that the statute does not produce an absurd result because a dependent, nonresident parent is entitled to receive $3,000 as well as a nondependent, nonresident parent; that if the statute unjustly penalizes a nonresident parent, that question is not involved in determination of this case, and in any event is a matter for the Legislature and not for the courts. Claimant goes on to suggest that the reason the Legislature excluded dependent, nonresident parents may well have been because of practical problems involved in determining dependency of persons residing in foreign countries. Claimant finally argues that in eases where doubt exists between two possible interpretations of the "Workmen’s Compensation Act, one of which would deny the compensation under the Act and the other grant compensation, the required liberal construction of the Act compels that interpretation which grants payment of benefits.
"With this background and these contentions, we proceed to construction of the statute in question, section 92-704, R.C.M.1947, as amended to the date of the injury and death of the employee. In construing a statute, the intention of the Legislature is controlling. (Section 93-401-16, R.C.M. 1947; State ex rel. Williams v. Kemp, 106 Mont. 444, 78 P.2d 585; Purcell v. Davis, 100 Mont. 480, 50 P.2d 255; State ex rel. Snidow v. State Board of Equalization, 93 Mont. 19, 17 P.2d 68; McNair v. School District, 87 Mont. 423, 288 P. 188, 69 A.L.R. 866.) Although various rules of statutory construction have been developed and employed in diverse cases that have come before this court in the past, we consider the following to be applicable to the instant case in determining legislative intent. The intention of the Legislature must first be determined from the plain meaning of the words used, and if interpretation of the statute can be so determined, the courts may not go further and apply any other means of interpretation. (State ex rel. Board of Commissioners of Valley County v. Bruce, 106 Mont. 322, 77 P.2d 403, certiorari granted by United States Supreme Court, 305 U.S. 581, 59 S.Ct. 70, 83 L.Ed. 366, affirmed 305 U.S. 577, 59 S.Ct. 465, 83 L.Ed. 363; Jensen v. Safeway Stores (D.C. Mont.), 24 F.Supp. 585; Doull v. Wohlschlager, 141 Mont. 354, 377 P.2d 758, 759; Green v. City of Roundup, 117 Mont. 249, 157 P.2d 1010; Mills v. State Board of Equalization, 97 Mont. 13, 33 P.2d 563.) Where the language of a statute is plain, unambiguous, direct and certain, the statute speaks for itself and there is nothing left for the court to construe. (Doull v. Wohlschlager, supra; Montana Chapter, National Electrical Contractors Ass'n v. State Board of Education, 137 Mont. 382, 352 P.2d 258; Vaughn & Ragsdale Co. v. State Board of Equalization, 109 Mont. 52, 96 P.2d 420.) The function of the court is simply to ascertain and declare what in terms or in substance is contained in the statute and not to insert what has been omitted. (Section 93-401-15, R.C.M.1947; Foreman v. Beaverhead County, 117 Mont. 557, 161 P.2d 524; Siuru v. Sell, 108 Mont. 438, 91 P.2d 411, 123 A.L.R. 423.) In short, it is simply the duty of the Supreme Court to construe the law as it finds it. (State ex rel. Burns v. Lacklen, 129 Mont. 243, 284 P.2d 998; Montana Beer Retailers Protective Association v. State Board of Equalization, 95 Mont. 30, 25 P.2d 128; Great Northern Utilities Co. v. Public Service Commission, 88 Mont. 180, 293 P. 294.)
Applying the above principles to the statute involved in the instant ease, we hold that the words of the statute are plain, unambiguous, direct and certain; that they admit of only one meaning; that there is nothing left for us to construe; and that the duty of the Supreme Court herein is simply to declare what in terms is contained in the statute, and not to insert a limitation not contained therein. Accordingly, we hold that section 92-704, means exactly what it says, viz., that the sole surviving parent of a workman killed in an industrial accident who is covered by the Montana Workmen’s Compensation Act and who leaves no beneficiaries or major or minor dependents within the meaning of the Act is entitled to payment of $3,000 without limitation as to residence. Where the language of the statute is clear, no purpose is served by going beyond such plain language, and answering the other contentions raised by defendant.
The judgment of the district court awarding claimant $3,000 is correct and it is affirmed.
MR. CHIEF JUSTICE JAMES T. HARRISON, and MR. JUSTICES ADAIR, CASTLES and JOHN C. HARRISON, concur.
|
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MR. JUSTICE CASTLES
delivered the Opinion of the Court.
Involved is an attack on a jury verdict and the resulting judgment for defendant Earl J. Green, on the basis of the absence of the presiding judge and an affidavit of all twelve jurors certifying that “If the Presiding Judge had been available to answer our questions we certify that the verdict would have been different * *
Plaintiffs, Charles G. Johnson and Eunice Johnson, allegedly rented a building in Anaconda to defendant from February 1, 1964 to December 22, 1964, at a rental of $150 per month for a laundry business. Plaintiffs alleged they were not paid the rental and sued to recover, plus damages for repairs and replacement and for attorney fees. The total amount sued for was $2,346.25.
The defendant denied renting the building for the period of February 1, 1964 to December 22, 1964, denied damage and denied any contract for attorney fees. Defendant counterclaimed asserting renting from January 1, 1961 to October 31, 1963 and that during that time the roof leaked causing damage to equip ment and clothing and sought the sum of $2,980.37 as damages.
Trial was had; Evidence presented and both sides rested.
Judge Nat Allen, the presiding judge, who assumed jurisdiction after the local judge was disqualified, instructed the jury and then stated:
“Ladies and gentlemen of the Jury. The attorneys have kindly consented that Judge Stewart may take the verdict in this ease, and when you come back I will be headed for Roundup, and Judge Stewart will be here to take the verdict, and I thank both attorneys for so stipulating. I want to thank the Jury for your kind attention to this case — you have been very good, and I know that it is a hard case to sit and listen to in those hard chairs — some of you have been complaining about the hard chairs, and I have spoken to Judge Stewart about this, but, of course, I don’t guarantee that the next time they are going to be soft, but at least he has the information. I want to commend the attorneys for their fine presentation of this case, and I must say that it is always a pleasure to preside before two attorneys with the integrity and ability that you gentlemen have shown on both sides of this ease, and it certainly was a pleasure to be here in Anaconda, and I think I should thank you very kindly, both of you.”
The jury then retired and brought in a verdict, which read, in pertinent part: “We, the jury in this action, find for the Defendant. Dated this 5th day of October, 1967.” The verdict was received by Judge Stewart and judgment entered thereon for costs.
We have only a partial transcript showing the remarks of Judge Nat Allen previously quoted and the agreement of counsel to those remarks. We also have the original court file and the exhibits contained in the court file and the instructions given. We are told, without dispute, that the jury was furnished with two forms of verdict, one for the defendant and one for the plaintiffs. The verdict form for the plaintiffs had a blank, which was to be filled in with the amount if the verdict was in favor of the plaintiff. As related before, the jury used the-form for the defendant with no amount or no blank. The judgment was for costs of $26.50, dated October 11, 1967.
Subsequently on October 20, 1967, a notice of intention to move for a new trial was filed which listed among other grounds charges of irregularity of the jury proceedings. The motion for new trial was based in part upon an affidavit of the jurors. The affidavit, dated October 13, 1967, signed by all twelve jurors read as follows:
“We, the undersigned Jurors, in the above entitled case do hereby state that we were in favor of the plaintiffs having our verdict in the above entitled case but we were under the impression that our verdict for the plaintiffs would necessarily have to award them the full amount and many of us did not think that the plaintiffs should have the full amount although they should have some amount awarded in their favor. We were told that the Presiding Judge was leaving Anaconda as soon as we retired to the jury room and so we were of the opinion we could not have our questions answered as to whether or not we could award the plaintiffs less than the full amount asked by them. We finally decided it had to be the full amount or nothing. If the Presiding Judge had been available to answer our questions we certify that the verdict would have been different and for that reason we are signing this affidavit in support of the plaintiffs’ motion for a new trial because we now know that we could have awarded the plaintiffs something less than the full amount.”
Two other affidavits were filed by counsel for the defendant. One juror averred that on the first ballot the vote was six to six. The second affidavit was by the bailiff who states that no request was made by any juror during its deliberations.
The motion for new trial was denied by Judge Allen after oral argument and briefs; this appeal followed raising two stated issues: first, that error was committed by the presiding judge leaving the trial court; and, second, that plaintiff was de uied due process of law. On this second so-called issue, the assertion is that because the judge was absent the jurors could not have answers to their questions and thereby a fair trial was ■denied.
It is immediately apparent that when counsel agreed do Judge Allen leaving the district with Judge Stewart being present to take the verdict that they should not be heard to complain on appeal. The instructions given were quite simple, no problem over the issues is apparent. No instruction specifically on damages was given, and we assume none was offered by plaintiffs other than the form of the verdict with a blank to be filled in. We can assume too, that counsel in his closing argument discussed the matter of damages.
While we do not approve of judges leaving the trial while a .jury is deliberating, yet where counsel accedes to it specifically .he will not be heard to complain on appeal. See State v. Oakland & Friedlund, 129 Mont. 347, 287 P.2d 39.
The rule is generally stated that the propriety of a trial .judge’s remarks (or conduct) where not objected to cannot be raised on appeal. Batchoff v. Craney, 119 Mont. 157, 172 P.2d; 308; also, New York Life Ins. Co. v. Gamer, 9 Cir., 90 F.2d 817, ceriorari granted 302 U.S. 670, 58 S.Ct. 46, 82 L.Ed. 517, reversed 303 U.S. 161, 58 S.Ct. 500, 82 L.Ed. 726, 114 A.L.R. 1218.
But we go one step further. The rule in Montana is that a jury may not impeach its own verdict based on mistake of the evidence or misapprehension of the law. See Putro v. Baker & Mannix Electric, 147 Mont. 139, 410 P.2d 717; Goff v. Kinzle, 148 Mont. 61, 417 P.2d 105; Clark v. Wenger, 147 Mont. 521, 415 P.2d 723. In these three cases misconduct of a juror or the jury was the matter reached. In the instant case the jury is attempting to impeach its own verdict, based on mistake of evidence or misintrepretation of instructions. Further, the jury was informed that Judge Stewart was present. It did not attempt to ask any questions. Clearly its conduct comes under the rules stated above.
Finding no error, tbe judgment is affirmed.
ME. CHIEF JUSTICE JAMES T. HAEEISON, and ME. JUSTICES JOHN C. HAEEISON, HASWELL, and BONNEE, concur.
|
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MR. JUSTICE DALY
delivered the opinion of the Court.
This is an appeal of two summary judgments issued by the District Court of the Eighteenth Judicial District, Gallatin County.
Respondent, Larry Joe Hillard, is the son of respondent, Larry Hillard. In March 1979 the son sold a hotel in Three Forks, Montana, to appellant, Roger Jenkins. The father (hereinafter referred to as Hillard) showed appellant the hotel, conducted the contract negotiations for its sale, and signed the contract for sale as his son’s attorney-in-fact.
Negotiations for the sale of the hotel occurred over about a six-month period. During this time, appellant lived in Seattle and came to Three Forks whenever Hillard was free to discuss the sale.
Appellant inspected the hotel thoroughly only once and was accompanied by Hillard. Appellant claims that during this inspection Hillard told him that the hotel building was in excellent condition and that it was for sale because Hil-lard was tired of managing it for his son. Concerning the condition of the heating system, appellant in his deposition claims that Hillard made the following representations:
“Q. And when you got specifically to the boiler room, or you know, the area which contained the boilers and the heating system, did he make any statements concerning the condition of those things? A. Yes. He stated that the — let me preface that. There was about two and a half inches of water on the floor in the boiler room and right away I questioned that and I was told that there was about a 400-gallon hot water holding tank and water was leaking out of it and it had a patch on it and I asked him what that was, and he said, ‘Well, there’s a small crack in the holding tank and that can be welded,’ and he had checked with local welders and he was assured that it could be welded, so it was inconsequential. At that time I asked him what condition the boilers were in and he told me that they had a slight problem with the pilot light and that there was no problem with that, but that it was only an adjustment. I was assured that both the heating system and the boilers were more than adequate.”
Appellant also stated that the manager of the hotel prevented him from making furthur inspections of the building. When appellant told Hillard that the manager had prevented his further inspections, Hillard told appellant he would take care of the situation. Appellant did not try to inspect the premises after this conversation with Hillard.
In his deposition, Hillard stated that he thought the heating system was operating properly. Hillard also said he did not recall making comments on the condition of the boilers.
Appellant purchased the hotel in March 1979, and about the second week in April he discovered that the boilers did not work properly. Appellant stated that he then spent about $35,000 to repair and rebuild the hotel’s heating system.
The contract for sale of the hotel contained the following provisions:
. .Buyer has inspected and is familiar with the premises and the physical condition of all the furniture, fixtures and equipment and improvements thereon and therein, and enters into this Agreement on his own independent investigation.” and
“This contract contains the entire agreement between the parties and the Buyer affirms that neither Seller nor any agent of the Seller has made any representations or promises with respect to or affecting the property herein described on this contract not expressly contained herein and that Buyer affirms that he relies upon his own personal observation and examination of the property herein described.”
Appellant had given Hillard a $15,000 promissory note as part of the transaction. $5,000 was payable on the note on March 1, 1979, and $10,000 payable on or before August 30, 1979.
In January 1980 Hillard brought an action on the note, claiming that appellant failed to pay the $10,000 due on August 30, 1979. In March 1980, the appellant brought a new and independent action against both the son, as seller, and the father, as the son’s agent, alleging that the father had fraudulently misrepresented the condition of the hotel’s heating system.
In April 1980, the appellant answered Hillard’s complaint, alleging as an affirmative defense that Hillard fraudulently misrepresented the condition of the hotel’s heating system and counterclaiming for a return of the $5,000 he already paid on the note.
Hillard moved for summary judgment on his promissory note action and on the fraud action began by appellant. The District Court granted both motions for summary judg ment. The District Court found that appellant had ample opportunity to inspect the hotel and that he understood the clauses of the contract in which he affirmed sole reliance on his own inspection. The District Court concluded, as a matter of law, that appellant had failed to make a prima facie showing that he had the right to rely on Hillard’s alleged misrepresentations.
The sole issue on review is whether the District Court erred in granting both summary judgments.
Under Rule 56(c), M.R.Civ.P., a summary judgment is proper only when there is no genuine issue of material fact and when the moving party is entitled to a judgment as a matter of law. Summary judgment is therefore not a proper tool for resolving disputed issues of fact and is accordingly improper whenever a material factual matter is in dispute. Flanagan v. Curran (1974), 164 Mont. 262, 521 P.2d 200. Moreover, the party opposing the motion, appellant, will be indulged to the extent of all inferences which may be reasonably drawn from the record. Equity Cooperative Ass’n v. Bechtold (1977), 173 Mont. 103, 566 P.2d 793.
Here, there is at least one blatant issue of fact: whether Hillard made a willful misrepresentation to appellant concerning the condition of the heating system.
Hillard, as respondent, argues that even if it can be shown that he made the misrepresentations, appellant cannot make a prima facie showing that he had the right to rely on the representations. In particular, respondent claims that the contract provision and appellant’s opportunity to inspect the hotel preclude appellant’s right to rely on Hil-lard’s representations, however false. We-disagree.
It is well established in this state that actual fraud is a question of fact. Section 28-2-404, MCA; Cowan v. Westland Realty Company (1973), 162 Mont. 379, 512 P.2d 714; Poulsen v. Treasure State Industries, Inc. (1981), Mont., 626 P.2d 822, 38 St.Rep. 218. Further, this Court has recognized the rule that “fraud vitiates every transaction and all contracts.” Bails v. Gar; (1976), 171 Mont. 342, 558 P.2d 458, 461. The reasoning behind this rule is that a party who has perpetrated fraud by inducing another to enter into a contract may not then use the contract to immunize himself from the fraud. Bails, 558 P.2d at 461-462. The contract provision therefore does not preclude proof that a prior oral representation was made and relied upon.
Respondent contends that Schulz v. Peake (1978), 178 Mont. 261, 583 P.2d 425, should control our interpretation of the contract for sale. In Schulz, this Court construed a contract provision similar to the one in this case and stated that because the provision was unambiguous, the court’s duty was to enforce it. Schulz is not controlling here for the simple reason that in Schulz a trial was had and findings of fact were made that no misrepresentations were made and no fraud committed. Here, appellant was not given the opportunity to show that misrepresentations were made and fraud committed.
Respondent cites Van Ettinger v. Pappin (1978), 180 Mont. 1, 588 P.2d 988, and Lowe v. Root (1975), 166 Mont. 150, 531 P.2d 674, to support his argument that because appellant inspected the premises he cannot, as a matter of law, be allowed the right to rely on a representation, whether true or false. In particular, respondent cites this often quoted passage in Van Ettinger:
“ ‘When it appears that a party, who claims to have been deceived to his prejudice, has investigated for himself or that the means were at hand to ascertain the truth ... of any representations made to him, his reliance upon such representations made to him, however false they may have been, affords no ground of complaint. (Grindrod v. Anglo-American Bond Co., 34 Mont. 169, 85 P. 891; Power & Brothers v. Turner, 37 Mont. 521, 97 P. 950; 26 C.J. 1149.)’ ” (Emphasis added.) 588 P.2d at 994, quoting Lee v. Stockmen’s National Bank (1922), 63 Mont. 262, 284, 207 P. 623, 630.
Respondent has placed an unnecessarily harsh interpretation on the above passage. In Van Ettinger the party claim ing fraud knew the falsity of the representation and therefore no evidence could be presented to show the right to rely on the representation. In Lowe a superficial inspection of the building would have revealed the open and notorious deficiencies in the building. That is simply not the case here.
Appellant acknowledges that upon his inspection he found two inches of water in the basement. Respondent claims that the presence of the water should have put appellant on inquiry that the boilers were defective. Appellant, indeed, was put on inquiry. According to his deposition, appellant asked Hillard why the water was there and Hillard replied that the boilers needed only minor repairs, allegedly misrepresenting the true condition of the boilers. Moreover, appellant may have been prevented from further access to the hotel in order to investigate Hillard’s alleged misrepresentations. Appellant stated in his deposition that the manager of the hotel would not let him freely inspect the premises.
Van Ettinger and Lowe do not stand for the proposition that a buyer must assume a seller or his agent is lying when the buyer is told a plausible explanation for a defect and what is required to cure the defect. The Kansas Supreme Court has expressed the limitations that need to be placed on the Van Ettinger and Lowe cases:
“ ‘The trend of the decisions of the courts of this and other states is towards the just doctrine, that where a contract is induced by false representations as to material existent facts, which are made with the intent to deceive, and upon which the plaintiff relied, it is no defense, to an action for rescission or for damages arising out of the deceit, that the party to whom the representations were made might, with due diligence, have discovered their falsity, and that he made no searching inquiry into facts . . .’ ” Nordstrom v. Miller (1980), 227 Kan. 59, 605 P.2d 545, 553, quoting Speed v. Hollingsworth (1894), 54 Kan. 436, 440, 38 P. 496, 497.
Opportunity to inspect in itself is no defense to possible willful misrepresentations that, because of their plausibility, preclude further investigation. See also, Shechter v. Brewer (Mo.1961), 344 S.W.2d 784, and Lumby v. Doetch (1979), Mont., 600 P.2d 200, 36 St.Rep. 1684.
The District Court therefore erred by holding that appellant failed to make a prima facie showing that he had a right to rely on Hillard’s alleged misrepresentations. Since the record reflects other genuine issues of material fact, such as, whether Hillard made fraudulent representation, whether appellant relied on those representations, and whether appellant had the opportunity to further investigate Hillard’s alleged representations, the summary judgments are reversed. The cases are joined and remanded to the District Court.
MR. JUSTICES HARRISON, MORRISON and WEBER concur.
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On October 7, 1992, the Defendant was revoked and was sentenced to twenty (20) years on each of two counts for Sexual Assault; and twenty-five (25) years for Sexual Intercourse Without Consent; all sentences to run concurrently; the Defendant shall be considered a dangerous offender and not be considered for parole until he has successfully completed the Sexual Offender Treatment Program at which time he may be given a non-dangerous offender status. Credit for 51 days time served.
On May 6,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
DATED this 6th day of May, 1993.
The Defendant was present and proceeded pro se. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he did not wish to proceed because his attorney was not present.
IT IS HEREBY ORDERED that the application for review of sentence shall be dismissed with prejudice with leave to refile at a later time.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
|
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MR. JUSTICE JOHN C. HARRISON
delivered the Opinion of the Court.
Appeal from the district court of Lincoln County. George H. Fox, plaintiff-respondent, instituted this action against Fifth West Inc., a Washington corporation, alleging breach of a valid oral contract for employment. The cause was tried by a jury and a verdict was rendered in favor of the plaintiff-respondent in the amount of $6,037.50 ($5,400 wages; $350 expenses; $278.50 hauling a trailer). From this judgment the defendant-appellant employer appeals.
The appellant successfully bid a government construction contract for the sum of $1,044,500 to construct a resident engineers’ and visitors’ facility on a mountainside overlooking the Libby Dam near Libby, Montana. The contract required that the job was to begin in August 1966 and was to be completed in 360 days. This was the appellant’s first work in Montana.
The respondent is an experienced construction man with well over 30 years of experience. He had considerable foreman-superintendent experience on large construction projects and had built a number of homes in the Billings area. Much of his experience involved working with concrete and reinforcing steel.
In August 1966 he was looking for work and saw in the local paper the announcement that the appellant was the low bidder on the aforementioned work at the Libby Dam. He called the appellant’s home office in Seattle and at the request of appellant sent in a resume of his background and work experience. Within a week or 10 days he received a call from Mr. Hedreen, president of appellant corporation, and according to the respondent he told Mr. Hedreen he wanted $200 per week and expenses. He testified that the $200 was agreed upon and that the expense item could be decided upon when he got to Libby. The respondent then went immediately to Libby and the next morning early he met with Mr. Hedreen when the salary was reaffirmed and a $50 per month living allowance was arranged. This $50 was paid once though appellant Hedreen denied any expense arrangement with respondent. The respondent also testified that on the basis of conversation he had with Hedreen he had his wife purchase a trailer house in Billings and Hedreen agreed to pay for the hauling from Billings to Libby (1150 miles at .50 per mile=$575). This agreement also was denied by Hedreen.
Respondent worked 7 weeks as a carpenter foreman and was then fired. The appellant contends he had respondent fired due to his inability to get along with his crew and due to mistakes made in setting certain footings. "The respondent testified that he was fired because after telling his supervisor Calhoun that half the steel rebars had been left out of a concrete retaining wall that measured 189 feet in length and varied from 16 feet to 23 feet high, and being told to mind his own business, that he had reported the omission to the inspector for the Army Corps of Engineers. This conversation with the inspector was verified at the trial. The appellant acknowledged the omission in the wall, some 8 tons, and admitted that when the omission was disclosed he talked with Calhoun, Jack Mack, a supervisor, and respondent about what should be done with the remaining steel. The respondent’s version of the above incident was that Hedreen mentioned the possibility of burying the steel and this was not denied. However, appellant’s president, Hedreen, contends that he had discovered the omission, not respondent, and when the Army inspector brought it to his attention he rebuilt ■the wall and put in the required steel.
Though the appellant set forth some ten issues for consideration, each of which has been given careful consideration, we find that a number are interconnected and we therefore will consider them as follows:
Concerning the first issue the appellant made a motion (prior to trial) to limit the argument with reference to the omission of the steel from the building and the court had ordered that no reference to such omission or alleged omission should be made without the laying of a sufficient evidentiary basis for the admission of evidence concerning such omission. Despite this preliminary order of the court the respondent’s counsel in his opening statement said: ‘ ‘ Our evidence will show by Mr. Fox that he felt that one of the retaining walls was not ade quately reinforced by steel rebars. He complained about this to Mr. Calhoun; his complaints were ignored; finally they had a meeting about this and Mr. Fox will testify that Mr. Hedreen suggested burying some steel rebars * * Appellant’s counsel objected and moved for a mistrial, and the court sustained his objection but denied a mistrial. We find no error in the court’s ruling at this early stage of the trial and note later that the respondent as well as appellant did submit evidence concerning the incident to the jury for their consideration. In addition we note that the court’s pre-trial order restricting counsel on an evidentiary point that went to the issue of the entire case was itself error.
Concerning the second issue, the defense of the statute of frauds, we find no error. It must be noted that the respondent was hired by the appellant almost immediately after the contract was given the appellant and by Hedreen’s own admission the original contract was for 360 days. The fact that appellant’s contract was amended later does not affect respondent’s rights. Too, one reason for the extension was that the wall had to be rebuilt which most certainly was not contemplated in the original contract. See Awberry v. Schmidt, 65 Mont. 265, 211 P. 346; Miles v. Miles, 76 Mont. 375, 380, 247 P. 328; 49 Am.Jur. Sec. 51, p. 409.
Also, the respondent’s part performance of the contract removes the case from the statute of frauds defense. Cobban v. Hecklen, 27 Mont. 245, 70 P. 805; Kettlekamp v. Watkins, 70 Mont. 391, 225 P. 1003; 49 Am.Jur. Sec. 421, pp. 725-726.
The appellant takes issue over the admission of evidence of statements made by the appellant’s president relative to hiding and burying the rebar steel. We find no error, for this admission against interest goes to the very heart of the matter. Here we have an experienced construction man hired for a supervisory spot in the appellant’s construction firm who was fired early in the job history and just after bringing to the attention of a government inspector the failure of the appellant to prop erly reinforce its concrete with steel. None was given here that satisfied either the statutory requirements — or the jury.
Concerning the appellant’s fourth issue — the admission of an unsigned, unauthenticated, incomplete listing on a sheet of paper and contending that it had to do with the appellant’s hiring practices was error. Appellant properly objected to its admission, however, we do find such admission was harmless error for it neither proved or disproved any issue in the cause.
We find too that the court erred in not allowing the appellant to use the original complaint to cross-examine the respondent on certain admissions of the respondent. The trial court took the position that because of the pre-trial order the allegations of the complaint had been superseded and the complaint was no longer relevant. Clearly it was in error for it has been this Court’s position since Johnson v. Butte & Superior Copper Co., 41 Mont. 158, 165, 166, 108 P. 1057, 48 L.R.A.,N.S., 938 (1910) that the opposite party is entitled to introduce into evidence inconsistent pleadings relating to the same issue for whatever the jury might find it worth in arriving at the truth of the controversy. Such too is the statute law of this state, section 93-401-27, R.C.M.1947. See also 31A C.J.S. Evidence § 304, pp. 783-788; IV Wigmore on Evidence, Third Edition, Sec. 1064, p. 45; Ratcher v. Heidenwirth, 254 Iowa 454, 118 N.W. 2d 52, 6 A.L.R.3d 1293. The appellant alleges that because the allegations of the complaint were inconsistent with the testimony given at the trial as to the employment contract he was prejudicially damaged. We find the error was harmless for during the careful- detailed cross-examination of the respondent the appellant accomplished what he intended with the submission of the complaint. The jury had an opportunity to weigh the respondent’s testimony and though some of his answers were inconsistent the jury in weighing all the evidence found the balance of the scales was in the respondent’s favor.
Issues 6, 7 and 8 concern the appellant’s objections to instructions given by the court and the court’s failure to give certain of appellant’s instructions. The case is not a model to be followed as far as the instructions to the jury are concerned. Many of the appellant’s proposed instructions would have served the jurors well when they considered the case, however, instructions must be considered in their entirety, and to determine whether instructions were properly given or refused this Court will read them in connection with other instructions given and consider them in the light of the evidence introduced. Kappes v. Jaap, 141 Mont. 471, 378 P.2d 665; Gilligan v. City of Butte, 118 Mont. 350, 166 P2d 797. Here the instructions, when considered as a whole, fairly presented the respondent’s case to the jury.
We find no merit to appellant’s position on the insufficiency of the evidence. Where the evidence presents a conflict as to the ground for the discharge of an employee or is. susceptible of more than one interpretation with respect thereto, the rightfulness of the discharge is a jury question. Here the jury found for the respondent and the trial court quite properly denied appellant’s motion for a directed verdict, for judgment notwithstanding the verdict and for a new trial.
The judgment of the court is affirmed.
We concur.
MR. CHIEF JUSTICE JAMES T. HARRISON and MB. JUSTICES HASWELL and BONNER, concur.
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MEMO OPINION
PER CURIAM:
This is an original proceeding to obtain a writ of review to'set aside a previous conviction and to decrease a sentence received ;upon. a subsequent conviction under section .94-4713, R.C.M.1947.
■Petitioner, Clyde Kent Lewis, is an inmate at the Montana State Prison. On June 3, 1965, in Cascade County, Great Falls, Montana, petitioner was convicted of the crime of uttering and- delivering a fraudulent check together with a prior felony conviction and was sentenced to 10 years at hard labor in the state prison. The prior felony conviction was received for the crime of obtaining money and property by false pretenses in Fergus County, Lewistown, Montana, on October 27, 1959.
On July 1, 1969, petitioner filed a petition for Writ of Review in the district court of Cascade County which was denied by that court. On July 22, 1969, petitioner, by counsel, appeared before this Court ex parte seeking an appropriate writ. On that day this Court issued a show cause order to the attorney general and the warden of the state prison to appear on August 6, 1969, to show cause why relief requested by the petitioner should not be granted. On August 6, 1969, petitioner, by counsel, and the attorney general appeared and oral argument was heard by this Court.
Petitioner’s primary contention is that his constitutional rights to due process were violated in the earlier felony conviction in Fergus County and therefore he should not have been charged with a prior felony conviction, activating the Montana recidivist statute. Under section 94-2702, R.C.M.1947, the maximum. sentence is 5 years in prison for the crime of uttering a fraudulent check. However, under section 94-4713, R.C.M.1947, the maximum sentence is 10 years where there has been a prior felony conviction.
. Petitioner’s complaint is based upon his arraignment in Fergus County in 1959 on the prior felony. He asserts, and the minute records of the district court agree, he was not told that if he could not afford counsel then the State would pro vide him with one. The minute entry merely states: “The court informed the defendant of his statutory rights as to counsel, and the defendant waives an attorney.”
The question then becomes whether the court récord must affirmatively • show that a defendant in an arraignment proceedings must be informed not only that he has the right to counsel, but also that the court will furnish one if he cannot afford counsel.
This Court has followed as controlling precedent' the' rulings of the United States Supreme Court concerning the procedural rights guaranteed to an accused in a criminal prosecution. See Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799; Powell v. Alabama, 287 U.S. 45, 53 S.Ct. 55, 77 L.Ed. 158; Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70.
We discussed the same question posed here in State ex rel. Biebinger v. Ellsworth, 147 Mont. 512, 518, 415 P.2d 728, 731. In that case we held:
“It is the duty of the district court to inform the defendant not only that he has a right to counsel, but that if he is without means to employ counsel that counsel would be provided for him by the State without cost to him.”
Also, in the Biebinger case we quoted with approval from the Cochran case, supra, which in effect said the record must affirmatively show that the accused, at an arraignment, was informed not only of his right to counsel but also that the court would appoint one for him if he could not afford one.
From the foregoing it is evident the Fergus County district court record does not affirmatively show that petitioner was informed of his rights and that he knowingly waived them. Therefore the conviction from Fergus County is set aside as null and void. ' '
This then raises a second question. If a prior felony conviction is null and void, does a subsequent conviction'and 'enhanced sentence under the Montana recidivist statute become null and void?
The subsequent conviction here involved was received by the petitioner in Great Falls, Montana; petitioner does not now contend that procedural safeguards were not followed in that proceeding but rather he contends that the prior felony shouhl not have been applied which enhanced -his - sentence.- - ■
Petitioner relies on several United States Supreme Court decisions in his argument. However, for the sake of brevity this Court need only cite one decision—Burgett v. Texas, 389 U.S. 109, 88 S.Ct. 258, 19 L.Ed.2d 319, in which that court said:
“In this ease the certified records of the Tennessee' conviction on their face raise , a presumption that petitioner was denied'his right to counsel in the Tennessee proceeding, and therefore that his conviction was void. Presuming waiver of counsel from a silent record is impermissible. Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70. To permit a conviction obtained in violation of Gideon v. AVain wright to be used against a person either to support guilt or enhance punishment-for another offense (see Greer v. Beto, 384 U.S. 269, 86 S.Ct. 1477, 16 L.Ed.2d 526) is to erode the principle of that case.” (Emphasis supplied).
This; Court can only conclude from the-record that the Fergus County conviction was obtained in violation of the Gideon, v. Wainwright case; therefore the enhanced sentence; of 5 years -received in Cascade County under section 94-4713, R.C.M.1947; is null and; void and must be set aside.- However, the conviction.for uttering and delivering a fraudulent cheek under section 94-2702, R.C.M.1947, and sentence of 5 years will stand affirmed.
|
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On June 2, 1993, the Defendant was sentenced to two (2) years for Felony Escape. The sentence shall be served consecutively to the term of imprisonment currently being served by the defendant.
On September 24,1993, the Defendant’s application for review of that sentence was ready to be heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was notified by prison staff that this hearing was scheduled, however, the defendant declined to appear before the Board. The Montana Defender Project asked a student to explain to the defendant that he had to either appear before the Sentence Review Board or sign a waiver of his appearance. The defendant refused to do either. Upon being advised of this, the Sentence Review Board dismissed the Petition with prejudice.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
|
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MR. JUSTICE SHEA
delivered the opinion of the Court.
Paul McCann, the personal representative of the estate of William Magelssen, deceased, appeals from an order of the Yellowstone County District Court determining attorney fees owed to the law firm of Hutton, Sheehy and Cromley.
This case arose when Paul McCann petitioned the District Court, pursuant to section 91A-3-722, R.C.M.I947, now section 72-3-634 MCA, for review of compensation owed to the attorneys for the estate, Hutton, Sheehy and Cromley. The District Court determined that the ordinary services of probate were 95 percent completed at date of discharge, and that, according to a contract of employment between Paul McCann and John C. Sheehy, the law firm agreed to handle the ordinary services to the estate for a fee of 3 percent of the estate valuation for federal estate tax purposes. Accordingly, the District Court held that the law firm was entitled to 95 percent of 3 percent of the estate value for federal estate tax purposes. Paul McCann appeals from this determination.
The facts giving rise to this controversy are as follows. William Magelssen died on September 17, 1976, leaving an estate valued in excess of three and one-half million dollars. His will named Julia Magelssen, his sister, and Paul McCann as co-personal representatives.
The co-personal representatives engaged John C. Sheehy and his firm, Hutton, Sheehy and Cromley, to provide legal services for them as co-personal representatives of the estate. Later, on October 11, 1976, the co-personal representatives had a meeting in which the attorney fees were discussed, and as a result of this meeting, attorney Sheehy wrote a letter confirming the conversation and the agreed upon fee. The letter, dated October 13, 1976, read in pertinent part:
“Also discussed was our attorneys’ fee in connection with the handling of the estate. Paul reported that some heirs wanted to hold down the cost of administration, particularly the attorneys’ fees. Paul also stated he could see a possible ‘conflict of interest’ when the valuation of the estate for inheritance taxes occurs. Nonetheless I stated that our firm would charge the full 3 % of the value of the estate for federal estate tax purposes for the ordinary services to the estate.”
There being no response to this letter, the law firm continued representing the estate with the understanding that the letter stated the agreed upon fee.
Eight months later, on June 17, 1977, McCann signed the federal estate tax return on which was recorded an amount for attorney fees, computed at 3 percent of the value of the estate appraised for federal estate tax purposes.
Julia Magelssen, one of the co-personal representatives, died on June 16, 1977, leaving Paul McCann as the sole personal representative. John C. Sheehy and his law firm continued to represent the estate of William Magelssen until July 27, 1977, when Sheehy and his law firm were discharged by McCann because of personal differences existing between McCann and attorney Sheehy. After the discharge, Paul McCann petitioned the court pursuant to section 91A-3-722, R.C.M. 1947, now section 72-3-634 MCA, to review the attorney fees charged by Sheehy and his law firm. Pursuant to this petition the court held an evidentiary hearing.
At trial, attorney Sheehy and his partner, George Hutton, testified on the work already performed for the estate and that which remained to be done. Attorney Hutton testified that, in his opinion, very little work remained to be done. Attorney Bjarne Johnson, who testified on behalf of the personal representative, stated that there was a significant amount of work yet to be completed. Needless to say, there was significant disagreement between Sheehy and Hutton on the one hand and Bjarne Johnson on the other hand, as to what constituted ordinary services and the complexity of the work entailed.
During the course of the hearing Paul McCann moved to require attorney Sheehy to testify as to the precise number of hours that his .firm had worked on the estate of William Magelssen, but the court refused to admit this evidence and also refused to admit evidence on the number of hours needed to complete the estate. The District Court took judicial notice of the documents prepared and already filed as part of the estate proceedings and of other activities engaged in by the attorneys on behalf of the estate.
The court ruled that a contract for compensation was contained in the October 13, 1976 letter from Sheehy to McCann, and that this contract was later ratified by McCann in signing the estate tax return which specified the same fee to be paid. The contract was for ordinary services at a fee of 3 percent of the estate value as set for federal estate tax purposes. The court determined that the ordinary legal services for the estate were 95 percent completed, and set the fee on that basis. The fee was computed to be $ 106,464.42. The court order also provided for adjustment of this fee in the event the federal taxing authorities revised their valuation of the estate.
The personal representative makes several assignments of error. He contends first that a valid contract for attorney fees did not exist between the personal representatives and the law firm, and therefore the proper measure of compensation should be based on quan turn meruit. Secondly, he contends that the District Court did not apply the appropriate standard of review under section 91A-3-722, R.C.M. 1947, now section 72-3-634 MCA. Third, he contends that the evidence was not sufficient to sustain the judgment of the District Court.
The personal representative first attacks the alleged contract between him and the attorneys on the theory that a contract for fees entered into after the inception of the attorney-client relationship is void. The prevailing rule is that attorney fee contracts made after the establishment of the fiduciary attorney-client relationship are valid if they are “fair and equitable.” See Annot., 13 A.L.R.3d 701, 710. Fairness is determined by taking account of such relevant factors as good faith and full-disclosure in the execution of the contract, the amount of the fee and the client’s maturity, intelligence, and understanding of the transaction. Annot., 13 A.L.R.3d 701, 711; Daniels v. Paddock (1965), 145 Mont. 207, 222, 399 P.2d 740, 747; Coleman v. Sisson (1924), 71 Mont. 435, 443, 230 P. 582, 584. The burden of establishing fairness is on the attorney. Daniels v. Paddock, supra; 7 Am.Jur.2d Attorneys at Law, § 267.
The record contains substantial evidence in support of the fairness of the agreed fee. The terms of the attorney’s employment were made unequivocally clear in the October 13, 1976 letter. The personal representatives acknowledged receipt of the letter and, at trial, personal representative McCann testified that he understood the meaning of the letter. The representatives did not object to the specified fee arrangement for at least seven more months, during which time the attorneys continued to perform legal services for the estate. Moreover, at a later time, personal representative McCann signed the federal estate tax return on which the 3 percent fee was clearly stated. Nor does the evidence indicate that McCann was inexperienced in the ways of the world.
Personal representative McCann was an extraordinarily well-educated and experienced man. He testified that he is the officer of a major corporation, a certified public accountant and is licensed to practice law in two states, Illinois and North Dakota. He entered into the contract with his eyes open and with full awareness of the implications. We agreed with the conclusion of the District Court that he ratified the fee agreement. Section 13-325, R.C.M.1947, now section 28-2-503(2) MCA; Annot., 13 A.L.R.3d 701, 745.
Next, the personal representative argues that section 91A-3-722, R.C.M.1947, now section 72-3-634 MCA, which provides for judicial review of attorney fees, imparts an “overriding consideration of reasonableness” that effectively invalidates the terms of any contract for probate-related services. This section provides:
“Proceedings for review of employment of agents and compensation of personal representatives and employees of estate — court to set disputed fee. Upon the filing of a motion for settlement of fees by the court filed by an interested person, the personal representative or the person employed by the personal representative and after notice to all interested persons, the propriety of employment of any person by a personal representative including any attorney, auditor, investment advisor or other specialized agent or assistant, the reasonableness of the compensation of any person so employed, or the reasonableness of the compensation determined by the personal representative for his own services, shall be reviewed and determined by the court. In any dispute concerning fees, the court shall set the fee. Any person who has received excessive compensation from an estate for services rendered may be ordered to make appropriate refunds.”
The provision does not restrict the personal representative’s capacity or freedom to contract, except that he may not contract for excessive fees. Nor can this section be read in isolation from other provisions of the probate code. Section 91A-3-713(21), R.C.M.1947, now section 72-3-613(21) MCA, specifically authorizes the personal representative to employ, and therefore to contract for, the services of an attorney. Section 91A-3-720, R.C.M.1947, now section 72-3-633 MCA, entitled “Compensation of Attorney” merely places a ceiling on the amount of compensa tion payable to an attorney for ordinary services. These provisions establish the boundaries of the personal representative’s authority to contract for the services of an attorney. The fee involved in the instant case fits within these limits. Accordingly, the fee contract was valid under the applicable provisions of the Montana Uniform Probate Code.
Personal representative McCann next argues that attorney fees based on a fixed percentage of the estate value are against public policy because the attorney will inflate the value of the estate in order to increase his fee. This Court’s duty is to construe the law as it is written. Section 93-401-15, R.C.M.1947, now section 1-2-101 MCA. If no ambiguity exists in a statute, the letter of the law will not be disregarded under the pretext of pursuing its spirit. Vaughn & Ragsdale v. State Board of Equalization (1939), 109 Mont. 52, 60, 96 P.2d 420, 424. The statutory provision governing compensation of attorneys in estate matters is section 91A-3-702, R.C.M.1947, now section 72-3-633 MCA. In pertinent part it states that “if the services of an attorney are engaged by the personal representative, the compensation of such attorney shall not exceed one and one half (U/2) times the compensation allowable to the personal representative.” The personal representative is allowed a “reasonable compensation” not to exceed 3 percent of the first $40,000 of the reported estate value and 2 percent of the value over $40,000. Section 91A-3-719, R.C.M.1947, now section 72-3-631 MCA. We find no public policy in these applicable statutes that would invalidate a fee clearly coming within their terms.
We next discuss the question of whether the District Court’s review of the attorney fees pursuant to section 91A-3-722 was proper. The personal representative contends that by invocation of this statute the District Court is required to fix a reasonable attorney’s fee without reference to the terms of an existing contract. But we see no reason to totally ignore the terms of a contract between an attorney and the personal representative.
The following editorial comment appears under section 91A-3-722:
“In view of the broad jurisdiction conferred on the probate court by section [91A-3-105], description of the special proceeding authorized by this section might be unnecessary. But, the code’s theory that personal representatives may fix their own fees and those of estate attorneys marks an important departure from much existing practice under which fees are determined by the court in the first instance. Hence, it seemed wise to emphasize that any interested person can get judicial review of fees if he desires it. Also, if excessive fees have been paid, this section provides a quick and efficient remedy.”
This comment focuses our attention on the provision’s principal utility. It provides interested persons with judicial review to guard against excessive fees set by a personal representative in the exercise of his newly conferred discretion. It is a special, formal proceeding in which interested persons obtain a quick and effective remedy against excessive compensation. Upon the filing of a petition under section 91A-3-722, the District Court must determine if the compensation paid is excessive in light of all the circumstances. In so doing, the pourt is not setting the fee, it is reviewing the fee arrangement. Naturally, the factors bearing on reasonableness of court-awarded attorney fees must be taken into account in determining if a particular fee is either excessive or reasonable. But under the probate code, it is the personal representative, not the court, who sets the fee in the first instance.
In explaining the national provision, Uniform Probate Code section 3-721, which is virtually identical to section 91A-3-722, the Uniform Probate Code Practice Manual states:
“The Code’s transfer of these matters to the personal representative in the first instance, with provision for review in the case of dispute should tend to promote prior agreement between those interested in estates, on the one hand, and those assisting in administrations, on the other. If more fee agreements result, disputes and complaints about fees will be fewer, whether the amounts involved remain the same, or are increased or decreased.” Wellman, Uniform, Probate Code Practice Manual, 2d Ed., Vol I, p. 322.
It is clear that a court, when reviewing a fee agreement under a substantially performed contract, cannot blind itself to the terms of the contract and make its own determination of what is reasonable.
In the present case, the District Court determined that section 91A-3-713(21) (which empowers the personal representative to employ an attorney) and section 91 A-3-722 (which allows the court to review the employment of attorneys and their fees), must be construed together so as to give effect to each provision and make them compatible with each other. Applying this standard, the District Court found the amount of the fee to be reasonable on its face as it was within the limits of compensation provided for in sections 91A-3-719, R.C.M.1947, now section 72-3-631 MCA, and section 91A-3-720, R.C.M.1947, now section 72-3-633 MCA. After determining that the services were substantially performed, the court concluded that its task was to apportion the agreed compensation according to the percentage of ordinary services completed by the attorneys as of the date of their discharge.
On the other hand, the personal representative contends that once an attorney is discharged, he can only be compensated on the basis of quantum meruit, whereby recovery is limited exclusively to the reasonable value of services rendered on an hourly basis. Again, he would have the court totally disregard the substantially performed contract between the personal representative and attorney. We note moreover that section 91 A-3-722 sets forth no such measure of compensation.
As indicated previously, the personal representative can contract for an attorney’s services (section 91A-3-713(21)) and under section 91A-3-808, R.C.M.1947, now section 72-3-612 MCA, the estate is bound by such contracts. Though the fee contract is open to review under section 91A-3-722, R.C.M.1947, now section 72-3-634 MCA, the amount of the fee is not automatically converted into a quantum meruit measure of compensation. Indeed, quantum meruit compensation is normally appropriate only where a valid contract does not exist. 7 Am.Jur.2d Attorneys at Law, § 232; Harris v. Root (1903), 28 Mont. 159, 72 P. 429.
We emphasize that this is not a case of attorney fees assessed against an opposing party and awarded by the court pursuant to a statute. In such case, the court determines the reasonableness of the fee in the first instance, and this Court disapproves reliance on contingency fee contracts in setting the fee. See e. g., State Department of Highways v. Schumacher (1979), 180 Mont. 329, 590 P.2d 1110; State Highway Commission v. Marsh (1978), 175 Mont. 460, 575 P.2d 38, 43. In this case, however, the personal representative requested judicial review and determination of compensation due under a valid, substantially performed contract for services. Under these circumstances the court must act as both finder of fact and as arbiter between contractually bound parties. We do not believe that section 91A-3-722 was intended to permit competent, fully informed personal representatives to disavow their otherwise enforceable contracts for an attorney’s services.
Considering the principal purpose of section 91A-3-722 and the exceptional circumstances surrounding its invocation in this case, the District Court did not err in refusing quantum meruit as the measure of compensation. The court’s threshold determination of reasonableness, followed by an apportionment of the agreed fee to the percentage of the job completed, was proper.
Based on these factors, we see no error in the exclusion of evidence as to the attorney’s actual time expended in probate. We note in this regard that the time factor has, generally speaking, played a relatively minor role in determination by a court of reasonable attorney fees in probate. See Annot., 58 A.L.R.3d 317, 325; 7 Am.Jur.2d Attorneys at Law, § 238; In re Estate of Wood (1977), 55 Ohio App.2d 67, 379 N.E.2d 256, 261. In this case, the District Court was fully advised as to the work completed in relation to the work that remained to be done. Although we consider time actually spent on probate services to be relevant to a determination of reasonableness, we do not find its exclusion under the facts of this case to be reversible error.
Nor do we find reversible error in the District Court’s provi sion allowing an adjustment of the attorney fees in the event the estate value is later revised upward or downward by the federal taxing authorities. The agreed upon consideration for the attorney’s services was 3 percent of the estate value for federal estate tax purposes. Fixing the fee in proportion to that value was consistent with the intent of the contracting parties.
The last issue raised by the personal representative is that the evidence did not support a finding that the contract was 95 percent completed at the time of the attorney’s discharge. He contends there is substantial work that remains to be done. We note that the attorney contracted to perform the “ordinary services” for the estate. The evidence at trial was conflicting as to whether the work remaining to be done was of an “ordinary” or “extraordinary” nature. It was the court’s factual determination which finally settled on the finding of 95 percent completion. We will not substitute our judgment for that of the trial court where there was substantial evidence to support a finding of fact. Kosmerl v. Barbour (1979), 180 Mont. 208, 589 P.2d 1017, 1019, 212-13; Gross v. Holzworth (1968), 151 Mont. 179, 185, 440 P.2d 765, 768. The District court heard testimony from both sides and was not without its own knowledge on estate matters in general and this estate in particular.
The judgment of the District Court is affirmed.
MR. CHIEF JUSTICE HASWELL, JUSTICE DALY and JUSTICE HARRISON and JOEL G. ROTH, District Judge, sitting for Mr. Justice Sheehy, concur.
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Defendant appeals from his conviction of criminal possession of dangerous drugs with intent to sell in violation of section 45-9-103, MCA. We reverse.
The facts of this case are uncontroverted. Robert and Mae Westfall were the managers of Shurgard Mini Storage in Billings, Montana, a collection of storage units which are rented out to customers. In January 1981, the Westfalls rented a unit to defendant who identified himself as “Bill Hayes.”
On July 31, 1981, at closing time, defendant arrived at Shurgard and was given permission to go to his unit. Because Mae Westfall had earlier instructed another customer (Bender) to lock the gate when he left, Mae Westfall went to inform Bender of defendant’s presence. After doing so, she noticed the door to defendant’s unit was shut and wondered what he was doing, since there were no interior lights in defendant’s unit. Mrs. Westfall also wanted to know how much longer defendant was going to be on the premises.
Mrs. Westfall walked to the door of defendant’s unit, knocked and said, “Hey, you in there.” There was no response so she repeated the procedure with no result. She then opened the door and saw defendant sitting on the floor, pointing a gun at her. She also saw two suitcases on the floor behind him but was unable to describe them because of the dimness of the room’s interior. She then yelled for Bender, who tried to wrestle the gun from defendant. Mrs. Westfall left to inform her husband who in turn called the police. The police arrived after defendant had left but the Westfalls informed them that they did not wish to press any charges at that time.
Pursuant to company policy, Mrs. Westfall called the Washington home office on the next working day and related the events to them. Personnel at the home office suggested the Westfalls find out what was in the suitcase. Mr. Westfall removed the hinge pins from the padlocked door and entered defendant’s unit. He opened one of the suit cases and saw a number of bottles of pills. He also opened a purse lying on the floor which he found to contain silverware. After closing the suitcase, purse and replacing the door, Mr. Westfall called the police indicating that they now wished to press assault charges.
Based on the information provided by the Westfalls, the Billings police obtained a search warrant and seized the suitcase and purse. The contents of the suitcases and purse were inventoried, revealing well over 100 bottles of pills and on August 8, 1981, defendant was charged with criminal possession of dangerous drugs with intent to sell. Defendant pleaded not guilty and filed a motion to suppress. The court denied the motion and, after a nonjury trial, sentenced the defendant to fifteen years in the Montana State Prison and designated him a dangerous offender. Defendant appeals.
Defendant raises two issues on appeal which can be stated as follows:
1. Whether the District Court erred in failing to suppress the evidence.
2. Whether the District Court erred in adopting the State’s proposed findings of fact and conclusions of law.
With regard to the first issue appellant argues that Montana’s position on “citizen searches” mandates a reversal, citing State v. Hyem (1981), Mont., 630 P.2d 202, 38 St.Rep. 891; State v. Helfrich (1979), Mont., 600 P.2d 816, 36 St.Rep. 1763; State v. Coburn (1974), 165 Mont. 488, 530 P.2d 442; and State v. Brecht (1971), 157 Mont. 264, 485 P.2d 47. These cases all stand for the proposition that evidence obtained by a private citizen in violation of another’s constitutional rights is subject to the exclusionary rule and may not be admitted into evidence in a criminal trial in this state. The fact that Montana’s constitution explicitly guarantees an individual’s right to privacy was a major factor of the Hyem and Helfrich decisions:
“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 compelling state interest. 1972 Montana Constitution, Article II, Section 10.”
The State concedes that, if we follow Hyem and its predecessors, the defendant’s conviction must be reversed but argues that we should reverse those cases and allow evidence illegally obtained by private citizens to be admitted in a criminal trial. The State further agrees that the exclusionary rule deterrence rationale (to deter police from violating other’s constitutional rights by excluding the evidence) has no application to private citizens because they do not realize the evidence is suppressible.
We decline to overrule our previous citizen search cases and reaffirm our position taken therein. We base our reasoning on the firm stance taken by the Montana Constitution guaranteeing an individual’s right of privacy. Our holding today is also rooted in the concept of judicial integrity, i.e., the judicial system must not become an accomplice to constitutional violations by admitting evidence illegally obtained.
It is clear from the seminal cases involving the exclusionary rule that judicial integrity was one of the main reasons for the exclusion of illegally obtained evidence. In Weeks v. United States (1914), 232 U.S. 383, 34 S.Ct. 341, 58 L.Ed. 652, the issue was whether evidence obtained unconstitutionally by government agents should have been admitted at trial. The Court found that it should not have been admitted and stated the following:
“To sanction such proceedings would be to affirm by judicial decision a manifest neglect if not an open defiance of the prohibitions of the Constitution, intended for the protection of the people against such unauthorized action.”, 232 U.S. at 394, 34 S.Ct. at 345, 58 L.Ed. at 656.
Later in Elkins v. United States (1960), 364 U.S. 206, 80 S.Ct. 1437, 4 L.Ed.2d 1669, the court outlawed the “silver platter doctrine” whereby evidence illegally obtained by state officers would be turned over to federal prosecutors in federal criminal trials. In so doing, the Court stated:
“But there is another consideration — the imperative of ju dicial integrity. It was of this that Mr. Justice Holmes and Mr. Justice Brandéis so eloquently spoke in Olmstead v. United States, 277 U.S. 438, at 469, 471 [48 S.Ct. 564, at 569, 570, 72 L.Ed. 944], more than 30 years ago. ‘For those who agree with me,’ said Mr. Justice Holmes, ‘no distinction can be taken between the Government as prosecutor and the Government as judge.’ 277 U.S. at 470 [48 S.Ct. at 575]. (Dissenting opinion.) ‘In a government of laws,’ said Mr. Justice Brandéis, ‘existence of the government will be imperilled if it fails to observe the law scrupulously. Our Government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the Government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; invites anarchy. To declare that in the administration of the criminal law the end justifies the means — to declare that the Government may commit crimes in order to secure the conviction of a private criminal — would be terrible retribution. Against that pernicious doctrine this Court should resolutely set its face.” 277 U.S. at 485 [48 S.Ct. at 575]. (Dissenting opinion.) 364 U.S. at 222, 223, 80 S.Ct. at 1447, 4 L.Ed.2d at 1680 — 81.
We said in Coburn, supra, in commenting on the above quote:
“[Unreasonable or illegal intrusions knowingly accepted and used, from the private sector by the government amount to an extension of the silver platter doctrine condemned by Elkins, particularly, when viewed in the light of judicial integrity emphasized in Elkins.” (Emphasis in original.) 165 Mont, at 503, 530 P.2d at 450.
The next landmark case in the development of the exclusionary rule was Mapp v. Ohio (1961), 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081, which made the exclusionary rule binding in both state and federal cases. The concept of the judiciary remaining free from the taint of illegally seized evidence played a large part in the decision as revealed by the Court’s concluding statement:
“Our decision, founded on reason and truth, gives to the individual no more than that which the Constitution guarantees him, to the police officer no less than that to which honest law enforcement is entitled, and, to the courts, the judicial integrity so necessary in the true administration of justice.” 367 U.S. at 660, 81 S.Ct. at 1694, 6 L.Ed.2d at 1093^
See Terry v. Ohio (1968), 392 U.S. 1, 13, 88 S.Ct. 1868, 1875, 20 L.Ed.2d 889, 901 (“A ruling admitting evidence in a criminal trial, we recognize, has the necessary effect of legitimizing the conduct which produced the evidence, while an application of the exclusionary rule withholds the constitutional imprimatur”).
McCormick on Evidence has this to say in the concluding paragraph in the section on evidence obtained by private individuals:
“On balance, the factors seem to favor the imposition of the exclusionary rule. Although the situation is distinguishable from that in Mapp, the distinction is not of sufficient breadth to justify a drastic difference in the treatment of the resulting evidence. While the need to protect personal security from private as well as public invasion is certainly an important factor, the controlling matter is the unfairness of the use of the evidence and the degrading of the judicial system that must necessarily accompany that use.” (Emphasis added.) McCormick on Evidence §168, at 374.
Here there were two methods used in unlawfully gaining access to defendant’s rental unit. Mr. Westfall removed the hinge pins on the door for the first entry and cut defendant’s padlock off the door for the second. It is hard to imagine more blatant violations.
It is uncontroverted here that the Westfalls had no idea that they would find any drugs in the suitcases. When Mrs. Westfall first knocked on and opened the door, the light was so dim that she could not describe the suitcases behind the defendant. Defendant’s unit had no interior light and no windows and one needed to crawl in or out to enter or exit it. We note that defendant has already been convicted and sentenced on the assault charge for pointing the gun at Mrs. Westfall.
To sanction the admission of the evidence gained in this unlawful manner by allowing its presentation in a criminal trial makes the courts of this state a party to violations of the constitutional rights of the defendant and runs afoul of any viable notion of judicial integrity as outlined in Coburn, supra.
It is also undisputed in the case at bar that the defendant’s right to privacy was violated. Defendant is guaranteed this right under Art. II, §10 of our state constitution, supra. Of the ten states expressly protecting privacy in their constitutions, only two (Alaska and Montana) have privacy guarantees that stand alone in a separate section of the state constitution, A Right of Privacy as a Matter of State Constitutional Law (1977), 5 Fla.St.L.Rev. 631, 690-701. Although the Alaska courts apparently have interpreted their constitution to require state action to trigger the exclusionary rule, Allred v. State (Alaska (1976), 554 P.2d 411, 416, we believe the better approach is that followed in Brecht and its progeny, supra. Montana’s privacy right is the most elegant and the most uncompromising of the various privacy statements. 5 Fla.St.L.Rev. at 738.
Respondent contends that we should adopt the good faith approach to the exclusionary rule approved by the Fifth Circuit in United States v. Williams (5th Cir. 1980), 622 F.2d 830. We are not persuaded by this argument. As discussed above, Montana’s constitutional guarantee of privacy is expressed in the strongest terms of any state constitution in the country and we are not bound by federal interpretations from other circuits.
Statistics show that most motions to suppress are concentrated in offenses involving narcotics, weapons and gambling (with one-half filed in crimes involving narcotics and weapons), persuasive evidence that the application of the exclusionary rule is concentrated in these few areas, Studying the Exclusionary Rule in Search and Seizure (1970), 37 Univ. of Chicago L.Rev. 665, 706.
These circumstances usually arouse little if any public support or sympathy for the defendant whose rights are violated. However, in a different context, the question of the admission of illegally obtained evidence is less volatile. For example, say an employee of a bank breaks into another’s safety deposit box and discovers a stolen watch, a clear constitutional violation. Are the rights of pusher or murderer any less than the watch thief’s simply because our society today views the latter crime as innocuous and less heinous? Our Constitution was not grounded on such shifting sand.
To admit at a criminal trial evidence illegally obtained by private citizens is to encourage a vigilante movement which has no redeeming social value in our society today. Moreover, many prosecutors in this state would refuse to base a charge or information on such evidence but there are some who persist in doing so.
The State argues that by not allowing the fruits of an unlawful citizen’s search into evidence, many would-be criminals are allowed to go free. However, two recent studies indicate that the exclusionary rule has a negligible effect in freeing defendants. One study surveyed nearly 3,000 cases in 38 United States Attorney’s offices between July 1 and August 31, 1978. Only 1.3 percent had evidence suppressed because of Fourth Amendment violations and more than half of the defendants who successfully moved to suppress were convicted anyway, Comptroller General of the United States, The Impact of the Exclusionary Rule in Federal Criminal Prosecutions, rep. no. 66D-79-45 (April 19, 1979). Another study found that less than one percent of all arrests were eliminated for no follow-up prosecution because of due process violations such as illegal searches and seizures, Frost Lucianovich & Cox, What Happens After Arrest? (Wash.D.C.Art. for Law and Social Research, August 1977).
National figures show that only 2 percent of the total number of persons held for prosecution were charged with weapons or narcotics offenses, the crimes where the exclusionary rule is applied most often, 37 Univ. of Chicago, L.Rev. at 681. In view of these facts, the State’s argument that many criminals are set free because of suppression of illegally-seized evidence due to the exclusionary rule loses much of its force. Also, statistics covering twelve years of law enforcement activity in Cincinnati, Ohio, show that the adoption of the exclusionary rule had no apparent effect on arrests or convictions in narcotics, weapons and gambling offenses, 37 Univ. of Chicago L.Rev. at 707.
Appellant argues that no probable cause existed to support the issuance of the search warrant in this case and it follows from what we have said above that we agree. The warrant was based on evidence illegally obtained by Mr. Westfall and the warrant was tainted thereby. See United States v. Crews (1980), 445 U.S. 463, 100 S.Ct. 1244, 63 L.Ed.2d 537.
Appellant’s second issue relates to whether the District court erred in adopting the State’s proposed findings of fact and conclusions of law. Appellant argues that this action violates the rule of law set forth in Tomaskie v. Tomaskie (1981), Mont., 625 P.2d 536, 38 St.Rep. 416. The State concedes its proposed findings and conclusions were accepted by the District Court with only minor changes.
We note that subsequent to the Tomaskie case, this Court decided Jensen v. Jensen (1981), Mont., 631 P.2d 700, 38 St. Rep. 1109, wherein we stated that such an adoption is not grounds for reversal if the findings and conclusions are sufficiently comprehensive and supported by the evidence. It is clear from what was said above that the District Court’s decision is not supported by the evidence or the law and thus fails to comport with this standard.
Reversed.
MR. JUSTICE SHEA concurs.
MR. JUSTICE DALY, who was unable to attend the oral argument, did not participate in this decision.
|
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On June 22,1992, the Defendant was sentenced to fifteen (15) years for Incest with ten (10) years suspended upon the conditions listed in the June 22, 1992 Judgment. Credit will be given for 3 days time served.
On May 6,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and was represented by Patricia Day-Moore, Legal Intern from the Montana Defender Project. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, the sentence be amended to fifteen (15) years straight time. The Defendant shall not be eligible for parole until he successfully completes the sex offender treatment program at the Montana State Prison. Credit shall be given for three (3) days time served.
The reason for the amendment is to insure that the Defendant would successfully complete the sex offender treatment program while in the Montana State Prison. It is a specific concern of this Board that the Defendant not be released into society until he has successfully completed the sex offender program.
Hon. Thomas McKittrick, Chairman, and Hon. John Warner, Judge
DISSENT. THE HONORABLE G. TODD BAUGH DISSENTS. He agrees with the fifteen (15) year sentence and the fact that the Defendant needs the sex offender program, however, Judge Baugh would make the treatment program available as part of the Defendant’s parole plan if he was -unable to get it done while incarcerated at the Montana State Prison prior to his parole.
The Sentence Review Board wishes to thank Patricia Day-Moore, Legal Intern from the Montana Defender Project for her assistance to the defendant and to this Court.
|
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Insurer, Argonaut Insurance Co., and claimant’s employer Morrison-Knudsen Co., Inc. appeal from the judgment of the Workers’ Compensation Court, on November 18, 1977, which affirmed the Division of Workers’ Compensation order that determined appellants’ interest in claimant’s third party recovery. Following the denial of appellant’s petition for rehearing, this appeal ensued.
On appeal, the parties have stipulated to an agreed statement of facts, which is:
On January 18, 1974, Irvin B. Tuttle, while commuting to work at the Sarpy Creek Mine, near Hardin, Montana, where he worked for the Morrison-Knudsen Company, from his home in Billings, Montana, was involved in an automobile accident. Tuttle was not driving. He was injured and claimed workers’ compensation benefits based on the fact that he was receiving travel pay and was in the course of his employment.
Argonaut Insurance Company, the insurer for Morrison-Knudsen, an employer enrolled under Plan No. 2 of the Workers’ Compensation Act, denied coverage.
Tuttle petitioned the Division for a determination of disability and an order awarding compensation was issued June 19, 1975.
Argonaut has paid compensation from January 18, 1974 to May, 1977 pursuant to the June 19, 1975 order.
Tuttle instituted a third-party action against the driver of the vehicle he was riding in when the accident, which caused his injury, occurred. Argonaut was not advised of the filing of this law suit. On May 4, 1977 Argonaut was advised of an offer of settlement in the amount of $147,500 in this law suit. On May 5, 1977 Tuttle accepted the offer of settlement.
Argonaut was advised of the acceptance of this offer on May 11-, 1977.
From the $147,500 received in settlement of the third-party action, the entire attorney fees in the amount of $47,500 and the entire costs in the amount of $2,427 were paid, $18,045.52 was retained in trust, and the balance of $79,527.48 was distributed to the claimant or for his benefit. No request was made upon Argonaut Insurance Company to contirbute to the attorney fees or costs in advance of the consummation of the settlement.
Argonaut and Morrison-Knudsen Company, Inc., petitioned the Division for an- order determining their subrogation interest in the May 4, 1977 award. The division issued an order determining subrogation interest on May 19, 1977.
Argonaut petitioned for reconsideration of the May 19, 1977 order. This petition was denied by the Division’s order denying insurer’s petition for reconsideration of order determining subrogation interest of June 1, 1977.
The insurer, Argonaut Insurance Company, and employer, Morrison-Knudsen Company, Inc. petitioned for appeal of the division’s order determining subrogation interest of May 19, 1977, and order denying insurer’s petition for reconsideration of order determining subrogation issued June 1, 1977, and from the whole thereof.
The Workers; Compensation Court held a hearing on the insurer’s appeal. On November 18, 1977, that court affirmed the division’s order. Insurer appeals from that judgment.
The sole issue before this Court is whether the Worker’s Compensation Division order that determined the insurer’s subrogation interest in claimant’s third party recovery, and which was affirmed by the Worker’s Compensation Court, is correct in light of the provisions of section 92-204.1, R.C.M.1947.
Section 92-204.1 establishes the insurer’s right to subrogation in third party recovery right to subrogation in third party recoveries by injured workmen. The statute under consideration was amended in 1977. The amendments simply cleaned up the language in the statute and divided it into two sections. They did not make any substantive change in the statute. In this case, we are concerned with the statute as it existed prior to the 1977 amendments.
This is a case of first impressions in Montana.
We have held that the Workers’ Compensation Act must be liberally construed in favor of claimant. Murphy v. Anaconda Co., (1958), 133 Mont. 198, 321 P.2d 1094; Marker v. Zeiler, (1961), 140 Mont. 44, 367 P.2d 311. Applying that standard of liberal construction to this statute, we believe that the order of the Worker’s Compensation Division must be affirmed.
In its order of May 1977, the Workers’ Compensation Division determined the insurer’s statutory subrogation interest pursuant to section 92-204.1 That section provides that the insurer is entitled to full subrogation for all compensation and benefits paid or to be paid. The insurer’s right of subrogation is a first lien on the third party recovery. However, the employees is guaranteed at least one-third of the recovery and the insurer is required to pay his proportionate share of the costs and attorney fees of the third party action. The section further provides that when the third party action is settled and the amount of benefits and compensation has not been ful ly determined, the Division of Worker’s Compensation shall determine what proportion of such settlement shall be allocated under subrogation.
In this case, claimant settled his third party action for $ 147,500. The action was settled prior to a full determination of his workmen’s compensation benefits. Due to that fact, the Division of Worker’s Compensation was requested to determine how much of the third party settlement should be allocated under subrogation. Their determination was as follows:
“The claimant shall pay to the workers’ compensation insurer the sum of $11,937.11, out of the amount recovered from the third party action, for the insurer’s portion of its subrogation interest for payments made to date. In addition, the workers’ compensation insurer may reduce its further obligations to the claimant to the extent that it shall continue to pay the claimant 33.85% of the future benefits it is obligated to pay the claimant under the Workers’ Compensation Act, until it has paid out an actual total amount of $33,287.50 ($98,338.25 x 33.85%), should such a total actual payout ever be reached. Once an actual total payout of $33,287.50 is made, should that ever occur, the insurer would again be liable for full benefit payments.”
Insurer objects to this allocation in two areas. First, he argues that they should receive the $18,045.52 they have paid to claimant. They claim that they are entitled to all of the compensation that has been paid, without deduction of their share of the attorney fees, because the statute says that they are entitled to full subrogation. Their second objection is to their being required to pay attorney fees on the $98,338.25, which is insurer’s maximum possible statutory entitlement. Under the Division order, this money is to be paid out to claimant. Insurer argues that they should not be obligated to pay any monies to claimant until all of the third party recovery is used up, then benefits will resume. We hold that the insurer’s objections are without merit.
This Court said:
“* * * [where] one litigant has borne the burden and expense of successful litigation which has created and brought into court a fund in which others share with him, it is only just and equitable that those who share in the benefits should contribute to the payment for the services of the attorney whose labors resulted in the creating or preserving of such common fund.” (Bracketed material added.) Hardware Mutual Casualty Co. v. Butler, (1944), 116 Mont. 73, 86, 87, 148 P.2d 563, 568.
Here, claimant through his third party action created a fund which reduced insurer’s obligation to pay compensation to him. Clearly, insurer benefited from claimant’s action. Without claimant’s action, insurer would not be reimbursed for the compensation they have paid. Thus, it is only fair and equitable that insurer’s share of the attorney fees and costs be subtracted from the amount they are to receive in reimbursement.
As for the insurer’s having to pay claimant 33.85 percent of future benefits it may be obligated to pay, we hold that this was a proper determination. Here, because of the third party recovery, insurer’s obligation to pay full weekly benefits has been eliminated. Insurer is then receiving a benefit from the size of claimant’s recovery. Since they are receiving this benefit, they should be obligated to pay theif fair share of the legal expenses that were incurred in obtaining the benefit. Under similar circumstances the Indiana court has said that the ultimate recovery of the employee should not be diluted by having to pay that portion of the attorney fees required to collect that which the injured employee is entitled to collect under a compensation award without any suit, or settlement. Indiana State Highway Commission v. White, (1973), 259 Ind. 690, 291 N.E.2d 550. This is the approach that the Division applied here. They determined that the insurer, rather than claimant, should have to pay the legal expenses of being relieved from having to pay compensation under the Workmen’s Compensation Act.
The interpretation that the Division and the Workers’ Compensation Court give to section 92-204.1 is consistent with the approach taken by other jurisdictions in interpreting their subrogation statutes. The subrogation statutes of the different states vary substantially in their wording, but the interpretations and results under them are similar.
“Under a considerable number of statutes, however, when the suit is brought or recovery effected by the employee, and sometimes in all cases, the carrier is obliged to pay a portion of the attorney’s fees out of his share, usually in proportion to his share of the recovery.” 2A Larson, Workmen’s Compensation Law, § 74.32.
Our interpretation of section 92-204.1 is in accord with the intent of the legislature in enacting the statute. Prior to 1973, the statute provided that the employee was to bear the costs and attorney fees of his third party action. In 1973, the legislature amended the statute to provide that the insurer must pay a proportionate share of the costs and attorney fees incurred in the action.
This Court has long followed the rule that when the legislature amends a statute, it intends to make a change in existing law and the courts will endeavor to give some effect to the amend ment. State ex rel Dick Irvin, Inc. v. Anderson, (1974), 164 Mont. 513, 525 P.2d 564; Montana Milk Control Board v. Community Creamery Co., (1961), 139 Mont. 523, 366 P.2d 151; Van Tighem v. Linnane, (1960), 136 Mont. 547, 349 P.2d 569. We hold that the allocation of the recovery, by the Division, was in accordance with the intent of the legislature to require the insurer to bear its fair share of the costs and fees, which, prior to 1973, they did not have to do.
We recognize that the purpose of the subrogation provisions of the Workmen’s Compensation Act is to compensate the employer and insurer to some extent for the additional liability they assume, under the Act, for wrongful acts of third party tortfeasors. Fisher v. Missoula White Pine Sash Company v. Michigan Mutual Liability Co., (1974), 164 Mont. 41, 518 P.2d 795. The Division’s order in this case did not violate this purpose. All that it did was to require the insurer to pay its fair share of the costs and attorney fees for the benefit claimant obtained for them.
Judgment affirmed.
MR. JUSTICES DALY, HARRISON, SHEA and SHEEHY concur.
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MR. JUSTICE BONNER
delivered the Opinion of the Court.
In a survivorship action by the administrator of the estate of a decedent killed in an automobile accident, the jury returned a verdict for the administrator in the amount of $445.95. Subsequently the district court of Flathead County, the Honorable Robert C. Sykes, district judge presiding, entered an order and judgment setting aside the verdict, holding defendant liable, and awarding the administrator a new trial limited to the sole issue of damages. From this order and judgment, defendant appeals.
The sole issue on this appeal is whether the district court abused its discretion in granting the administrator a new trial on the issue of damages.
The accident forming the basis of this suit occurred about 3:45 p.m. on March 16, 1967 on the interstate highway betwéen Billings and Laurel. The front end of án eástbound station wagon driven by defendant, William Pollei, struck the rear end of a preceding eastbound automobile in which Nancy Putman was a rear seat passenger. Nancy died within the hour from injuries received in this accident.
Subsequently. Nancy’s father, Robert Putman, .was appointed administrator of her estate and in such capacity filed the instant negligence action against defendant Pollei. Plaintiff administrator-seeks recovery on claims for which Nancy herself could have sued but for her death; and which, upon her death, survived in favor of the administrator of her estate under Montana’s general survival statute, section 93-2824, R.C.M.1947. Specifically, damages arc sought for (1) Nancy’s personal property and effects destroyed in the accident, and (2) her loss of earning capacity. Defendant’s answer is substantially a general denial.
.During the course of trial, the parties, stipulated that the value of Nancy’s personal property and effects destroyed in the accident was $445.95. Broadly speaking, plaintiff’s evidence on Nancy’s loss of earning capacity consisted of (1) expert opinion evidence of an economist from the University of Washington on Nancy’s potential loss of future earning capacity based upon economic performance of members of her class, (2) Nancy’s life expectancy derived from mortality tables, and (3) testimony concerning her past parttime employment, her education and activities, and her personal abilities and characteristics.
At the conclusion of the evidence, the court in its jury instructions directed a verdict against defendant on the issue of liability and submitted only the issue of damages to the jury. The jury returned a verdict for plaintiff in the amount of $445.95, the agreed value of Nancy’s personal property and effects' destroyed in the accident. Nothing at all was awarded for her loss of earning capacity.
Thereafter plaintiff filed various motions on various grounds, all seeking to set aside the jury verdict and to secure a new trial. Some sought a new trial on the issue of damages alone, and others sought a new trial on all issues. The district court entered an order and judgment setting aside the damage award by the jury, awarding plaintiff judgment on the issue of liability, and granting plaintiff a new trial restricted to the issue' of the amount of damages to be awarded. This action by the district court was based on its determination that there was'an insufficiency of the evidence to justify the verdict in that the' jury award of damages, in effect, amounted to a determination that Nancy had no earning capacity. Defendant appeals front this order and judgment of the district court.
As heretofore stated, the single issue upon this appeal is whether the district court abused its discretion in awarding plaintiff a new trial on the issue of the amount of damages to be awarded.
Defendant’s principal contentions are (1) there is substantial evidence supporting the verdict foreclosing the granting of a new trial, and (2) the jury instructions, given by the court without objection by plaintiff, became the law of the case and authorized a verdict of no damages for loss of earning capacity. It should be noted that defendant raises no issue in his brief or oral argument concerning the propriety of restricting the new trial to the issue of damages alone. Defendant’s entire argument is bottomed on the proposition that no new trial of any kind is permissible here.
At the outset, we observe that a new trial may be granted on the ground that under the evidence presented the award of damages is inadequate. Section 93-5603(6), R.C.M.1947; Flaherty v. Butte Electric Ry. Co., 42 Mont. 89, 111 P. 348; Coombes v. Letcher, 104 Mont. 371, 66 P. 2d 769; Hicks v. Strain Bros., 108 Mont. 598, 92 P.2d 763, 766. However, where there is substantial though conflicting evidence supporting the verdict, a new trial may not be granted. Kincheloe v. Rygg, 152 Mont. 187, 448 P.2d 140; Davis v. Smith, 152 Mont. 170, 448 P.2d 133. The rationale behind these rules is that where there is no substantial evidence supporting the verdict it amounts to an insufficiency of the evidence to justify the verdict, which is one of the statutory grounds on which a new trial may be granted. Our basic inquiry, then, must be whether under the evidence in the instant case there is substantial evidence to justify the award of no damages for loss of decedent’s earning capacity.
This brings us to defendant’s first principal contention noted above. Defendant contends there is substantial evidence supporting the verdict consisting of (1) failure of plaintiff to sustain his burden of proving by a preponderance of the evidence any loss of decedent’s earning capacity, and (2) the uncertain, speculative, and conjectural character of plaintiff’s evidence on loss of earning capacity. In substance, defendant relies on the weakness of plaintiff’s evidence on this item of damage, having produced no witness of his own on this issue.
Let us examine the evidence in the light most favorable to the defendant.
The first item of evidence produced by plaintiff was the testimony of an economics professor from the university of Washington, including charts and graphs introduced in evidence. His evidence primarily concerned the projected lifetime earnings, discounted to present value, of a school teacher in Kalispell based .upon the salary schedule in that locality. This witness admitted he did not know the decedent, had no idea of what she would do, did not know whether she would marry, change her goals, or become ill or disabled. His testimony was based on the assumption that decedent, a 19 year old unmarried sophomore at Eastern Montana College, would graduate as a physical education teacher, return to Kalispell, and teach there for the remainder of her economic life. Based upon these assumptions his evidence tended to support an award somewhere in the neighborhood of $175,000.
The testimony and evidence of this witness was expert opinion evidence based on hypothetical assumptions. This evidence was properly admissible and subject to consideration by the jury as a basis for determining reasonable probabilities of the future earnings of the decedent. See Krohmer v. Dahl, 145 Mont. 491, 402 P.2d 979; 15 A.L.R.2d 418. However, the credibility of the expert witness and the probative value of his testimony are questions for the jury. United States v. Francis, 9 Cir., 64 F.2d 865; Kelley v. John R. Daily Co., 56 Mont. 63, 181 P. 326. The jury was entitled to reject this testimony entirely if the basis on which it rested was unsound and was correctly so instructed in the following language :
“The rules of evidence ordinarily do not permit the opinion of a witness to. be received as evidence. An exception to this rule exists in the case of expert witnesses. A person who by education, study and experience has become an expert in any art, science or profession, and who is called as a witness, may give his opinion as to any matter in which he is versed and which is material to the case. You should consider such expert opinion and should weigh the reasons, if any, given for it. You are not bound, however, by such an opinion. Give it the weight to which you deem it entitled, whether that be great or slight, and you may reject it, if in your judgment the reasons given for it are unsound.” (Court’s instruction #4.)
The jury apparently gave this evidence no weight at all and was entitled to so consider it.
The second item of evidence was the agreed life expectancy of decedent of 57.4 years based on mortality tables relating to a 19-year-old female. The jury could have taken this into consideration and still arrived at the verdict, they did. Accordingly, further discussion of this item of evidence appears unnecessary.
The last item of evidence on damages for. loss of..decedent’s earning capacity, consists of. evidence relating. directly to the decedent as an individual. This evidence indicates that decedent was a vigorous and talented 19 year old college sophomore in excellent health and with no physical impairments. While in high school she exhibited exceptional talent in, track and field, winning local, state and national honors. She posthumously received the Little Sullivan Award as the State’s outstanding athlete. During high school she exhibited, an, pnusual interest in the teaching profession, assisting the track coach with the younger girls and teaching a physical education class for the entire year in a Kalispell elementary school without compensation.
After finishing high school, she enrolled in Eastern Montana College to pursue a teaching career, majoring in physical education. She continued her work in track and field and assisted in instruction of physical education in a Billings high school. She performed well academically in both high school and college, exhibiting exceptional leadership ability.
Decedent worked as a clerk at a children’s clothing store and at the cherry warehouse in Kalispell during high school. During college she was employed as a switchboard operator and also worked one summer in the cafeteria. No evidence was given concerning her earnings on these various jobs.
All of the foregoing evidence was uncontradicted. It constituted substantial credible evidence that she had some existing earning power at the time of her death. There is simply no evidence whatever that decedent had no earning capacity at the time of her death; that her death terminated her earning capacity is obvious.
Back in 1910 this Court affirmed the granting of a new trial to a father who recovered a damage verdict of $100 covering loss of his 3 year old boy’s services during minority on the ground of insufficiency of the evidence to support the verdict: Flaherty v. Butte Electric Ry. Co., 42 Mont. 89, 95, 111 P. 348. In that case, this Court said, in part:
“* ' * * to say that a healthy boy from the time he is 14 cannot' barn more than $100 in the next 7 years, or less than $15 per year," or $125 per month, is simply preposterous
If the verdict in that case was “preposterous”, the verdict in'the instant case is equally so.' Beyond this, the verdict is impossible under the evidence here. The jury may not disregard uncontradicted, credible nonopinion evidence. The uncontradic'tcd evidence- here shows an established earning capacity at the timé of decedent’s death while the jury verdict, in effect, • found none. Loss of earning capacity for which damages are sought herein is entirely different from loss of earnings, and- a person is entitled to recover for loss of earning capacity even though not presently employed. Thomas v. Whiteside, 148 Mont. 394, 421 P.2d 449. While there is a basis for substantial differences of opinion on the part of the jurors as to the amount of damages suffered by decedent’s loss of earning capacity, there is no basis in the'evidence for finding that decedent suffered no loss at all. .
For the foregoing reasons we hold that there is no substantial evidence justifying the jury verdict awarding no damages for decedent’s loss of earning capacity.
Defendant’s second principal contention is that nonetheless the jury instructions given without objection by plaintiff became the law of the case and permitted the jury to arrive at a verdict for no damages for decedent’s loss of earning capacity. This contention is based on several jury instructions relating to damages for loss of earning capacity which defendant contends are couched in permissive, rather than mandatory, language. Examples of these are court’s instruction No. 8 advising the jury that they shall find for the plaintiff in the sum' of $445.95, “and in addition, you may find such additional damages, if any, for loss of earning capacity of' Nancy Put- man * * *”; court’s instruction No. 9 advising the jury that “* * * you may award plaintiff such sum on that account as Nancy Putman would have earned for the rest of her life reduced to present worth * * court’s instructions Nos. 3, 10, and 11 concerning an award “of damages, if any”; and court’s instruction No. 15 instructing the jury that “In arriving at any award of damages in this ease,, if you should make an award * * *” to consider certain evidence.
Defendant’s argument is specious and illusory. In effect,, defendant contends that irrespective of the correctness of the jury instructions they become the law of the case and binding-on the jury, and that plaintiff’s failure to object to the instructions in question forecloses him from receiving a new trial on the ground of insufficiency of the evidence to support the verdict.
Some of the jury instructions heretofore noted may arguably be misleading if considered alone in the sense that if so considered they could be construed as permitting the jury to award no damages for decedent’s loss of earning capacity. Be that as it may, the issue raised herein is one of sufficiency of the evidence to support the verdict. The new trial was not granted on the basis of errors in jury instructions, but on an evidentiary basis having nothing to do with instructions to the jury. Just how failure to object to certain jury instructions is material to determination of sufficiency of the evidence to support the verdict under the circumstances disclosed here escapes us. To hold that failure to object to the words “if any”, “would”, or “should” used in certain jury instructions somehow constitutes a waiver of the right to seek a new trial on the basis of insufficiency of the evidence to justify the verdict would be patently unjust. ¥e therefore hold that irrespective of the jury instructions, there is simply no evidence to justify a jury award of no damages for loss of decedent’s earning capacity.
For the foregoing reasons we find no abuse of discretion by the district court, and its order and judgment are affirmed.
MR. CHIEF JUSTICE JAMES T. HARRISON and MR. JUSTICES HASWELL, CASTLES and JOHN C. HARRISON, «concur.
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MR. JUSTICE HASWELL
delivered the Opinion of' the Court.
This case is a condemnation proceeding instituted by plaintiff Montana Power Company to acquire á right-of-way easement across defendants’ lands for the purpose of constructing an electric power transmission line. Prom the preliminary order of condemnation entered by the district Court, defendants appeal.
Plaintiff Montana Power Company is a public utility engaged in..the production, distribution and sale of electric power. Defendants are owners and occupiers of agricultural land located generally northwest of Conrad, Montana. Plaintiff utility seeks to construct a 115 KV electric power transmission line from Great Falls to a point south of Cut Bank, Montana, where the Continental Pipe Line Company, a common carrier of crude oil transported through a pipeline system, operates a pumping-station.
The construction of the electric power line essentially involves placing “H-type” double pole structures in the ground to carry the wires. These structures are to bé placed at an average interval of about 750 feet, although the spacing intervals vary somewhat with the terrain and at some points three poles with supporting guy wires are contemplated. A distance of 10% feet separates the two poles in each double pole structure:
Between Conrad and Continental’s pumping station, plaintiff seeks to acquire by condemnation an easement on a 60 foot strip running across defendants’ lands for construction of this power line.
Early in 1968, plaintiff utility was contacted by personnel of the Continental Pipe Line Company in regard to furnishing electrical power for their pumping station south of Cut Bank. Negotiations culminated in a written agreement generally comprehending substantial amounts of electrical power to be furnished by plaintiff utility. The 115 KV power line was planned (1) to furnish these power requirements of Continental Pipe Line Company, (2) to meet the anticipated increasing power needs of the Conrad, Choteau, and Valier areas, arising from normal growth, and (3) because of the possibility of an interconnection with electrical line of the Bureau of Reclamation and Glacier Electric Cooperative. At the present time the power line from Conrad northwest to its terminus at Continental’s pumping station south of Cut Bank will serve only Continental, but service from that line is available to other customers should such service be required.
The four cases concerning the landowners heretofore mentioned were consolidated for hearing on the issue of public use and necessity. Hearing was held' in the district court of Pondera County before the Hon. Victor H. Fall, district judge presiding. The district court entered findings to the effect that plaintiff has the right to acquire property by eminent domain; that the use for which the property was sought is a public use; that the taking is necessary to such use; that the public interest requires such taking; and that the electric power transmission line has been located in a manner and along a route most compatible with the ' greatest public good and thé least private injury. Based upon 'those findings, the district court entered its preliminary order of condemnation.
Subsequently plaintiff utility deposited in court the amounts claimed by defendants and secured an order from the district court placing it in possession of the condemned property during the pendency of the action. Defendants' now appeal from the district court’s preliminary order of condemnation.
Upon appeal defendant landowners assign four issues for review which can be summarized as follows:
(1) Is the proposed taking for a public use?
(2) Is the proposed taking necessary for such use?
(3) Is the proposed taking compatible with the greatest public good and the least private injury?
(4) Does the proposed taking deprive the landowners of ‘■‘due process” as required by the Federal and State Constitutions ?
The gist of the landowners’ contention on the first issue is that the proposed taking is to provide electric power and service to a single customer; as such it is a taking for a private use and not a public use; and a taking for a private use will not support eminent domain proceedings. Alternatively they argue that the contract for furnishing power by plaintiff utility to Continental Pipe Line Company is illusory and does not require plaintiff utility to furnish power even to that one customer.
Condemnation proceedings by a public utility for the purpose of construction of an electrical power transmission line has been authorized by the legislature and has been so interpreted in past decisions of this Court. The legislature has empowered the plaintiff utility to acquire property by eminent domain. Section 15-2204(d), R.C.M.1947. The legislature has specifically declared that an electric power line is a public use for which private property may be taken by eminent domain proceedings. Section 93-9902(11), R.C.M.1947. This Court has held that dams, reservoirs, power plants, and electric power lines are public uses for which private property may be acquired under eminent domain. Helena Power Transmission Co. v. Spratt, 35 Mont. 108, 88 P. 773, 8 L.R.A.,N.S., 567.
Nonetheless the landowners claim that under the circumstances disclosed here the electric power transmission line is a private line for the benefit of only one customer. They contend that a public use requires an actual use by the public as a whole, or at least the right to use the proposed system by the public in general. They contend that these requirements are absent in the instant case and therefore there is no public use within the meaning of eminent domain proceedings.
At the outset, we recognize that there are two conflicting lines of authority in other jurisdictions concerning the requisites of a “public use” within the meaning of eminent domain proceedings. One view, the limited or narrow view, requires in general the actual use or right to use the proposed system by the public as a whole. The other view, called the board view, essentially requires only a use conferring a “public advantage” or a “public benefit”. Montana, as with many western states, has adhered to the broad view since 1895, presumably to promote general economic development. See Butte, A. & P. Ry. Co. v. Montana U. Ry. Co., 16 Mont. 504, 41 P. 232, 31 L.R.A. 298; Ellinghouse v. Taylor, 19 Mont. 462, 48 P. 757; Helena Power Transmission Co. v. Spratt, 35 Mont. 108, 88 P. 773, 8 L.R.A.,N.S., 567; Rutherford v. City of Great Falls, 107 Mont. 512, 86 P.2d 656; State ex rel. Helena Housing Authority v. City Council, Inc. 108 Mont. 347, 90 P.2d 514. Cases cited by the landowners are not controlling authority for the limited or narrow view—Northern Pacific Ry. Co. v. McAdow, 44 Mont. 547, 121 P. 473 (decided on the issue of necessity, not public use); State v. Aitchison, 96 Mont. 335, 30 P.2d 805 (decided on the issue of the right of the Fish and Game Commission to condemn, not public use); Komposh v. Powers, 75 Mont. 493, 244 P. 298 (decided on the basis that the road in question was a public and not a private road).
Thus, in Montana a public use is one which confers some benefit or advantage to the public. Such public use is not confined to actual use by the public, but is measured in terms of the right of the public to use the proposed facilities for which condemnation is sought. As long as the public has the right of use, whether exercised by one or many members of the public, a “public advantage” or “public benefit” accrues sufficient to constitute a public use. This principle is aptly expressed in Nichols on Eminent Domain, 3rd Ed., Y. 2, § 7.522 [3]., in the following language:
“As long as every member of the public has an equal right with all others, on equal terms, to the use of the power produced, it matters not that every person is not actually benefited thereby. ’ ’
Uses which serve a single person or a single enterprise have long been upheld as public uses in Montana if a “public advantage” or “public benefit” is derived. Komposh v. Powers, supra, (a road serving a single farm); Ellinghouse v. Taylor, supra, (a ditch supplying water to a single enterprise); Kipp v. Davis-Daly Copper Co., 41 Mont. 509; 110 P. 237, 36 L.R.A.,N.S., 666 (a railroad spur transporting ore from a single mine).
In the instant case the evidence indicates a “public advantage” or a “public benefit” supporting the finding of a public use. The testimony of George 0 ’Connor, president of- plaintiff utility, satisfies all requirements heretofore discussed:
“Q. And is the Company obligated to supply electric energy at reasonable rates and without discrimination to all persons, firms and companies that desire that power ? A. Yes, sir, under the law.
‘Q. Will you state whether or not all members of the public have an equal right with all others on equal terms to use the power generated, transmitted and distributed by the Company? A. They do, sir.
“Q. All right, Mr. O’Connor, I would ask you this. Would your-115 KY system north of Conrad be available to members of the public or other agencies who might require service off that line? A. It certainly would be.”
The Montana Power Company is a public utility and as such it has dedicated its property to the public use- under regulations imposed by the Montana Public Service Commission. Great Northern Utilities Co. v. Public Service Comm., 88 Mont. 180, 293 P. 294. Should plaintiff utility refuse to serve others from the proposed line, if can be compelled to do so in a proper case. Any user makes use of the line as a member of the public, because he is exercising a right which belongs to the public as a whole. Judge Russell E. Smith of the U. S. District Court, in a ease involving this same issue , as the instant ease (Landowners Consideration Ass’n v. Montana Power Company, D.C. Mont., 300 F.Supp. 54) summed the matter up in this language:
“In oral argument plaintiffs sought to distinguish Green Street Association v. Daley, supra [7 Cir., 373 F.2d 1], on the ground that it involved a public use, whereas, in this case the use is' alleged by plaintiff to be private. There is such a conclusory allegation in the complaint. The allegation is not amplified.' It is flatly contradicted by the findings of the state court. The defendant, The Montana Power Company, is a public utility; it is subject to regulation by the Montana Public Service Commission, both as to rates and practices. It is required to furnish reasonably adequate service at reasonable rates. (Title 70 R.C.M.1947) The service and the charges for the energy to be transmitted over the proposed line will be subject to regulation, as will the line itself. [Citing cases] Under these circumstances the usé cannot be a private use.”
■ Defendant landowners alternatively argue that the contract to furnish power to Continental is illusory. This contention is untenable. The contract speaks for itself. It comprehends the furnishing of power at fixed rates when the line is completed and when Continental’s motors are installed in 1969 and 1970. There is no evidence whatever that this is not a bona fide contract or that the contract is a smoke screen to enable-condemnation and construction of the power line. ':
For'the foregoing reasons we hold that the proposed taking is for a public use within the meaning of eminent domain proceedings. '
The second issue assigned for review is whether the proposed taking is' necessary for such use. The landowners contend that the proposed 115 KV power line for which condemnation is sought herein is inadequate to serve the power needs that exist north of Conrad thereby necessitating a duplicate line within a short time. This argument is bottomed on the theory that the proposed taking must adequately meet the needs of public use that exist or the taking is not necessary for public use.
Before the district court may order condemnation, it must find that the proposed taking is necessary to the public use under the circumstances of the individual case. Sections 93-9905, 93-9911, R.C.M.1947. The question of necessity is one of fact to be determined as other questions of fact in the light of all the evidence. State ex rel. Livingston v. District Court, 90 Mont. 191, 300 P. 916. Necessity does not mean absolute or indispensable necessity but reasonable, requisite, and proper for the accomplishment of the end in view, under the particular circumstances of the ease. State Highway Comm. v. Yost Farm Co., 142 Mont. 239, 384 P.2d 277; Butte, A. & P. Ry. Co. v. Montana U. Ry. Co., supra.
Examining the evidence in the light of the foregoing principles, we find that Mr. O’Connor, president of plaintiff utility, testified that Montana Power has a 69 ICY electric transmission system to the Conrad, Choteau and Valier area which is adequate for existing loads but engineering studies indicate that additional loads will require additional transmission capacity in the immediate future. Montana Power has contracted to> serve one industrial customer, Continental Pipe Line Company, who is contemplating installation of two 2250 horse power motors, one in 1969 and the other in 1970, in addition to the existing load. The required type of service was not available to the pipe line company from existing sources. The proposed 115 KV line would connect with Montana Power’s existing system and add reliability to it. The proposed line was designed at a voltage compatible with other lines with which it could be interconnected. A higher voltage would be excessive both in capacity and cost, while a lower voltage would not be adequate. The proposed line is adequate for the foreseeable future.
Mr. J. A. Fussell, a power utility engineer, called as a witness for defendant landowners, testified the proposed 115 KY line is badly overbuilt if built only to serve the Continental Pipe Line Company load; and it would be inadequate to handle other loading. The trial judge’s comment summarizes the thrust of this witness’ testimony:
“He says its overbuilt to handle this Continental Pipe Line load, and he says it’s underbuilt.”
The testimony of these two witnesses illustrates the existence of differences of engineering opinion which were resolved by the trial judge in favor of plaintiff utility, insofar as they concerned necessity. Plaintiff utility is taking only an easement, not a fee, in a 60 foot strip necessary for pole structures and required safe clearance. It is only taking what is necessary to the proposed use, not something excessive.
For these reasons, we hold that the district court’s finding on necessity is supported by substantial, credible evidence and •correct in law.
The third issue raised by the landowners is whether the proposed taking is compatible with the greatest public good and the least private injury.
The taking of private property by condemnation proceedings must be compatible with the greatest public good and the least private injury. Section 93-9906, R.C.M.1947. This requirement is specifically made applicable to easements and rights-of-way. Section 93-9904(5), R.C.M.1947. The greatest good on the one hand and the least injury on the other are questions of fact to be determined in passing upon the question of necessity. State ex rel. Livingston v. District Court, supra, quoted with approval in State Highway Comm. v. Yost Farm Co., supra. These questions commonly arise in connection with the location of the proposed improvement. Since the condemnor has the expertise and detailed knowledge of considerations in volved in determining location of the improvement, its choice of location is given great weight. See State ex rel. Bloomington Land & Live Stock Co. v. District Court, 34 Mont. 535, 88 P. 44; State ex rel. Livingston v. District Court, supra. Such choice will not be overturned except on clear and convincing proof that the taking has been excessive or arbitrary, it not being the function of the judiciary to determine as an engineer the best location of the proposed improvement. State Highway Comm. v. Crossen-Nissen Co., 145 Mont. 251, 400 P.2d 283. On the other hand when the condemnor fails to consider the question of the least private injury between alternate routes equal in terms of public good, its action is arbitrary and amounts to an abuse of discretion. State Highway Comm. v. Danielsen, 146 Mont. 539, 409 P.2d 443.
The evidence in the instant case shows, no abuse of discretion or arbitrary action on the part of the condemnor. The general location of the line was laid out from topographic maps and other data and then the line was flown several times to observe the terrain. The line was run to take advantage of open spaces such as grass lands and river bottoms and was routed as short as possible to reduce costs, improve efficiency of operation of the line, do the least harm to intervening landowners, and reduce the number of pole structures required. Natural barriers and other features not in crop land were utilized as much as possible. Alternatives were considered — use of a zigzag pattern rather than a diagonal across cultivated fields, use of single pole structures, and use of existing rights-of-way. These were rejected for a variety of reasons in determining the location of the line.
In summary, the line has to be located somewhere. No matter where it is put, some landowner’s property has to be crossed. H it is not the property of the landowners involved in the instant case, it is other landowners’ property. There is ample evidence here that the condemnor located the proposed line in such a manner as to avoid unnecessary injury. This being so the taking is not arbitrary or excessive, no abuse of discretion is involved, and the landowners in the instant case have no just cause for complaint.
The fourth issue assigned for review is whether the landowners have been denied constitutional “due process” under the Federal, and State Constitutions in connection with the taking of their land in the instant case. This issue is confusing as it was not separately argued or set out in the landowners.’ brief. However, the gist of their argument seems to be that the trial judge erroneously excluded their evidence showing (1) the proposed line is not adequate to serve the present and foreseeable power needs of the. areas to be served, and (2) alternative loca tions of the proposed line. As a result, the landowners argue, further condemnations will soon be necessary for yet another power line.
The record indicates the trial judge took the position that with the existence of one user (Continental Pipe Line Company) on the proposed line, a prima facie case of public use and necessity within the meaning of the condemnation statutes was established. This was correct and we so hold. As to limitation of proof contended by the landowners, this is simply not the case. The trial judge was quite liberal in permitting the introduction of .evidence along these lines. What he would not permit was speculative testimony on future contingencies that might or might not occur. He insisted on confining the proof to existing needs and considerations involving the segment of the line going north from Conrad aeros these landowners’ fields. We can find no error in this.
Perhaps the whole matter of “due process” is best summed up by Judge Smith in Landowners Consideration Ass’n v. Montana Power Company, supra:
“In condemnation proceedings as in lawsuits generally the Fourteenth Amendment is not a guaranty that a trial shall be devoid of error. West Ohio Gas Co. v. Public Utilities Commission (No. 1), 294 U.S. 63, 70 [55 S.Ct. 316, 79 L.Ed 761], To bring about a taking without due process of law by force of such a judgment, the error must be gross and obvious, coming close to the boundary of arbitrary action. The test has been differently phrased by different judges and in different contexts. At times we find the statement that the Constitution is not infringed unless there has been “absolute disregard” of the right of the owner to be paid for what is taken. Chicago, B. & Q. R. Co. v. Chicago, 166 U.S. 226, 245 [17 S.Ct. 581, 41 L.Ed. 979]; Backus v. Fort Street Union Depot Co., 169 U.S. 557, 565 [18 S.Ct. 445, 42 L.Ed. 853] ; Appleby v. Buffalo, 221 U.S. 524, 532 [31 S.Ct. 699, 55 L.Ed. 838]. At other times we are told that due process is not lacking unless ‘plain rights’ have been ignored, with a reminder that much will be overlooked when there is nothing of unfairness or partiality in the course of the proceedings. McGovern v. New York City, supra, [229 U.S. 363], at p. 373, [33 S.Ct. 876, 57 L.Ed. 1228]. From the very nature of the problem these phrases and others like them are approximate suggestions rather than scientific definitions. In the last resort the line of division is dependent upon difference of degree too subtle to be catalogued. Hudson County Water Co. v. McCarter, 209 U.S. 349, 355 [28 S. Ct. 529, 52 L.Ed. 828]; Klein v. Board of Supervisors, 282 U. S. 19, 23 [51 S. Ct. 15, 75 L.Ed. 140], cf. Davidson v. New Orleans, 96 U.S. 97, 104, [24 L.Ed. 616]. One cannot hope to mark its bearings in a sentence or a paragraph. Enough for present purposes that when the hearing has been full and candid, there must ordinarily be a showing of something more far-reaching than one of dubious mistake in the appraisal of the evidence. Due process is a growth too sturdy to succumb to the infection of the least ingredient of error. ‘It takes more than a possible misconstruction by a court to make a case under the Fourteenth Amendment.’ Seattle, R. & S. Ry. Co. v. [State of Washington ex rel.] Linhoff, 231 U.S. 568, 570 [34 S. Ct. 185, 58 L.Ed. 372].”
Here there was no showing or allegation of “gross and obvious” error “coming close to the boundary of arbitrary action” by the trial court. Accordingly we hold that defendants were not denied constitutional due process herein.
The judgment of the district court is affirmed.
MR. CHIEF JUSTICE JAMES T. HARRISON, and MR. JUSTICES CASTLES, JOHN C. HARRISON and BONNER, concur.
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DECISION
The application of the above-named defendant for a review of the sentence of thirty-five years, imposed on March 25, 1968, was fully ■ heard and after a careful consideration of the entire matter it is' decided that:
(1) The sentence be and remain as originally imposed by the sentencing court.
The reason for the above decision is that the defendant was convicted of second degree murder (shooting woman companion with a .32 automatic) punishable by not less than 10 years imprisonment with no limit. While the sentence imposed might have been less, it could also have been much greater under the statute. As we have said before in State, v. Brecht decided this day, “The sentencing problem does not yield to exact analysis. It deals with human beings with differing qualities, and is still the product essentially of a process requiring analytical skill, competence and judgment of human wisdom.” State v. Johnson, 158 A2d 746, (Conn.). Since the-presumption is that the sentencing judge was correct in his assessment of the situation (State v. Brecht decided this day), we are unable to say from anything presented to us in this case that the imposed sentence of 35 years with defendant presently eligible for parole consideration in September, 1974, was not proper, reasonable, and sufficiently lenient, the crime and the sentencing goals kept in mind.
Any contention of defendant that the killing was an accident, or that he was otherwise not guilty of the crime for which he was sentenced is not within the power of this Court to considers. Its-power is limited to, “* * * review the judgment so far as it relates to the sentence imposed * * *.” Section 95-2503, R.C.M. 1947.
SENTENCE REVIEW DIVISION
Philip C. Duncan, chairman; Paul G. Hatfield, Jack D. Shanstrom.
|
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JUSTICE GRAY
delivered the Opinion of the Court.
The City of Bozeman appeals from a decision and order of the District Court of the First Judicial District, Lewis and Clark County. The District Court’s ruling upheld an opinion by the Attorney General that the board of county commissioners of Gallatin County, and not the city commission of Bozeman, has final authority to approve subdivisions that are within the three-mile area immediately outside Bozeman’s corporate limits. We affirm.
The issue on appeal is whether the District Court erred in concluding that Bozeman’s city commission does not have final authority to approve subdivisions that are within the three-mile area immediately outside Bozeman’s corporate limits.
Bozeman has a commission-manager form of government. It also is a first-class city, as defined in § 7-1-4111, MCA. Bozeman and Gallatin County created the joint Bozeman City-County Planning Board in 1957. The Planning Board’s jurisdictional area includes the area within Bozeman’s corporate limits and the area up to four and one-half miles outside its corporate limits. Bozeman and Gallatin County have adopted the same master or comprehensive development plan and city/county subdivision regulations for the Planning Board’s jurisdictional area. Both claim final authority to approve subdivisions within the three-mile area immediately outside Bozeman’s corporate limits (“three-mile area”).
Bozeman and Gallatin County jointly requested an opinion of the Attorney General on the following question:
Does the board of county commissioners or the city commission, pursuant to section 7-3-4444, MCA, have final authority to approve subdivisions that are within the three-mile area immediately outside the corporate limits of the city when it has a commission-manager form of government?
The Attorney General answered the question as follows:
The board of county commissioners has final authority to approve subdivisions that are within the three-mile area immediately outside the corporate limits of the city when the city has a commission-manager form of government.
43 Op. Att’y Gen. No. 26 (July 20, 1989).
Bozeman filed a complaint for declaratory judgment seeking to have the Attorney General’s opinion overruled. It requested the District Court to order that it has final authority to regulate subdivisions in the three-mile area under § 7-3-4444, MCA. The court determined that the Attorney General correctly interpreted § 7-3-4444, MCA, concluding that the statute does not give Bozeman the claimed extraterritorial authority. This appeal followed.
The parties agree that the resolution of this case is strictly a matter of statutory interpretation. The District Court’s decision and order will be upheld if the court’s interpretation of the law is correct. Steer, Inc. v. Dept. of Revenue (1990), 245 Mont. 470, 803 P.2d 601.
The District Court began its analysis by examining the Montana statutes which generally define a municipality’s authority to regulate subdivisions beyond its corporate limits. Section 76-2-310, MCA, provides in pertinent part:
(1) The local city or town council or other legislative body which has adopted a master plan pursuant to chapter 1 may extend the application of its zoning or subdivision regulations, or both, beyond its limits in any direction but not in a county which has adopted such regulations within the contemplated area.
(2) (a) A city of the first class as defined in 7-1-4111 may not extend the application of its zoning or subdivision regulations, or both, more than 3 miles beyond its limits ....
In addition, § 76-2-311, MCA, provides:
(1) Any city or town council or other legislative body may thereafter enforce such regulations in the area to the same extent, as if such property were situated within its corporate limits, until the county board adopts a master plan pursuant to chapter 1 and accompanying zoning or subdivision resolutions, or both, which include the area.
(2) As a prerequisite to the exercise of this power, a city-county planning board whose jurisdictional area includes the area to be regulated must be formed ....
Standing alone, §§ 76-2-310 and 76-2-311, MCA, may appear to give Bozeman final authority to approve subdivisions within the three-mile area. Section 76-2-312, MCA, however, states that “[a] city or town which has as its plan of government the commission-manager plan shall be excluded from the provisions of 76-2-310 and 76-2-311 which define extraterritorial authority to review proposed subdivisions.” The District Court concluded that § 76-2-312, MCA, takes away the extraterritorial authority over subdivisions that Bozeman, with a commission-manager form of government, otherwise would have pursuant to §§ 76-2-310 and 76-2-311, MCA. It further determined that because Bozeman was excluded from the provisions of §§ 76-2-310 and 76-2-311, MCA, the question of which governmental body has final authority to approve subdivisions in the three-mile area must be answered by reference to the Montana Subdivision and Platting Act, §§ 76-3-101 through 76-3-614, MCA.
The District Court then reviewed § 76-3-601, MCA, which provides in part:
(2). . . .
(b) When the proposed subdivision is situated entirely in an unincorporated area, the preliminary plat shall be submitted to and approved by the governing body of the county. However, if the proposed subdivision lies within 1 mile of a third-class city or town or within 2 miles of a second-class city or within 3 miles of a first-class city, the county governing body shall submit the preliminary plat to the city or town governing body or its designated agent for review and comment.
(3) This section and 76-3-604, 76-3-605, and 76-3-608 through 76-3-610 do not limit the authority of certain municipalities to regulate subdivisions beyond their corporate limits pursuant to 7-3-4444.
It next reviewed § 7-3-4444, MCA, referenced in § 76-3-601(3), MCA. Section 7-3-4444, MCA, applies only to commission-manager municipalities and states:
(1) The director of public service shall be the supervisor of plats of the municipality. He shall see that the regulations governing the platting of all lands require all streets and alleys to be of proper width and to be coterminous with the adjoining streets and alleys and that all other regulations are conformed with. Whenever he shall deem it expedient to plat any portion of the territory within the corporate limits in which the necessary or convenient streets and alleys have not already been accepted by the municipality so as to become public streets or alleys or when any person plats any land within the corporate limits or within 3 miles thereof, the supervisor of the plats shall, if such plats are in accordance with the regulations prescribed therefor, endorse his written approval thereon.
(2) No plat subdividing lands within the corporate limits or within 3 miles thereof shall be entitled to record in the recorder’s office of the county without such written approval so endorsed thereon.
The District Court concluded that § 76-3-601(2)(b), MCA, limits the extraterritorial authority of municipalities over subdivisions to “review and comment” concerning the preliminary plat except as permitted by § 7-3-4444, MCA. It further concluded that the plain language of § 7-3-4444, MCA, grants the city’s director of public service only the limited ministerial power to review plats for subdivisions in the three-mile area with respect to their technical adequacy.
Bozeman challenges the District Court’s ruling, asserting that § 76-2-312, MCA, is not a limitation on the authority of commission-manager governments; rather, it is an acknowledgment by the legislature that such municipal governments already had the extraterritorial subdivision authority under Section 91 of Chapter 152 of the Laws of 1917, now § 7-3-4444, MCA. It argues that § 76-2-312, MCA, exempts commission-manager cities from procedural requirements that other forms of municipal government have to follow in order to exercise their extraterritorial subdivision authority.
Bozeman relies on a 1970 report to the legislature that was prepared by the Montana Legislative Council. In that report, the Legislative Council referred to what is now § 7-3-4444, MCA, and stated that the statute gives commission-manager cities “authority to approve or disapprove proposed subdivisions within three miles of the city.” Montana Legislative Council, A Report to the Forty-Second Legislative Assembly, December 1970, Report No. 34, at page 10. Bozeman further argues that § 76-3-601(3), MCA, with its reference to § 7-3-4444, MCA, also supports its position that it has final authority to approve subdivisions in the three-mile area. Therefore, the success of Bozeman’s argument is conditioned upon a determination that § 7-3-4444, MCA, grants Bozeman the claimed extraterritorial subdivision authority.
Our function in construing and applying statutes is to effectuate the intention of the legislature. State ex rel. Roberts v. Public Service Comm’n (1990), 242 Mont. 242, 246, 790 P.2d 489, 492. If the legislature’s intent can be determined from the plain meaning of the words used in a statute, we will go no further. Phelps v. Hillhaven Corp. (1988), 231 Mont. 245, 251, 752 P.2d 737, 741. In addition, it is the function of the courts to ascertain and declare what in terms or substance is contained in a statute; it is not our function to insert what has been omitted or to omit what has been inserted. Gaub v. Milbank Ins. Co. (1986), 220 Mont. 424, 427, 715 P.2d 443, 445. When more than one statute applies to a given situation, such construction, if possible, is to be adopted as will give effect to all. Schuman v. Bestrom (1985), 214 Mont. 410, 415, 693 P.2d 536, 538.
Upon examining § 7-3-4444, MCA, the District Court concluded:
With these rules of statutory construction in mind, this Court finds no reference in Section 7-3-4444, MCA, granting the Bozeman City Commission final subdivision authority over lands within three miles of its corporate limits. This Court certainly recognizes that there was such a reference to that statute by the Montana Legislative Council and there is a similar reference in Section 76-3-601(3), MCA. However, references such as those made by the aforementioned statute and by the Legislative Council cannot put words into Section 7-3-4444, MCA, that are not there. If the legislature wanted Section 7-3-4444, MCA, to say that a city commission has power to approve subdivisions within three miles of its border, it should say so. That is not, however, what the statute says.
The District Court’s interpretation of § 7-3-4444, MCA, is correct. The language of the statute is clear. The statute does not refer to the city commission. Nor does it grant the city commission final authority to approve subdivisions that are within the three-mile area. The authority that is provided by the statute is granted to the city director of public service. It is limited to ensuring that the involved plat complies with all of the regulations governing platting; if the plat does comply, the director of public service must approve it.
A city with a commission-manager form of government has two statutorily authorized functions with respect to subdivisions located within the three-mile area, in addition to participating in the master plan process. First, the city’s governing body or its designated agent reviews and comments on a preliminary plat submitted to it by the county governing body under § 76-3-601(2)(b), MCA. Second, in accordance with § 7-3-4444, MCA, the city’s director of public service reviews the preliminary plat to ensure its technical adequacy. We hold that the District Court did not err in concluding that Bozeman, through its city commission, does not have final authority to approve subdivisions that are within the three-mile area immediately outside its corporate limits.
Affirmed.
CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT and WEBER concur.
|
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MR. JUSTICE CASTLES,
delivered the Opinion of the Court.
This is an appeal by the plaintiff from an adverse judgment in an action brought to quiet title to certain oil and gas royalty interest. The action was brought against Adolph Norskog, who was subsequently realigned as a party plaintiff, and Ole E. Norskog. Shell Oil Company moved to intervene and the motion was granted.
Upon the trial, at the close of plaintiff’s evidence, the defendants moved for dismissal under Rule 41(b), M.R.Civ.P., on the ground that the plaintiff had shown no right to relief. The motion was granted and judgment entered for defendants. Plaintiff John Wight, Inc., appeals this judgment.
Appellant has stipulated that as to intervenor, Shell Oil Company, and respondent Ole E. Norskog, it waives any claim for royalty payments made prior to October 31, 1965. Appellant has also waived any claims for interest upon impounded royalties and upon previous royalties actually paid to Ole E. Nor skog. This stipulation results in causing the status of Shell Oil Company to become that of a stakeholder.
Appellant also stipulates that the only remaining* issue for determination by this court is whether the record title of the disputed interests is in the appellant or in the respondent Ole B. Norskog.
The chain of title begins with an oil and gas prospecting permit issued by the United States to Adolph Norskog on December 5, 1927, covering the lands here involved. On March 8, 1928, pursuant to a prior contract with John Wight, Adolph Norskog executed an agreement which is identified in this cause as Plaintiff’s Exhibit C. This instrument granted John Wight a power of attorney to deal with the prospecting permit. Further it provided that Adolph Norskog “does hereby sell, convey, transfer and deliver unto # * * [John Wight] one-half in all their right, title and interest in and to the oil and gas, and permit covering the lands above described or to such portion thereof as * * # [Adolph Norskog] may obtain a permit or title to.”
On March 8, 1928, John Wight executed an operating agreement with one Herbert Stokes which transferred the interest in the oil and gas and permit to him and reserved to Adolph Norskog a 7y2 percent and a 2y2 percent overriding royalty. It is our understanding that appellant is not claiming that this instrument only transferred Adolph Norskog’s y% interest in the permit. Therefore, this instrument transferred to Herbert Stokes the total interest in the permit save and except the interest reserved to the United States and the reserved overriding royalty to Adolph Norskog.
Also, on March 8, 1928, Adolph Norskog executed an instrument, here identified as Plaintiff’s Exhibit E which granted one-half of the reserved overriding royalties to John Wight.
Again on March 8, 1928, Adolph Norskog executed an instrument granting one-fourth of the reserved overriding royalties above to Ole E. Norskog.
■ On May 11, 1935, Adolph Norskog granted to Ole E. Norskog “an additional one-fourth (14) of seven and one-half per centum (714%) to the one-fourth (14) of seven and one-half per centum (7%%) royalty assigned March 8, 1928 * *
John Wight subsequently assigned his purported interest in the reserved overriding royalties to John Wight, Inc.
It is appellant’s position that Plaintiff’s Exhibit C granted John Wight a 14 interest in the reserved overriding royalties. Further, that Plaintiff’s Exhibit E granted John Wight the remaining % interest in the said royalties.
The first question which we must answer is, what is the character of the interest granted to John Wight by Plaintiff’s Exhibit C? The instrument granted “one-half in all their right, title and interest in and to the oil and gas, and permit # # p]ajn meaning 0f that phrase is that John Wight received one-half of whatever interest was in Adolph Norskog. Adolph Norskog had the total interest in the permit subject only to certain royalties payable to the United States which interests are not material here. Thus, John Wight got one-half of the total interest by virtue of Plaintiff’s Exhibit C. This interest is commonly termed the “working interest.” At this time there was no overriding royalty in existence.
The next question is what is the character of an overriding royalty. The overriding royalty is an interest carved out of the larger “working interest.” See Sullivan, Assignments by the Landowner and the Lessee, 17 Mont.L.Rev. 75. It finds its parallel in the law of real property in the other lesser interests in real property, for example, life estates. A life estate is an interest carved out of a fee simple. A transfer of a fee simple interest would give the right to grant a life estate but until it is created the life estate is not dealt with separately. The right to create a life estate is an aspect of the fee simple interest and the grantor cannot be said to have any interest in a life estate subsequently created by the grantee unless the grantor has reserved such a right in his transfer.
Similarly here the owner of the “working interest” has the right to create new and lesser interest but until it is created it is not dealt with separately and the right to create passes with the transfer of the “working interest.”
The final question is does the transfer of one-half of the “working interest” transfer a right to one-half of any overriding royalties subsequently created when such a right is not reserved in the subsequent transfer. It should be pointed out that John Wight executed this instrument for Adolph Norskog and thus he could have reserved one-half of the overriding royalties to himself in the same instrument in which he reserved them for Adolph Norskog. Since John Wight had one-half of the “working interest” he could transfer that to Herbert Stokes. Under his power of attorney he could transfer Adolph Norskog’s one-half interest. A transfer of the “working interest” with nothing reserved would mean neither of the two transferrers had any further interest in the property. With the reservation of the overriding royalty to Adolph Norskog a new interest was created. Since it was not in existence at the time of the execution of Plaintiff’s Exhibit C that instrument gave no interest in the overriding royalties separate from the larger “working interest” subsequently transferred to Herbert Stokes.
We find that Plaintiff’s Exhibit C did not grant a one-half interest in the overriding royalties to John Wight. The operating agreement of March 8, 1928, transferred 100 percent of John Wight’s interest to Herbert Stokes. After the execution of that operating agreement no interest was left in John Wight. Any interest he later had came to him from the transfer by Adolph Norskog in Plaintiff’s Exhibit E.
Appellant spends much time discussing Aronow v. Bishop, 107 Mont. 317, 86 P.2d 644 (1938). That ease is not authority for the proposition that a transfer of the “working interest” must also mention overriding royalties not yet in existence or some interest in them will remain in the transferrer.
The final issue with which we must deal is the language in the instrument of May 11,1935, which granted to Ole B. Norskog a one-fourth interest in the 7% percent overriding royalty. It is contended that the one-fourth interest in the 2y2 percent overriding royalty was not assigned to Ole B. Norskog. We do not have to decide the question for even if the interest was not transferred the ownership would be in Adolph Norskog and he has not appealed the decision of the lower court.
For the foregoing reasons the judgment appealed from is affirmed.
ME. CHIEF JUSTICE JAMES T. HAEEISON, and ME. JUSTICES ADAIE, HASWELL and JOHN CONWAY HAEEISON, concur.
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MR. JUSTICE HUNT
delivered the Opinion of the Court.
Plaintiff-appellant, Warwood, appeals an order of the Gallatin County District Court denying his motion for preliminary injunction to enjoin defendant-respondent from using the name “Yellowstone Outfitters” in conjunction with outfitting services. We affirm.
Appellant and respondent both offer outfitting services near Yellowstone Park, and both operate under the name “Yellowstone Outfitters.” Documentary evidence shows respondent was using the name in 1979, while appellant’s first documented use was in 1980. Neither party knew of the other’s use of the name until 1984.
The appellant raises several issues on appeal. However, the only issue we need to address is whether “Yellowstone Outfitters” is primarily geographically descriptive, and therefore not subject to exclusive appropriation as a mark at common law and not subject to registration according to statute. We conclude that it is primarily geographically descriptive.
The controlling statute is section 30-13-303, MCA. Under that statute:
“(1) a mark by which the goods or services of any applicant for registration may be distinguished from the goods or services of others may not be registered if it:
“(e) comprises a mark that:
“(i) when applied to the goods or services of the applicant, is merely descriptive or deceptively misdescriptive of them;
“(ii) when applied to the goods or services of the applicant is primarily geographically descriptive or deceptively misdescriptive of them . . . .”
The only Montana case concerning geographically descriptive names is Esselstyn v. Holmes (1911), 42 Mont. 507, 114 P. 118. In that case, we held that the District Court properly refused to enjoin the defendant from using the trade name “Owl Creek Coal” in the sale of coal mined, in common with coal mined by the plaintiff, in a region of country known as the Owl Creek Coal Field.
This Court’s reasoning in Esselstyn is equally applicable to the present case as well. In Esselstyn, we stated that:
“[N]o one can apply the name of a district or country to a well-known article of commerce, and obtain thereby such exclusive right to the application as to prevent others inhabiting the district or dealing in similar articles coming from the district from truthfully using the same designation.”
Esselstyn, 114 P. at 121, quoting Delaware & Hudson Canal Co. v. Clark (1871), 13 Wall. 311, 80 U.S. 311, 20 L.Ed. 581. Owl Creek is a geographical name by which a certain Wyoming stream is known. It is also the name of the region or district through which the stream of that name flows. As such, the name is descriptive and cannot be appropriated as a trade name or mark. Coal is a generic name descriptive in character and purpose. It cannot be appropriated as a trade name or mark. Coal denotes the generic article, while Owl Creek denotes the place or locality of its production, and the two together denote coal from Owl Creek. The common law and Montana statutory law deny exclusive appropriation of such a name.
Esselstyn is controlling in this case. Yellowstone is the name of a river, county, and a National Park. Outfitters is a name descriptive of services being offered in the region around Yellowstone National Park. Together, the two denote outfitting services in the Yellowstone area. Therefore, “Yellowstone Outfitters” is primarily geographically descriptive.
In addition, appellant does not fall within the exception to the rule against appropriation of geographically descriptive names. That exception is codified at section 30-13-303(2), MCA, which states that even a primarily geographically descriptive mark may be registered if it has become distinctive of the applicant’s goods or services. Appellant has not shown that the name has become distinctive of his services.
Therefore, we hold that the name “Yellowstone Outfitters” is primarily geographically descriptive and not subject to exclusive appropriation at common law or registration by statute.
The order of the District Court is affirmed.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES HARRISON, MORRISON, WEBER, GULBRANDSON and SHEEHY concur.
|
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MR. JUSTICE GULBRANDSON
delivered the Opinion of the Court.
The petitioner appeals from an order of the District Court of the Eighteenth Judicial District, Gallatin County, staying all proceedings in Montana and deferring to Arizona’s jurisdiction with regard to the custody of minor children. We affirm.
David Wayne Brown, respondent, and Lynda Sue Brown, petitioner, were married on February 27, 1982 in Utah. They had two children before separating early in 1984. At the time of the separation they resided in Arizona. However, the petitioner left Arizona and came to Montana with the youngest child sometime in early 1984. Apparently, on July 14, 1984, although the date is in question, she returned to Arizona in order to bring the older child back with her to Montana. The respondent alleges petitioner accomplished this by entering his residence with three unknown males who assaulted him while she removed the child. During a telephone conference on the question of jurisdiction, counsel for petitioner stated to the court that petitioner resided in Arizona from about October 1982 through June 1984.
On July 13, 1984, the respondent petitioned the Superior Court of Arizona for a dissolution of the marriage between himself and the petitioner. Service was initially accomplished through publication and on September 14, 1984, by registered mail. The respondent also petitioned the Arizona court for temporary custody of the children and for child support from the petitioner. Although she received notice on August 9, 1984 of a show cause hearing in Arizona on an order for temporary custody and support, the petitioner did not appear or respond. The Arizona court, after the hearing on August 13, 1984, awarded temporary custody of the children to the respondent.
The petitioner filed for a legal separation from respondent in Montana on July 20, 1984. She requested, and was granted, temporary custody of the children by the Montana court that same day pending a hearing.
The respondent moved to dismiss the Montana court’s temporary order on October 18, 1984 on the grounds that Arizona had jurisdiction because the family had resided in Arizona for an extended time prior to the filing of the action and because the children were forcibly removed from Arizona. On October 26, 1984, the Montana and Arizona courts jointly ordered an oral argument on the issue of jurisdiction to take place by telephone conference on November 5, 1984. Both judges and counsel for petitioner and respondent participated in the conference.
On November 19, 1984, the judges signed a joint order conferring jurisdiction of the custody issue in Arizona; staying proceedings in Montana; setting a hearing for December 27, 1984 on the issue of custody and support before an Arizona domestic relations judge; ordering the petitioner to be personally present at the hearing; and ordering the minor children to be present in Arizona on or prior to the hearing date.
Petitioner appeals this order and raises the following issue:
(1) Should Montana take jurisdiction to determine the custody and support of the minor children?
(2) Was the District Court required to appoint counsel for the minor children?
(3) Were the petitioner or the minor children denied due process or any other constitutional rights?
(4) Was the petitioner entitled to an evidentiary hearing in Montana?
The Uniform Child Custody Jurisdiction Act (UCCJA) addresses jurisdiction in custody cases where more than one state has an interest in the litigation. According to section 40-7-104, MCA, we look to the provisions of section 40-4-211, MCA, to determine whether a state has a sufficient interest to take jurisdiction.
“(1) A court of this state competent to decide child custody matters has jurisdiction to make a child custody determination by initial or modification decree if:
“(a) this state:
“(i) is the home state of the child at the time of commencement of the proceedings; or
“(ii) had been the child’s home state within 6 months before commencement of the proceedings and the child is absent from this state because of his removal or retention by a person claiming his custody or for other reason and a parent or person acting as parent continues to live in this state; or
“(b) it is in the best interest of the child that a court of this state assume jurisdiction because:
“(i) the child and his parents or the child and at least one contestant have a significant connection with this state; and
“(ii) there is available in this state substantial evidence concerning the child’s present or future care, protection, training, and personal relationships; or
“(c) the child is physically present in this state and:
“(i) has been abandoned; or
“(ii) it is necessary in an emergency to protect him because he has been subjected to or threatened with mistreatment or abuse or is neglected or dependent; or
“(d) (i) no other state has jurisdiction under prerequisites substantially in accordance with subsections (l)(a), (a)(b), or (l)(c) of this section ...”
In the case at bar, Montana is not the home state of the children and was not their home state within the prior six months. Both parties recognize that the family resided in Arizona from 1982 until June 1984. Thus Montana cannot assume jurisdiction under. (l)(a) of Sec. 40-4-211, MCA. Further, neither child has any significant past connection with this state. They never resided in Montana prior to their mother’s return in June or July 1984. While some evidence about the children’s current and possible future care is in Montana, any evidence regarding their prior care, protection, training, and personal relationships would be in their resident state, Arizona, rather than Montana. Thus, Montana cannot assume jurisdiction under (l)(b) of Sec. 40-4-211, MCA. (l)(c) requires the child’s physical presence and either abandonment or the necessity of emergency protection. Petitioner does not suggest abandonment and alleges no emergency situation that would require Montana’s jurisdiction rather than Arizona’s jurisdiction. Finally, Arizona was the children’s residence and home state and could and did take jurisdiction under subsection (l)(a), thus subsection (l)(d) provides no authority for Montana to assume jurisdiction.
Even assuming Montana has the authority under this section to hear this custody battle, several provisions of UCCJA would confer jurisdiction in the Arizona court. Section 40-7-107(1), MCA provides:
“A court of this state may not exercise its jurisdiction under this chapter if at the time of filing the petition a proceeding concerning the custody of the child was pending in a court of another state exercising jurisdiction substantially in conformity with this chapter unless the proceeding is stayed by the court of the other state because this state is a more appropriate forum or for other reasons.” Here, the proceedings in Arizona, the state of residence, were filed prior to those in Montana and Arizona had not stayed its proceedings. Thus, under this section the Montana court properly declined to exercise its jurisdiction.
Section 40-7-108, MCA, permits a court to decline to exercise jurisdiction if it finds that another state is a more appropriate forum. The factors that may be considered include which state is or recently was the child’s home state and the availability of evidence in the other state. The District Court’s decision to stay proceedings would have been proper under this statute as well. We hold that the District Court correctly stayed Montana proceedings and correctly ordered, in conjunction with the Arizona court, that jurisdiction rests in Arizona.
Section 40-4-205, MCA, states:
“[T]he court may appoint an attorney to represent the interests of a minor dependent child with respect to his support, custody, and visitation ...”
The sole concern of the court below was whether jurisdiction to determine those issues should be in Montana or Arizona. Section 40-4-205, MCA, applies to the substantive issues, not to the question of jurisdiction. The District Court committed no error in not appointing an attorney for the children.
In the third issue, petitioner contends that she and her children were denied due process, equal protection, and a speedy remedy when the District Court stayed Montana’s proceedings, leaving Arizona’s court system as the only forum for her claims. She supports these contentions by directing our attention to the lack of testimony, cross-examination and proper hearing in Arizona. Petitioner’s action in failing to appear after notice was the reason for the lack of testimony and cross-examination. The Arizona forum remains open to her and, if respondent fails to proceed, then the door to Montana’s court system will open. We find these contentions without merit.
Finally, petitioner argues that UCCJA conflicts with the “best interests of the child” test enunciated in section 40-4-212, MCA, and that the telephone conference regarding jurisdiction was not adequate as an evidentiary hearing. There is no conflict between the rules for determining jurisdiction when two states have an interest in a custody matter and the rules for determining custody. One is a procedural determination as to the proper forum, made prior to any substantive inquiry, and the other is the application of substantive rules. The telephone conference addressed only the procedural issue, thus evidence concerning the parental abilities of the parties or alleged misconduct of either would have been unnecessary and inappropriate. We hold that no evidentiary hearing was required under these circumstances.
The order of the District Court is affirmed.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES MORRISON, WEBER and SHEEHY concur.
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MR. JUSTICE JOHN CONWAY HARRISON
delivered the Opinion of the Court.
The appellant, Ralph Proctor, was convicted of burglary in the first degree in the district court of the Twelfth Judicial District, county of Hill and sentenced to three years in the Montana state prison. From this judgment he now appeals.
Sanvik Brothers’ Store in Rudyard, Montana, had been burglarized during the nighttime of November 23 or 24, 1967, and a large amount of money was taken from the office safe. This money included ten rolls of half-dollars which had been received from a Mr. Copenhaver in payment of a debt. Two weeks after the burglary a Mr. Edgar Wood deposited ten rolls of half-dollars in a bank in Chester, Montana, a neighboring community to Rudyard. The bank president notified the sheriff of Hill County of the deposit and the sheriff took the rolls to Mr. Copenhaver for identification. Prior to showing him the rolls, the sheriff asked Mr. Copenhaver if he could identify the rolls which he had paid to Sanvik Brothers’ Store. When Mr. Copenhaver explained the manner in which he could identify the rolls, the sheriff wrote it down.
Those notes, introduced at the trial, indicated that one roll had a 1945 Standing Liberty half-dollar;.that another roll contained two Canadian half-dollars, four or five from the end of the roll; and that a third roll contained two more Canadian half-dollars, two coins from the end of the roll. Then in the-presence of the sheriff, Mr. Copenhaver, and other witnesses the-ten rolls of coins were unrolled. Three of the ten rolls conformed to the description provided by Mr. Copenhaver from the peculiar manner he rolled the coins. More will be said on this later.
One witness testified that she saw defendant, Proctor, in the store two days before the burglary; there were no eyewitnesses to the burglary but the identification of the rolls of coins ties the defendant Proctor to the burglary. Mr. Wood, who had deposited the coins, was Mr. Proctor’s father-in-law and had received the coins from him in payment of a debt. Mr. Proctor did not testify at his trial.
On appeal the defendant raises three issues for review: (1) The admission of all the rolls of coins; (2) The admission of the sheriff’s notes as to how Mr. Copenhaver would identify the coins; (3) The sufficiency of the evidence to warrant a conviction. We will answer these issues in that order.
The defendant alleges that the rolls of coins were improperly admitted because of lack of identification. Mr. Copenhaver testified that besides the specific order of the coins “the only way I identified them was by the way I rolled them.”
This Court has previously stated:
“The lack of specific or positive identification marks is not of great import for the items were not so uncommon that a reasonable identification cannot be made. The lack of positive identification goes to the weight of the evidence rather than to its admissibility.” State v. Wilroy, 150 Mont. 255, 259, 434 P.2d 138. 140 (1967).
However, here a review of the evidence of identification convinces that a positive identification was made.
The defendant also contends that the notes of the sheriff as to how Mr. Copenhaver was to identify the rolls of coins were inadmissible because they were not the best evidence and a duplication of Mr. Copenhaver’s testimony. We disagree. The purpose of the evidence was to show the jury a manner ■of identification existed in Mr. Copenhaver’s and the sheriff’s minds before the rolls were opened. We have previously held that writings which tend to corroborate a witness’ testimony are admissible. Spurgeon v. Imperial Elevator Co., 99 Mont. 432, 43 P.2d 891 (1935).
The last issue and the central issue of this case is whether the •evidence was sufficient to warrant a conviction. See State v. Walker, 148 Mont. 216, 419 P.2d 300 (1966).
A defendant is presumed innocent until the contrary is proven and the burden is on the State to prove guilt beyond a reasonable doubt. Section 94-7203, R.C.M.1947. Yet there is a distinction between the burden of proof and the burden of evidence. In a criminal case the burden of proof never shifts, but the burden of the evidence may shift frequently. Under-hill’s Criminal Evidence, Fifth Edition, § 50, p. 78. Such is ■the situation here. The State presented sufficient evidence to make out a prima facie case and rested.
In State v. Evans, 60 Mont. 367, 373; 199 P. 440, 442, this Court said:
“It has been many times held by this court that mere possession of property recently stolen is not sufficient of itself to justify conviction. When, however, this fact is supplemented hy other facts inconsistent with the idea that the possession is honest, a case is made sufficient to submit to the jury.”
This was long the law of this state and insofar as it conflicts with State v. Fairbanks, 140 Mont. 243, 370 P.2d 497, we reverse the Fairbanks case.
Here, the conviction is based entirely on circumstantial evidence and the rule we pointed out in State v. Cor, 144 Mont. 323, 326, 327, 396 P.2d 86, 88 (1964), is applicable here.
“Circumstantial evidence is not always inferior in quality nor is it necessarily relegated to a ‘second class status’ in the consideration to be given it. The very fact it is circumstantial is not a sufficient allegation to justify a reversal of the judgment for such evidence may be and frequently is, most convincing and satisfactory. In any criminal case, evidence that is material, relevant and competent will be admitted, ‘nothing more and nothing less.’ The test is whether the facts and circumstances are of such a quality and quantity as to legally justify a jury in determining guilt beyond a reasonable doubt. If such be the case, then the Court should not, indeed cannot, set aside the solemn findings of the trier of the facts. State v. Espelin, 106 Mont. 231, 76 P.2d 629; State v. DeTonancour, 112 Mont. 94, 112 P.2d 1065.”
The fact question the jury faced was whether they were satisfied beyond a reasonable doubt that the tracing of the coins tied the defendant, Proctor, to the crime. They were, and so are we.
The judgment is affirmed.
MR. CHIEF JUSTICE JAMES T. HARRISON and MR. JUSTICES HASWELD, CASTLES and BONNER concur.
|
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ORDER RESPECTING CREDIT FOR INCARCERATION.
Section 95-2215(a), R.C.M. 1947, reads as follows: — •
“Any person incarcerated on a bailable offense and against whom a judgment of imprisonment is rendered shall be allowed credit for each day of incarceration prior to of after conviction except that in no case shall the time allowed as a credit exceed the term of the prison sentence rendered.”
It appears that the District Courts over the State have been interpreting this statute in various ways and in particular have specified in many instances in their judgments and commitments that the incarceration referred to in the statute is not to affect parole eligibility. Considerable confusion is the result.
It is our opinion that the statute permits no other construction than that any person committed to the State Prison for a crime or crimes committed on or after January 1, 1968, shall be entitled to credit for each day of incarceration for the crime or crimes concerned up to the time of reception at the State Prison as though already served at the State Prison at the time of reception, and must be so used in computing the time when defendant may be considered for parole eligibility, as well as discharge for a sentence or sentences fully served. Section 95-2215(a), supra; State v. Zachmeier, 153 Mont. 64, 453 P.2d 783, 26 St.Rep. 210.
IT IS, THEREFORE, ORDERED That the State Prison and the State Board of Pardons so credit and so use any such incarceration referred to and suffered by any person committed to the State Prison for any crime or crimes committed on or after January 1, 1968, irrespective of any specific order or direction of a District Court in its judgment and commitment that may conflict herewith.
The Secretary of this Division is directed to give notice to all Judges of the District Courts and to all County Attorneys by mailing each a copy hereof.
Dated this 15th day of July, 1969.
SENTENCE REVIEW DIVISION OF THE SUPREME COURT OF MONTANA
Philip C. Duncan, Chairman
Paul Gr. Hatfield,
Jack D. Shanstrom.
|
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MR. CHIEF JUSTICE HASWELL
delivered the opinion of the Court.
Husband appeals from an order dated September 24,1980, which imposed a sanction of $400 in attorney fees to be paid by him to wife’s counsel as a condition precedent to setting aside a default entered against him on August 4, 1980.
Two issues are presented to this Court: First, whether the notice of appeal was filed in a timely manner; secondly, whether the District Court abused its discretion in imposing a sanction of attorney fees as a condition precedent to setting aside the default.
On August 4, 1980, hearing was held by the District Court on two consolidated motions offered by respondent wife that requested the District Court (1) to hold appellant husband in contempt of court for arrearage in child support payments and (2) to amend a prior support order nunc pro tunc to reflect appellant father’s responsibility for the children’s medical deductibles and any medical costs exceeding the insurance coverage provided by the father’s employer. Appellant did not appear either personally or by counsel. No continuance had been obtained by appellant.
The District Court heard and granted the consolidated motions, defaulting appellant for failure to appear. Later that day, appellant’s counsel moved the District Court to set aside the default. This motion was argued on August 18, 1980. Appellant’s counsel contended that local custom and professional courtesy required the District Court and opposing counsel to make inquiry into appellant’s counsel’s absence from law and motion prior to allowing default to be taken. Appellant’s counsel also argued excusable neglect based upon numerous informal attempts he had taken to obtain a continuance.
The District Court took the matter under advisement and, on September 23, 1980, handed down an order which enun ciated that local custom provided for contacting attorneys to remind them of hearings in which only legal matters would be decided and not in instances where factual matters would be contested. The District Court did find excusable neglect but required appellant to pay $400 in attorney fees to respondent’s counsel as a condition precedent to setting aside of the default. It is from this order that appellant appeals. Notice of appeal was filed on June 2, 1981.
This Court may consider a matter on appeal only when appeal is taken pursuant to the Montana Rules of Appellate Civil Procedure. Rule 1, M.R.App.Civ.P., confers jurisdiction upon this Court to hear an appeal in specific cases, which include “a final judgment entered in an action or special proceeding commenced in a district court” and “from any special order made after final judgment.” An appeal from any special order made after final judgment includes an order setting aside or refusing to vacate a default judgment. State ex rel. Deck v. District Court (1922), 64 Mont. 110, 112, 207 P. 1004, 1005. Rule 5, M.R.App.Civ.P., requires that notice of appeal must then be filed within thirty days of entry of judgment or order or within thirty days of service of notice of entry of judgment or order when notice is so required by Rule 77(d), M.R.Civ.P. Such notice of entry of judgment is required to be served after entry of judgment or order to “each party who is not in default for failure to appear” and is to be then noted in the docket. Rule 77(d), M.R.Civ.P.
In the instant case, a careful examination of the District Court file reveals that no final judgment was entered after the August 4, 1980, default. Nor was the order entered on September 23, 1980, a final order. No service of notice of entry of judgment or order was made to either appellant or respondent in relation to either the default of August 4, 1980, or the order of September 23, 1980. This Court does not have jurisdiction of this matter. Until final judgment is entered, any appeal is premature.
Dismissed without prejudice for lack of jurisdiction.
MR. JUSTICES DALY, SHEA, MORRISON and SHEEHY concur.
|
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MR. CHIEF JUSTICE ADAIR:
This is an appeal from a judgment rendered June 8, 1949, in the district court of Blaine county, the Honorable C. B. Elwell, judge presiding, in a suit in equity involving the use of certain waters in the drainage area of Hay Coulee.
Appeal No. 8039. The right to the use of the water in the water shed of Hay Coulee was involved in appeal No. 8039 in this court, Federal Land Bank of Spokane v. Morris, 112 Mont.. 445, 116 Pac. (2d) 1007, wherein this court ordered modified a judgment of the district court of Blaine county, entered in May 1939 in an action brought by the Federal Land Bank, plaintiff, against Morris and 55 other named defendants.
Following the determination of appeal No. 8039, tlie district court of Blaine county, on March 6, 1942, made and entered a modified decree in the Federal Land Bank suit in conformity with the pronouncement of this court wherein only the Federal Land Bank, W. H. Morris and Alice M. Morris were decreed any water rights whatever in the action.
Appeal No. 8946. By complaint filed in December 1947 in the district court of Blaine county, Clarence Doney as an individual, and Chris D. Miller and Henry G. Miller, a copartnership, operating under the style of Miller Brothers, plaintiffs, commenced this suit against Lloyd Beatty, Helen Beatty, Raymond Lenhart, Mary Lenhart, Peter Woronik, Dorothy Woronik, James McClellan, Anker Holm, Casper Holm, and Federal Farm Mortgage Company, a corporation, defendants. The plaintiff Doney is the successor in interest of the Federal Land Bank and the plaintiffs Miller Brothers are the successors in interest of W. H. Morris and Alice M. Morris.
In this action plaintiffs seek: To have a court of equity adjudge them to be the successors in interest of the respective parties who were theretofore adjudged to have water rights in the Federal Land Bank case; to have the court adjudge that none of the defendants in the instant action have any right whatever to the use of any of the water in Hay Coulee and to have the court issue an injunction enjoining defendants from claiming, holding or diverting any water in Hay Coulee until the claimed rights and claimed appropriations of plaintiffs have been fully supplied.
Defendants admit that plaintiffs are the successors in interest of Federal Land Bank, W. H. Morris and Alice M. Morris; deny that defendants have interfered with any of the water rights of plaintiffs as theretofore decreed to their predecessors and deny that the decree entered in the Federal Land Bank case is binding upon any of the defendants herein.
In the instant suit Judge C. B. Elwell, again presiding, made and filed written findings of fact and conclusions of law and on June 8, 1949, rendered judgment adjudging: (1) That the plaintiff Clarence Doney is the successor in interest to and entitled to all of the rights and benefits conferred upon the Federal Land Bank of Spokane in the decree of said district court so entered therein on March 6,1942; (2) that the plaintiffs, Chris D. Miller and Henry G. Miller, as copartners, are the successors in interest to and entitled to all the rights and benefits conferred upon W. H. Morris and Alice M. Morris by said decree; (3) that plaintiffs are entitled to no injunctive or any other relief against defendants; and (4) that the appearing defendants have judgment for their costs.
Appellants assign various specifications of error, all involving the broad and important question of whether Hay Coulee as it exists on the lands of defendants is a water course with defined banks and channels through which the water, if not impounded in ponds and reservoirs by dikes and dams built on or adjacent to the lands of defendants, would flow to the land of plaintiffs for which water rights were adjudicated by the decree entered March 6, 1942, in the Federal Land Bank suit.
The Federal Land Bank case and this case were tried before the same judge sitting without a jury. During the trial of the instant case the parties stipulated that Judge Elwell should make a personal view and inspection of the lands, reservoirs, dams and dikes of the respective parties and of the terrain involved in this action, and it appears from the record that the .judge made such personal inspection.
In the Federal Land Bank case the court found that the water course to which the rights of the parties litigant are adjudged was Hay Coulee as it runs through township 36 north, range 17 and 18 east; and township 35 north, range 17 and 18 east, in Blaine county, Montana, and adjudged the Federal Land Bank to be the owner of the first right to the water in Hay Coulee in .Blaine county and W. H. and Alice M. Morris to be the owners of the second right to the use of the water in Hay Coulee in Blaine county.
The trial court found all the lands of the defendants other than those of Anker Holm and Casper Holm to be situate in Hill county in township 37 north, range 17 east “to the northwest of Hay Coulee as"adjudged and described in the decree of March 6, 1942. ” Emphasis supplied. There is substantial evidence which sustains this finding. It appears that the described land so located in Hill county is situate from 9 to 14 miles northwest of the lands of the plaintiffs for which their predecessors in interest were decreed water rights in the Federal Land Bank case.
The trial court further found that there is a reservoir known as the Massey reservoir with a capacity of 1,066 acre-feet now owned by the plaintiffs Miller brothers and situate north of the McLaren reservoir now owned by the plaintiff Doney and north of the Morris reservoir now owned by plaintiffs Miller brothers; that the waters appropriated by storage in the Massey reservoir were not directly or specifically adjudicated by the decree of March 6, 1942, in the Federal Land Bank case, except that the owner of the reservoir was prohibited by the general terms of such decree from impounding water therein until the rights of the Federal Land Bank and the rights of the defendants Morris had been filled.
It therefore appears that the appropriation of water rights by the defendants herein who live in Hill county (assuming for the moment that' the capture or impounding of diffused surface water upon their respective premises during the time of melting snow in the spring and from heavy rains constituted an appropriation thereof) was not considered or determined in the findings of fact and decree entered on March 6, 1942, in the Federal Land Bank ease. If such defendants or their predecessors in interest had no water right appropriation from a defined water course in Hay Coulee, it follows that none could be adjudicated to or against them, and, as shown above, none was adjudicated as to them in said decree of March 6, 1942.
In Heckman v. Northern Pac. Ry. Co., 93 Mont. 363, 379, 20 Pac. (2d) 258, 263, the term “water course” is defined as “a channel cut by running water, with well defined banks through which water flows for substantial periods of each year. ’ ’
In Popham v. Holloron, 84 Mont. 442, 450, 275 Pac. 1099, 1102, this court defined a natural “water course” as “ ‘a living stream with defined tanks and channel, not necessarily running at all times, but fed from other and more permanent sources than mere surface water’ (Le Munyon v. Gallatin Valley Ry. Co., 60 Mont. 517,199 Pac. 915), which channel may at times be dry, so long as, to the casual glance, it tears the unmistakable impress of the frequent action of water which has flowed through it from time immemorable (Hildebrandt v. Montgomery, 113 Or. 687, 234 Pac. 267; Tierney v. Yakima County, 136 Wash. 481, 239 Pac. 248).” Emphasis supplied.
While in the Popham ease, supra, the court there found the record showed a “natural ‘water course’ ” as defined in the above quotation from which a valid appropriation of water could be made, yet in Binning v. Miller, 55 Wyo. 451, 102 Pac. (2d) 54, which cites the Popham case, the facts as to the topography of Spring Gulch Creek there considered were most similar to those of Hay Coulee here involved and the court there said: ‘ ‘ Counsel also call attention to the statement of the witness Miller that ‘that channel existed before any white man came to the country.’ But that statement is of no significance. The draw or depression or low place was there, of course. ’ Water must escape. It runs in the low places. That does not show that the low place constituted a natural stream any more than the depression or swale which was fully discussed in the case of State v. Hiber, 48 Wyo. 172, 44 Pac. (2d) 1005. * * * David P. Miller testified that at that time Spring Gulch Creek in the ‘extreme lower part of section 6 has very definite channels and banks and so forth. ’ * * * The witness Glasgow, who was a witness for Binning, testified: ‘Q. Doesn’t it (the so-called Spring Gulch Creek)' or not, develop into a stream that is visible? A. Yes, at the lower end it develops into a stream, where this dam is. ’ It appears that the trial judge examined the ground. * * * we are not, we think, justified in holding that the finding of the trial court is wrong that Spring Gulch Creek is a natural stream, in so far as the lower end of the swale or draw in question is concerned where the claim of the intervener Charles J. Bayer originates * * [55 Wyo. 451, 102 Pac. (2d) 59.] Emphasis supplied. Binning v. Miller, supra. The court held also that surface waters in such gulch on land above where a natural channel had developed was not subject to appropriation.
In the case of State v. Hiber, 48 Wyo. 172, 44 Pac. (2d) 1005, cited in the above quotation, it appeared that the draw involved was dry most of the time, that it had no banks, that it was covered with grass, that it was mainly on defendant’s land, that it contained running water only after heavy rains and during spring, that porous soil prevented water flowing for any distance, which facts warranted the adjudication that the draw was not a “water course” and that defendant could not be en: joined from impounding the water therein.
The facts in this case bring it within the rule of law as announced by the above authorities. The evidence in the record before us shows that Hay Coulee in Hill county at the upper end in sections 2, 3, 12, 13 and 14 of township 47 north, range 16 east, owned by the defendants Lenhart and McClellan, is a slightly rolling prairie with no coulee whatever and covered with grass except where plowed and producing crops of grain extending across the low ground; that the slope or grade of the low ground or depression across defendants’ lands is only about one foot per one thousand feet while the width of the depression or basin in the prairie varies from about one-quarter mile through the Lenhart and McClellan lands to about seven or eight hundred feet through the Beatty land in section 24, township 37 north, range 16 east, and section 19, township 17 north, range 17 east, and through the "Woronik land in sections 20, 21, 29, 30, and 32, in township 17 north, range 17 east; that the depression through such lands is also covered with grass except where plowed and producing crops thereon.
It also appears that there are several small swales or depressions sloping into Hay Coulee as it passes over defendants’ lands; that none of the swales or depressions have springs or evidence of running water therein and are all covered with grass except where plowed; that the only water appearing upon any of such prairie lands is from melting snow in the spring or rain during the spring and summer; that there is no marked channel with defined banks or other evidence of flowing water in the so-called Hay Coulee until it reaches a point some distance below the land of the defendant "Woronik which land is located below the lands of the defendants McClellan, Lenhart and Beatty; that in order to capture and use water so accumulated on the lands of the respective defendants they constructed dikes or small dams at certain low places or depressions on their premises to impound such diffused surface water in reservoirs for watering livestock and adding moisture to the ground beneath the reservoirs for cultivation purposes.
The evidence further shows that the defendants employed a civil engineer and land surveyor to check. Hay Coulee and their lands therein and to measure the reservoirs so impounding water upon their lands. The defendants having lands at the upper end of the coulee and their engineer all testified there was no sign of a water channel in Hay Coulee on or from the McClellan land down to and through, the Woronik land; that below the Woronik land and above the Massey reservoir the coulee is more pronounced and there is some sign that water has been running; that between such points there are several pot holes from 10 to 100 feet long, from 5 to 10 feet wide and from 2 to 10 feet deep; that these pot holes catch and hold the surface water arising from excessive melting of snow or heavy rains that may come down the coulee from above Massey reservoir.
A second engineer who testified for plaintiffs did not inspect the coulee above the Lenhart land, but testified that below the Lenhart reservoir “in the low places it shows a defined channel.” However on cross-examination he testified:
“Q. Well now, what do you mean by‘channel’? A. Well, it showed where the watercourse would be when you would get the runoff in the spring. It might be 30 or 40 feet across and some places it would be pretty near 100 feet across. * * *
“Q. Now, I understand that by ‘defined channel’ you simply mean the low place in the coulee? A. Yes, sir, the low place in the coulee.
“Q. You are not talking about the point where a stream of water has eroded the soil and created banks, cutbanks? A. No.
“Q. You don’t mean that? A. Yon don’t find that in this north country. ’ ’
The testimony of the above witness as so explained by him is not in conflict with that of the defendants nor with that of defendants’ engineer whose testimony was to the effect that there was no defined channel with banks created by running water in Hay Coulee until one followed it below the Woronik land.
The evidence shows that the Massey reservoir which is about a mile below the Woronik land had a capacity of 1,066 acre-feet of water, an acre-foot of water being “the amount of water which would cover one acre one foot in depth, and containing 325,851 gallons of water.” 2 Kinsey on Irrigation and Water Rights, 2d Ed., sec. 894, p. 1582.
The capacity of reservoirs of the defendants above the Massey reservoir is as follows: McClellan’s four contain a total of 44.5 acre-feet of water; Lenhart’s one contains 47 acre-feet; Beatty’s four contain a total of 51.5 acre-feet; and Woronik’s six contain a total of 167.3 acre-feet, or a total of 310.3 acre-feet of water. McClellan had a reservoir built in 1915; Lenhart’s reservoir was built in 1941; Beatty has one built in 1923; Woronik has two that were built in 1914 and 1915; Holm’s reservoir was built in 1944.
We find no substantial evidence to satisfactorily establish that if all defendants’ dams or dikes were removed from their lands the surface water that comes from melting snow or heavy rains would ever reach the lands of the plaintiffs, taking in account the loss that must come from seepage, evaporation and collection and capture in pot holes in the coulee before such water reaches the Massey and Morris reservoirs, both owned and controlled by the plaintiff Miller brothers. The evidence shows the Massey reservoir, located about five miles above the lands of the plaintiffs, has not been open for the release of water since 1929 nor has the water overflowed its dam in all that time.
The trial court further specifically found: “By reason of the gradual slope of the beds of the swales and draws upon the lands of the defendants McClellan, Lenhart, Beatty and Woronik, the natural obstructions in and adjacent to the beds thereof, the small area of drainage thereto, and the cultivation in and near said swales and draws, none of the surface water originating and collecting upon the respective lands of said defendants, except in times of extraordinary floods, would reach the Massey Reservoir or be available to the plaintiffs, or any thereof, for irrigation or other purposes. ’ ’
As to the defendants, Anker Holm and Casper Holm, the situation is substantially the same, the evidence showing that there is no defined channel or water course with defined banks in the flat basin or depression in which their lands is situate; that such basin slopes gradually into Hay Coulee several miles below the Massey and Morris reservoirs and that the defendants Holm have also impounded on their lands in such basin the surface water originating from melting snow and spring rains. From their dike or dam so impounding their surface water down to where the basin connects with Hay Coulee the Holm land is all plowed and cultivated by them. There is no substantial evidence to establish that if this surface water was not so impounded it would reach the lands of plaintiffs. Here again the trial court found: ‘ ‘ There is no competent evidence as to how much of surface water originating on the Holm lands would reach the MeClaren reservoir each year. None of such water would reach either the Massey or Morris reservoir.”
The McLaren reservoir is owned by plaintiff Doney and the other two reservoirs by plaintiffs Miller brothers. The trial judge, having viewed Hay Coulee and the land and reservoirs involved, was in a much more advantageous position to correctly determine the fact questions here presented than are the members of this court who must rely upon the cold printed record presented to us on this appeal.
However, from such record it appears to us that there is no water course having a marked channel and defined banks, but only diffused surface water coming from melting snows or rains, which at times collects or stands in low places, depressions, pot holes, and shallow basins. As to such diffused waters the plaintiffs did not and they cannot make a valid appropriation for use on their lands located a number of miles below, and the defendants have the right to collect, capture and impound such diffused surface drainage while it is on their own lands and farms for use thereon.
The statute prqvides that “an appropriator may impound flood, seepage, and waste waters in a reservoir and thereby appropriate the same. ” R. C. M. 1947, sec. 89-801. See Raymond v. Wimsette, 12 Mont. 551 at pages 560, 561, 31 Pac. 537, 33 Am. St. Rep. 604.
Considerable law has developed around the physical distinction between legal watercourses and diffused surface waters as the basis for determining whether or not the law of watercourses shall be held applicable to the facts in a given case.
A water course in general has a definite channel as well as a flow of water while diffused surface waters are waters which, in their natural state, occur on the surface of the earth in places other than water courses or lakes or ponds. The diffused surface waters may originate from any natural sóurce. They may be flowing, vagrantly over broad lateral areas or, occasionally for brief periods, in natural depressions, or they may be standing in bogs or marshes.
The essential characteristics of diffused surface waters are that their flows are short-lived and that the waters are spread over the ground and not concentrated or confined in channel flows of legal watercourses nor yet concentrated or confined in bodies of water conforming to the definition of lakes or ponds.
In 1 Kinney on Irrigation and Water Rights,. 2d Ed., in discussing water courses in section 301, at page 486, the author quotes with approval the definition of a water course appearing in an Idaho case, as follows: “ ‘A water course is a stream of water flowing in a definite channel, having a bed and sides or banks, and discharging itself into some other stream or body of water. The flow need not be constant, but must be more than mere surface drainage occasioned by extraordinary causes; there must be substantial indications of the existence of a stream which is ordinarily a moving body of water.” Again in section 312, Kinney says: “But a water course does not include holes, gullies, or ravines in land, in which mere surface water from rain or melting snow at irregular periods, is discharged through them from a higher to a lower level, and which at other times are destitute of water. In the absence of a permanent source of water supply there can be no water course in its legal sense.” Emphasis supplied. See: 1 Wiel on Water Rights in the Western States, 3d Ed., page 354, sec. 334; LeMunyon v. Gallatin Valley Railway Co., 60 Mont. 517, 199 Pac. 915.
The findings of the trial court are supported by ample substantial evidence. We find no merit in any of the specifications assigned, — we find no showing of any abuse of discretion on the part of the trial court, nor do we find any prejudicial error in the record. Accordingly, the judgment is affirmed.
Rehearing denied July 29, 1950.
ASSOCIATE JUSTICES FREEBOURN and METCALF concur.
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MR. CHIEF JUSTICE JAMES T. HARRISON
delivered the Opinion of the Court.
This is an appeal from a judgment entered in the district court of the eighteenth judicial district.
For purposes of simplicity Yernon E. Newman will be referred to as claimant, Fred Kamp as employer, Truck Insurance Exchange as appellant, and Fireman’s Fund Indemnity Co., as respondent.
On March 20, 1959, claimant was employed as an automobile mechanic by Fred Kamp who operated a garage in Three Forks, Montana. On that date and while in the course of his employment, claimant suffered an injury to his foot when a piece of steel became lodged in the right toe area. At this time appellant Truck Insurance Exchange was employer Kamp’s insurance carrier for industrial accident. The record shows that on September 16, 1959, appellant Truck Insurance Exchange paid a claim of $52.32 in connection with the aforementioned injury.
On December 11, 1959, while working for the same employer, but at which time the employer Kamp was insured for industrial accidents by respondent Fireman’s Fund Indemnity Co., claimant suffered a second accident to the same toe when he struck it against a jack handle. The severity with which claimant struck his toe on December 11, 1959, is not clear from the record, however, medical testimony does indicate that the blow at least caused osteomyelitis, which had set in after the first accident, to flare up.
From March 20, 1959, the date of the first injury, to December 11, 1959, the date of the second injury, the claimant lost little time at work, although he did require some medical attention. Medical testimony indicates that the injury suffered on March 20, 1959, never completely healed, but was growing better gradually at the time of the second accident. We see from the record that the claimant’s condition was complicated by Beurger’s disease, diagnosed as such on March 31, 1959, and diabetes, which was discovered on December 26, 1959. Claimant has not worked since December 26, 1959.
Claimant filed a claim for compensation for the second injury; the Industrial Accident Board heard the matter and determined that appellant Truck Insurance Exchange, the insurer at the time of the first accident on March 20, 1959, should pay the claimant $30.50 per week every four weeks until the claimant was able to return to work or until further order of the board. Appellant then appealed to the district court, and after hearing additional evidence, the court adjudged that appellant Truck Insurance Exchange should pay to the claimant $30.50 per week for 500 weeks for total disability which is of a permanent nature.
Appellant’s six specifications of error present the following two issues: first, whether the evidence is sufficient to support the finding that the claimant’s disability is due to the first injury; and, second, whether R.C.M.1947, § 92-703, limits the maximum period of recovery to 180 weeks. It should be noted that both the respondent Fireman’s Fund Indemnity Co. and the appellant Truck Insurance Exchange contend that the second issue should be answered in the affirmative; the latter briefed this issue, while the former concurred during oral argument.
This is a case involving two accidents occurring during successive periods of coverage by different insurers where, at the time of the second mishap, the injury resulting from the first accident had not completely healed. Both the Industrial Accident Board and the district court held that claimant’s disability resulted from the first accident.
Respondent’s (Fireman’s Fund Indemnity Co.) position rests primarily on the following two findings of fact made by both the board and the district court: (1) the claimant developed osteomyelitis in the right foot, which was well advanced and symptomatic at the time of the bumping on the jack handle on December 11, 1959; and, (2) the osteomyelitis pre-existed the accident of December 11, 1959, and would have, in any event, become disabling to him regardless of the second accident.
In light of the foregoing findings of fact, we must keep in mind the following well-established rules concerning scope of review. We have held that this court will not reverse the finding of the district court except where the evidence clearly preponderates against it. Woin v. Anaconda Copper Mining Co., 99 Mont. 163, 176, 43 P.2d 663 (1935); Tweedie v. Industrial Accident Board, 101 Mont. 256, 265, 53 P.2d 1145 (1936). Similarly, we stated in Birnie v. United States Gypsum Co., 134 Mont. 39, 44, 328 P.2d 133 (1958), that our duty is to determine whether there is any substantial evidence in the record to justify the conclusion of the court.
With the aforementioned rules in mind, we deem the following testimony relevant on the question of whether or not the first injury on March 20, 1959, caused the disability to claimant Newman.
Dr. Bertagnolli, who first treated the claimant on March 31, 1959, for the first injury testified that the last time he saw claimant on June 1, 1959, he felt claimant was well improved from the infection caused by the first accident. However, he further testified that later the same summer he heard from claimant’s wife who informed him that claimant had a recurrence of symptoms, which caused the doctor to be concerned about gangrene due to claimant’s poor circulation.
Dr. Crary, who treated the claimant on December 26, 1959, testified: “* * * the damage done must have been from some effect of the previous injury.”
Dr. McCabe, who examined the claimant on August 17, 1960, gave the following testimony:
“Q. You have heard his story of the two accidents, and do you think that the first accident was ever completely healed, that the injury from the first accident was ever completely cured? A. Well, from his history, I would have to say no, because he continued apparently to have drainage from that foot.
“Q. He had drainage up until the time he struck it the second time? A. Yes.
‘ ‘ Q. It will be difficult to tell how much injury he got from the second bruise or bump? A. Yes, it would.”
Dr. Jenko, who treated the claimant at Fort Harrison Veteran’s Hospital, testified that the claimant had been to surgery twice at Fort Harrison, and, although the pains at night had been relieved, it did not do much as to his tolerance for distance walking, because claimant walks a block or so and commences tO' experience pain. Dr. Jenko further testified:
“Q. Do you think that the first accident caused the osteomyelitis or is there any way of telling? A. Yes, I would say that it did.
‘ ‘ Q. The first accident caused the osteomyelitis ? A. I would say as far as I can tell from the history — I haven’t seen the man up until that time.
‘1Q. Knowing what you know, you are of the opinion that the osteomyelitis antedated the second injury, that the osteomyelitis was in existence at the time of the second accident? A. Yes, I would say so.
“Q. Because the foot was still draining? A. Yes, at the time of the second accident.”
Dr. Klein, who examined claimant on behalf of the respondent Fireman’s Fund Indemnity Co. on August 17, 1960, and January 25, 1961, testified as follows:
!‘Q. And now what effect, if any, did this second bumping have, in your opinion, on this infected toe ? A. I think it temporarily aggravated the osteomyelitis. I think — it is my opinion further that the osteomyelitis process responded poorly to treatment and also persisted because of the examinee’s diabetes. I think that a second aggravating fact. I also think the trauma delivered at the second accident definitely aggravated him because his resistance to infection was low and that would result from his bumping the foot. * * *
“Q. Having examined this man twice and now this history, is it your opinion, based on a reasonable medical certainty, that this osteomyelitis ante-dated the accident of December 11, 1959 ? A. Yes, it is. I am reasonably certain that the osteomyelitis was caused by the initial accident of March, 1959, and ante-dated by a good many weeks — up to a couple of months — the second injury of December 11, 1959.
“ Q. Now doctor, does the fact that there was a foreign body introduced in the first accident have any bearing on your opinion? A. Yes, it does. I think the foreign body was the causative factor in causing the osteomyelitis. * * *
“Q. Did it [the second accident] make it [the injury] substantially worse or cause it to flare up ? A. Caused it to flare up temporarily but did not change or substantially influence the course of the underlying bone disease. * * *
“Q. * * * Is it not only possible but probable under all the facts and circumstances shown here that if there had been no second accident it may have gone into spontaneous remission and cure? Isn’t that a probability? A. Not a probability. I think it may be a possibility if he were keeping his diabetes under control, if he had not injured it the second time, I think there is a good chance that this could have gone on to spontaneous cure. * * *
“Q. I am willing to accept your diagnosis, doctor, of osteomyelitis and that it was probably caused by the steel going into the foot back in March of 1959. All I am asking you is can you say with any degree of certainty from the examination that you have made that if it had not been for the second accident in December of 1959, can you say that with any degree of certainty this condition would not have continued to improve and that he would not have been able to continue with his work ? A. I can say it with considerable — I can say yes with considerable authority that the process could have gone on to healing — if it hadn’t been for the second accident. ’ ’
The foregoing testimony establishes the following: first, it is uncontroverted that the osteomyelitis pre-existed the second accident and was caused by the first accident; second, it also is uneontroverted that the injury caused by the first accident had not completely healed at the time of the bumping on December 11, 1959; third, we see that claimant responded poorly to treatment for osteomyelitis because of poor circulation (Beurger’s disease) and diabetes; and, fourth, there seems to be some conflict as to the effect of the second accident — Dr. McCabe opined it would be difficult to tell how much injury the claimant received from the second bruise or bump while Dr. Klein testified that the second accident did not substantially influence the course of the underlying bone disease, but he further stated that the osteomyelitis could have gone on to spontaneous cure had it not been for the second accident.
The Industrial Accident Board after hearing New man’s claim for compensation, and the district court after examining the record, certified to it by the board and hearing additional testimony held that the claimant’s disability was the result of the first accident at which time the appellant Truck Insurance Exchange was employer Kamp’s insurance carrier. Proximate cause is a question of fact and for a claimant to recover for an injury from an industrial accident, he must establish by a preponderance of evidence that such injury was the proximate cause of his present condition. Moffett v. Bozeman Canning Co., 95 Mont. 347, 350, 26 P.2d 973 (1933). Likewise as in the instant case where there are two insurers and two accidents, it is incumbent upon the insurer seeking to be relieved from liability to establish by a preponderance of evidence that the claimant’s present condition was caused by an accident occurring when the other insurer was on risk.
Beviewing the evidence as a whole, we cannot say that it clearly preponderates against the finding of the district court that the claimant’s present condition was caused by the first accident, nor can we say that there is no substantial evidence in the record to justify the conclusions of the district court.
Appellant Truck Insurance Exchange asserts that the situation presented in the instant case is not unlike the cases involving pre-existing disease where the employer takes the employee as he finds him. See Birnie v. United States Gypsum Co., 134 Mont. 39, 45, 328 P.2d 133 (1958). Suffice it to say that in the instant case we are dealing with a present condition caused by an industrial accident, whereas in the cases of pre-existing disease the pre-existent condition did not proximately result from an industrial accident.
Appellant next looks to Massachusetts for a rule which holds liable the insurer at the time of the most recent injury that bore a causal relation to the incapacity, even though the earlier injuries were also contributing causes, or even the major contributing cause. See 100 C.J.S. Workmen’s Compensation § 373, p. 97, and cases cited therein. We do not deem the above rule applicable in Montana in view of the fact that we are committed to the doctrine that the particular injury must be the proximate cause of the present condition for which the claimant seeks compensation, Moffett v. Bozeman Canning Co., supra, whereas the Massachusetts rule mechanically looks to the most recent injury so long as it has some connection, however casual, to the subsequent condition.
Appellant further contends that had claimant not been covered by Workmen’s Compensation at the time of the first injury, respondent would have been liable. This does not necessarily follow, because if respondent, in that type of situation, proved by a preponderance of the evidence that the first injury caused the present disability, the claimant would then have to look to his employer.
Both the respondent Fireman’s Fund Indemnity Co. and the appellant Truck Insurance Exchange contend that under the provisions of B..C.M.1947, § 92-703, and in view of our holding in Becktold v. Industrial Accident Board, 137 Mont. 119, 350 P.2d 383 (1960), the claimant is entitled to no more than a total of 180 weeks compensation, the amount specified in R.C.M.1947, § 92-709, for the loss of the right foot below the ankle.
In the Becktold case we very carefully pointed out that: “When other injuries are suffered in addition to those resulting in amputation, the specific injury statute would not provide the limitation of compensation if the additional injuries complained of were proven.”
In awarding the maximum 500 weeks of compensation, the district court found that the claimant Newman has heen rendered totally disabled by an injury which is permanent in character, and that he is totally incapacitated from obtaining remunerative employment on account of an accidental injury suffered by him and arising out of and in the course of his employment by Fred Kamp on March 20, 1959.
Does the evidence clearly preponderate against this finding ? We think not. In the first place claimant’s foot was not amputated, and, although one doctor testified that he would not hesitate to perform an amputation, he admitted that there would be a certain amount of clinical risk in view of the fact that the claimant is a diabetic and had recently suffered a heart attack. We think there is substantial evidence in the record to support a finding that claimant has suffered additional injuries thereby taking this case out of the limitation enunciated in the Becktold decision.
Finding no reversible error, the judgment of the district court is affirmed.
MR. JUSTICES ADAIR, CASTLES and JOHN C. HARRISON concur.
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MR. JUSTICE HAS WELL
delivered the Opinion of the Court.
This is an appeal from a judgment entered in the district court, Lake County, in an automobile accident damage suit. Plaintiff Dean A. Rude was the driver of a Chevrolet involved in a collision with a Ford driven by defendant James Neal, in which the owner defendant William Kerr was a front seat passenger.
The accident occurred about 6:40 p.m„ September 16, 1970, in front of Sam White’s Bar on U.S. 12 near Elliston, Montana. Rude was driving east toward Helena when the westbound Ford driven by Neal made a left turn across the highway to enter the private driveway at the bar. Rude applied his brakes, but was unable to avoid the collision. All three parties were injured in the accident.
Rude filed a complaint, alleging the negligence of Neal and imputing that negligence to Neal’s passenger Kerr on the basis of joint venture. The complaint also charged Kerr with negligence on his own part. Kerr crossclaimed against Neal, alleging gross negligence and counterclaimed against Rule alleging negligence on his part. The jury returned a verdict awarding $10,000 to Rude in his claim against Neal and Kerr. The jury denied Kerr’s claims and, in response to special interrogatories, found that:
1. Neal was negligent and his negligence was the proximate cause of the accident.
2. Neal was neither grossly negligent nor guilty of willful, wanton, or reckless conduct.
3. Rude was not negligent.
4. Kerr was negligent and his own negligence was the proximate cause of his own injuries.
5. Neal and Kerr were engaged in a joint venture at the time of the accident.
Neal and Kerr appeal from, the combined judgment and the district court’s denial of their motions for judgment notwithstanding the verdict or a new trial. The issues raised by Neal will be considered first. They are:
1. Did the district court err in instructing the jury on Montana law prohibiting driving on the left side of the road in a no-passing zone or when approaching the crest of a grade?
2. Did the district court err in admitting opinion testimony as to the speed of the vehicles and the cause of the accident?
Although Neal also presents argument on the issue of joint venture, he admits not being prejudiced by that alleged error. We therefore will consider that issue when we discuss Kerr’s appeal.
Neal does not suggest that the instructions complained of are an incorrect statement of the law. It is apparent that they merely set forth the requirements of sections 32-2156 (a) (1) and 32-2157, R.C.M.1947. Neal argues, however, that those statutes do not apply to left turn situations. He contends that giving those instructions, combined with giving an instruction making statutory violations negligence as a matter of law, amounts to a directed verdict on the issue of Neal’s negligence.
Section 32-2156, R.C.M.1947, provides, in pertinent part:
“(a) No vehicle shall at any time be driven to the left side of the roadway under the following conditions:
“1. When approaching the crest of a grade or upon a curve in the highway where the driver’s view is obstructed within such distance as to create a hazard in the event another vehicle might approach from the opposite direction * *
Section 32-2157, R.C.M.1947, as amended by Secction 1, Chapter 97, Laws of Montana, 1957, and in effect at the time of this accident, provided:
“(a) The commission is hereby authorized to determine those portions of any highway where overtaking and passing or driving to the left of the roadway would be especially hazardous and may by appropriate signs or markings on the roadway indicate the beginning and end of such zones and when such signs or markings are in place and clearly visible to an ordinarily observant person every driver of a vehicle shall obey the directions thereof.
“ (b) Where signs or markings are in place to define a no-passing zone as set forth in paragraph (a) no driver shall at any time drive on the left side of the roadway within such no-passing zone or on the left side of any pavement striping designed to mark such no-passing zone throughout its length.”
Both statutes provide that, under certain circumstances, no vehicle shall be driven on the left side of the road “at any time.” Here, Neal turned left in a no-passing zone within 500 feet of the crest of a hill. However, we are not persuaded that these statutes apply.
In Wilburn v. Simons, 302 Ky. 752, 196 S.W.2d 356, 358, the Kentucky court dealt with statutory provisions virtually identical to section 32-2156, R.C.M.1947. In applying their statute, the court said:
“* * * It is the duty of a car driver to keep off the left side of a highway when he approaches the crest of a hill. KRS 189.340. While this does not mean that a driver could not turn left to enter a driveway just in front of the crest of a hill, yet it does mean, we think, that a driver should necessarily exercise care under these circumstances and turn at a reasonably safe angle. * * *”
In Green v. Boney, 233 S.C. 49, 103 S.E.2d 732, 66 A.L.R.2d 1370, the South Carolina court was called upon to apply a statute similar to section 32-2157, R.C.M.1747. The court held that it was not' always negligence to turn left across a yellow barrier line for the purpose of entering a private driveway, but depended upon the circumstances of each case. While Rude has urged that we not follow this rationale, he has cited'no Cases holding that similar statutes prohibit left turns.'
■ In 1957, the Montana legislature amended section 32-2157, R.C.M.1947, adding the second paragraph as it appears in the .section quoted above. Sec. 1, Ch. 97, L.1957. The title of that act is: •
“An Act to Amend [Section 32-2157, R.C.M.1947] by Prohibiting Passing Over Pavement Stripping Designating No-Passing Zones * * (Bracketed words and emphasis supplied) .
' The legislature’s intent to prohibit passing is further evidenced by the positioning of this section with others dealing with overtaking and passing. (Sections 32-2153 through 32-2157, R.C.M.1947). Statutes governing left turns are grouped .together elsewhere in that chapter. (Sections 32-2164 through 32-2167, R.C.M.1947). Furthermore, the very phrase “no-passing zone” suggests a prohibition of passing, not turning.
• [1] The section governing Neal’s left turn here is section 32-2167, R.C.M.1947. In Sumner v. Amacher, 150 Mont. 544, 437 P.2d 630, we recognized that this statute governed a left turn made in a no-passing zone, although the issues raised there were not the same as in the instant case. Here the district court did give an instruction based on section 32-2167, R.C.M. 1947, but erred in also giving the two instructions covering driving on the left side of the roadway. When combined with the instruction that statutory violations are negligence as a matter of law, the error was clearly prejudicial. McDonough v. Smith, 86 Mont. 545, 284 P. 542; 13 Blashfield, Automobile Law and Practice, 3rd Ed., § 463.3.
• [2, 3] Neal also contends the district court erred in allowing Sgt. Dale Hanson of the Montana Highway Patrol to express his opinion as to the speed of the vehicles and the cause of the accident. The challenge is not to Sgt. Hanson’s expert qualifications, but to the alleged insufficiency of the evidence upon which he based those opinions.
Sgt. Hanson was the investigating officer, arriving at the scene approximately one half hour after the accident took place. He observed the road and weather conditions, measured the skid marks, viewed the damage done to the vehicles, questioned witnesses at the scene and the parties later. Based on this evidence and charts which he had been trained to use, he estimated that Rude was traveling at approximately fifty miles per hour before be applied his brakes. He concluded that Neal was traveling at approximately twenty-five miles per hour when he began his left turn. He also testified that in his opinion speed was not a factor in this accident, but that it had been caused by Neal’s failure to observe oncoming traffic and his failure to yield right of way.
The preceding paragraph is only a summary of the rather extended testimony of the officer. On the basis of the entire transcript, we find that Sgt. Hanson was properly qualified as an expert, and was in possession of sufficient facts to warrant the conclusions which he stated. As this Court recently noted in Pachek v. Norton Concrete Co., 160 Mont. 16, 499 P.2d 766, expert opinion evidence is admissible in explaining the cause • of a particular accident. The district court did not err in admitting it here.
Kerr, the passenger in Neal’s vehicle, also appeals. He alleges the following errors:
1. The district court erred in instructing the jury on the law of joint venture.
2. The district court erred in instructing the jury that a passenger’s failure to warn his driver of imminent danger can be contributory negligence in an action against that driver.
3. There was insufficient evidence to support a finding of Kerr’s contributory négligence.
The challenge to the instruction on joint vénture is not that it is an incorrect statement of the law, but that there was insufficient evidence to present the issue to the jury. The elements which must be present before joint venture can be found have been succinctly stated in Sumner v. Amacher, 150 Mont. 544, 554, 437 P.2d 630, 635, where the Court stated:
“The elements which are essential to a joint venture are # * *. (]_) an agreement, express or implied among the members of the group; (2). a common purpose to be.carried out by the group.; (3) a community of pecuniary interest in that purpose among the members; and (4) an equal right to a voice in the direction of the enterprise, which gives an equal right of control.”
See also Rae v. Cameron, 112 Mont. 159, 114 P.2d 1060; Restatement, Torts 2d, § 491, Comment (c).
Although Neal would have benefited by a finding of joint venture, both by having his codefendant share the burden of a possible judgment and by using it as a defense against Kerr’s crossclaim, Neal testified there was no joint, venture. Kerr testified there was no joint venture.
Both Neal and Kerr denied any common purpose or community of pecuniary interest in the trip which ended in the collision. The only agreement expressed was that Kerr agreed to ride along to “get away from my [Kerr’s] business for a day and enjoy the outing”. The only evidence introduced which even remotely suggests a community of pecuniary interest was that on at least one previous occasion, Kerr had traveled to a construction site to see the type of use the contractor would make of trucks rented from Kerr. Although counsel for Rude made valiant efforts to elicit further information from Neal, Kerr, and business associates of Kerr, there is simply no substantial evidence supporting a common purpose or community of pecuniary interest. Accordingly, we hold that there was insufficient evidence, as a matter of law, to submit the issue of joint venture to the jury. McDonough v. Smith, 86 Mont. 545, 284 P. 542; 13 Blashfield, Automobile Law and Practice 3d Ed., § 463.3.
Finally, we consider Kerr’s claim of error in the instructions on the question of Kerr’s contributory negligence and the sufficiency of the evidence to support a finding of contributory negligence. Although the district court did err in its instructions on driving on the left side of the road and on joint venture, that error did not taint the jury’s findings that Rude was not negligent and Neal was not grossly negligent. Thus Kerr cannot recover on his counterclaim against Rude in any event. Likewise, Kerr cannot recover against his host, Neal, because the jury found that Neal was not grossly negligent or reckless in his operation of the Ford under Montana’s guest passenger statute. Section 32-1113, R.C.M.1947. This bars any recovery by Kerr against Neal, irrespective of Kerr’s freedom from negligence.
We affirm the judgments in favor of Rude and Neal respectively on Kerr’s counterclaim and crossclaim. We dismiss Rude’s claim against Kerr. We vacate the judgment of Rude against Neal and remand that claim to the district court for a new trial.
MR. CHIEF JUSTICE JAMES T. HARRISON' and MR.' JUSTICES DALY and JOHN C. HARRISON, concur.
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MR. JUSTICE GULBRANDSON
delivered the Opinion of the Court.
Hunts appeal from an order granting plaintiff Edgar’s motion for summary judgment by the District Court, Third Judicial District, Granite County in this quiet title action. Hunts contend that adequate consideration supported the repurchase option and that the option did not violate either the rule against perpetuities or the rule against restraints on alienation. We reverse and remand for trial.
On August 13, 1964, the Hunts sold the subject real property by warranty deed to Alma and Omer Edgar in joint tenancy. Apparently, the parties entered into a notarized agreement contemporaneously with the execution of the deed. Under this agreement, Edgars had the right to use sewer facilities on Hunts’ land and to take water from a well on the adjacent Hunt land. The agreement also stated:
“Whereas, said real property was sold to First Parties [Edgars] by Second Parties [Hunts] with the understanding that Second Parties [Hunts] would have first option to purchase said property should First Parties [Edgars] desire to sell said property in their respective lifetimes;
“That should First Parties [Edgars] sell said real property, Second Parties [Hunts] are hereby granted an option to repurchase said premises for the sum of Seven Thousand dollars ($7,000.00); provided always that First Parties [Edgars] shall give to Second Parties [Hunts] thirty (30) days written notice of their intention to sell said premises, and that Second Parties [Hunts] shall before the expiration of said thirty (30) day period have the right to repurchase said premises for the sum of Seven Thousand Dollars ($7,000.00) cash.
Thereafter, Omer Edgar died, terminating the joint tenancy. His widow, Alma Edgar, now the sole owner of the property, on June 13, 1984, brought this quiet title action to invalidate the option agreement. After the Hunts answered her request for admissions, she filed a motion for summary judgment contending; (1) that there was no consideration for the repurchase option; and (2) that the repurchase option violated section 70-1-405, MCA and is thus invalid.
On January 29, 1985, the court granted Alma Edgar’s motion for summary judgment. The court ruled that there was no consideration to support the option, and secondly, that it was a condition restraining alienation, and therefore void. On February 5, 1985, the District Court entered judgment quieting title to the property. From this order and judgment Hunts appeal, raising the following issues:
(1) Whether the District Court properly granted summary judgment holding that there was no consideration supporting the repurchase agreement.
(2) Whether the District Court properly granted summary judgment holding that the repurchase agreement was invalid because it violated the rule against restraints on alienation, or the rule against perpetuities.
As to the first issue, the District Court erred in holding the agreement unenforceable for a lack of mutual consideration. The court’s order reasoned “[i]t is obvious from reading the preamble to the mutual agreement that any consideration was to be paid by the Edgars to the Hunts and not vice versa.” In this respect, the court failed to construe the contract according to section 28-3-202, MCA, which requires that “[t]he whole of a contract is to be taken together so as to give effect to every part if reasonably practicable, each clause helping to interpret the other.” The agreement, read in its entirety, set up obligations running both ways. The Hunts were to provide the Edgars with water and access to their sewer facility. In return, the Edgars paid a nominal consideration of one dollar “and other valuable consideration,” agreed to help maintain the sewer and water facilities, and granted to the Hunts the repurchase option. Further, this Court has ruled that even nominal consideration is adequate to support an option contract. Van Atta v. Schillinger (Mont. 1981), 625 P.2d 73, 38 St.Rep. 426; Keaster v. Bozik (Mont. 1981), 623 P.2d 1376, 38 St.Rep. 194. We hold that the repurchase agreement was supported by adequate consideration as part of the original contract to purchase.
The District Court erred in holding that the pre-emptive right held by the Hunts was void as a matter of law and in granting summary judgment on that ground. The court correctly noted that the rule against perpetuities, Section 70-1-407, 408, MCA, did not apply to the fixed price pre-emptive right at issue. In re Murphy’s Estate (1935), 99 Mont. 114, 43 P.2d 233. The error was in interpreting section 70-1-405, MCA, as an absolute prohibition against any restraint on the alienation of real property. That section states: “Conditions restraining alienation, when repugnant to the interest created, are void.” (Emphasis added.) This Court reads that provision as a statement of the majority common law rule that restraints on alienation, when reasonable, are valid. Lawson v. Redmoor Co. (1984), 37 Wash.App. 351,] 679 P.2d 972. 61 AmJur.2d, Perpetuities Section 121, p. 129 (1981). The question is whether the particular restraint is reasonable under the circumstances. Lawson, 679 P.2d at 974.
The Restatement of Property, in section 406, comment “i”, sets forth various factors that may be considered when determining the reasonableness of any particular restraint. In addition to the Restatement factors, case law has articulated two others to be considered when determining reasonableness. The type of price set is important. If the price is fixed and greatly disproportionate to the market value of the property, this supports a finding of unreasonableness. Ross v. Poneman (1970), 109 N.J. Super. 363, 263 A.2d 195, 199; Iglehart v. Phillips (Fla.1980), 383 So.2d 610, 614, 615. Secondly, the intent of the parties contracting for the preemptive right is a factor. If, from the circumstances, it appears that particular restraint, or the price set thereby, is primarily for the purpose of restraining the alienability of the property, it will weigh heavily against the validity of the restraint. On the other hand, if the circumstances suggest that the restraint was freely entered into by mutual consent as a normal incident of an equal bargaining relationship in order to promote the original transfer of the property, the scales will tip back towards the reasonableness of the restraint, see Lawson, 679 P.2d at 974-975. We hold that the repurchase option did not violate the rule against restraints on alienation.
Respondent contends that this Court should follow the California Court of Appeals decision in Wharton v. Mollinet (1951), 103 Cal.App.2d 710, 229 P.2d 861. In Wharton, the California court interpreted section 711 of the California Civil Code, which Montana adopted as Section 70-1-405, MCA, as an absolute rule against any restraint on the alienation of property. Wharton, 229 P.2d at 863. Respondent contends this Court is bound to follow the Wharton rule because of our holding in State v. Murphy (1977), 174 Mont. 307, 570 P.2d 1103, that:
“Montana follows the rule of statutory construction where in adopting a statute from a sister state, the court adopts the construction placed upon it by the highest court of the state from which it was adopted.”
Murphy, 570 P.2d at 1105.
Though we recognize the continuing validity of the rule in Murphy, it does not require this Court to adopt the rule in Wharton in this case. First, Section 70-1-405 was adopted in 1895, prior to the Wharton holding. Second, Wharton was not decided by the “highest court” of California. Thirdly, Wharton appears to be no longer followed in California, see Budny v. Bank of America (1959), 167 Cal.App.2d 1, 333 P.2d 812; Wogman v. Wells Fargo Bank and Union Trust Co. (1954), 123 Cal.App.2d 657, 267 P.2d 423, 428.
The order of the District Court granting summary judgment to the plaintiff is reversed, and this case is remanded.
MR. CHIEF JUSTICE TURNAGE and MR. JUSTICES SHEEHY, WEBER and MORRISON concur.
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On December 8,1992, the Defendant was sentenced to ten (10) years for Negligent Homicide. As a condition of defendant’s parole, he shall pay restitution for all medical and funeral expenses for the victim of his crime.
On March 12, 1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and was represented by Leo Gallagher, Attorney from Helena, Montana. The state was represented by Mike McGrath, County Attorney from Helena, Montana.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, there was a split decision by the Sentence Review Division. The sentence shall be affirmed as originally imposed.
The reason for the decision is the sentence imposed by the District Court is presumed correct pursuant to Section 46-18-904(3), MCA. The Division finds that the reasons advanced for modification are insufficient to deem inadequate or excessive as required to overcome the presumption per Rule 17 of the Rules of the Sentence Review Division of the Montana Supreme Court.
Hon. Thomas McKittrick, Chairman, and Hon. John Warner
DISSENT: THE HONORABLE JAMES PURCELL DISSENTS. Judge Purcell would have changed the non-dangerous designation to dangerous designation. Based upon the Pre-sentence Investigation Report which indicates there may have been sexual violence connected with the victim in this case as well as reports of the investigator from other persons who he admittedly was associated with. Under 46-18-404(l)(b), MCA, Judge Purcell considers that the Pre-sentence Investigative Report and the evidence certainly represents that this person is a substantial danger to other persons and society. The fact that when the Defendant was asked by the Court, he appeared to be cold and calculating, in regards to the answers about the sexual references made in the Pre-sentence Report.
The Sentence Review Board wishes to thank Leo Gallagher, Attorney from Helena for his assistance to the defendant and to this Court. The Board also wishes to thank Mike McGrath for appearing on behalf of the State of Montana.
|
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JUSTICE TRIEWEILER
delivered the opinion of the Court.
Plaintiff appeals from the judgment entered in the District Court, Eleventh Judicial District, Flathead County, holding that the State of Montana was not liable for the injuries to the plaintiff. We affirm in part and reverse in part.
The issues on appeal are:
1. Whether the District Court erred in limiting testimony of the plaintiff’s accident reconstruction expert.
2. Whether the District Court erred in permitting defense counsel to question witnesses regarding the availability of medical and rehabilitation services by the Veterans Administration, in light of the order in hmine prohibiting collateral source evidence.
On February 5, 1980, Lyle Thomsen was driving from Whitefish to Kalispell. Thomsen entered a section known as the LaSalle Road, which was under construction. After traveling southbound on the road for approximately one-half mile, Thomsen’s vehicle began to leave the road, so that the right tires were about three feet right of the fog line or edge line. The ditch adjoining the road had flooded and frozen. At that point, the right tires were riding on the ice. The ice gave way, and as Thomsen attempted to regain the road, his vehicle went into a 180 degree spin, crossed the centerline, and was struck from behind by an oncoming vehicle. Thomsen suffered multiple injuries, including permanent brain injury.
On January 28, 1983, Thomsen filed suit against the State of Montana, Flathead County, and McIntyre Construction Company — the company in charge of the highway reconstruction. Flathead County was subsequently granted summary judgment on April 13, 1990. Trial commenced on June 14,1990. The jury returned a special verdict, finding that (1) McIntyre Construction was not negligent; and (2) that the State of Montana was negligent, but that its negligence did not cause plaintiff’s damages. Thomsen appeals from that judgment.
Thomsen asserts that the District Court erred in handling the testimony of his accident reconstruction expert. Thomsen maintains that the expert, a physics professor at Montana State University, was precluded from explaining fundamental laws of physics, and was not allowed to give his opinion on the angle of the tires on Thomsen’s vehicle at the time they broke through the ice. The scope of expert testimony and the trial court’s role in regulating it is governed by Rule 702 of the Montana Rules of Evidence. Rule 702 provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.
This Court has stated that the trial court is granted wide discretion in determining whether to admit expert testimony. Simonson v. White (1986), 220 Mont. 14, 713 P.2d 983. Further, the court may, in its discretion, limit the scope of expert testimony. Lindberg v. Leatham Bros., Inc. (1985), 215 Mont. 11, 693 P.2d 1234. Accordingly, we find no error in the court’s determination regarding these aspects of the expert testimony.
Thomsen further asserts that his expert was prevented from testifying to standards contained in the American Association of State Highway Transportation Officials’ manual, entitled Highway Design and Operational Practices Related to Highway Safety, despite the fact that compliance with current AASHTO manuals" was a requirement of the construction contract between the State and McIntyre. However, the record discloses that plaintiff was unable to provide foundation for introduction of the manual, due to questions about whether it was in effect at the time of the accident. After a subsequent offer of proof, the court ruled that the expert could be recalled to lay addi tional foundation. Plaintiff failed to recall his expert witness. Therefore, the District Court did not abuse its discretion by rejecting the offered evidence.
Thomsen next contends that the court erred in allowing questions concerning collateral sources, in direct contravention of plaintiff’s motion in limine. In spite of the motion and subsequent objection, three separate witnesses were allowed to respond to questions regarding the availability of medical and rehabilitation services by the Veterans Administration. Thomsen claims that the main thrust of the questioning was to suggest to the jury that insurance coverage existed, and that any probative value was clearly outweighed by the possibility of unfair prejudice.
We agree with the plaintiff. Plaintiff’s motion in limine, granted before commencement of trial, sought to exclude, among other things, any testimony, evidence, or comment that any remuneration was received by Mr. Thomsen from a collateral source, or that he may have had medical insurance. When counsel for McIntyre Construction first delved into the matter of VA benefits, Thomsen objected. On three separate occasions, the court allowed the questioning which established the availability of VA benefits.
Courts have long recognized the strong likelihood of prejudice resulting from the introduction of collateral source evidence. Montana recognized the doctrine in Goggans v. Winkley (1972), 159 Mont. 85, 92, 495 P.2d 594, 598, wherein this Court stated that “[ijnjection of collateral matters involving transactions between others ... is collateral inadmissable evidence under the collateral source doctrine.”
Other courts have further expounded on the doctrine. In Hrnjak v. Graymar, Inc. (Cal. 1971), 484 P.2d 599, 604, the California Supreme Court stated:
The potentially prejudicial impact of evidence that a personal injury plaintiff received collateral insurance payments varies little from case to case. Even with cautionary instructions, there is substantial danger that the jurors will take the evidence into account in assessing the damages to be awarded to an injured plaintiff. Thus, introduction of the evidence on a limited admissibility theory creates the danger of circumventing the salutary policies underlying the collateral source rule. Admission despite such ominous potential should be permitted only upon such persuasive showing that the evidence sought to be introduced is of substantial probative value.
The Alaska Supreme Court has recognized the doctrine’s importance to a greater extent. In Tolan v. ERA Helicopters, Inc. (Alaska 1985), 699 P.2d 1265, 1267, the court stated:
[The doctrine] also has an evidentiary role, excluding evidence of other compensation on the theory that such evidence would affect the jury’s judgment unfavorably to the plaintiff on the issues of liability and damages. [Emphasis added.]
Defendants contend that the evidence was harmless because the jury found that the State’s negligence was not the proximate cause of plaintiff’s damages. As the court in Tolan stated, introduction of collateral source evidence may be much more damaging to a plaintiff’s case than just affecting the jury’s judgment regarding damages. We agree with the Tolan court’s recognition that such evidence can have an impact upon a jury’s verdict on the issue of liability, as well as damages. We conclude that the District Court erred in allowing the admission of collateral source evidence, and that such error is reversible.
Accordingly, the judgment in favor of the State of Montana is reversed and this cause remanded for a new trial consistent with this opinion.
CHIEF JUSTICE TURNAGE and JUSTICES HARRISON, HUNT, McDONOUGH, GRAY and WEBER concur.
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MR. JUSTICE SHEEHY
delivered the opinion of the Court.
This is an appeal by the father of three minor children from the amended findings of fact, conclusions of law and decree of dissolution entered by the Powell County District Court on October 13, 1977, concerning custody of the children and distribution of the marital property. No issue is taken to the granting of the divorce.
The parties were married on November 7, 1953. As a result of this marriage, six children were born. Three of those children were still minors at the time of the action for divorce. The minor children are: Shelly Susan Kramer, age 15; Vicki Joyce Kramer, age 13, and, Joie Allen Kramer, age 11.
The father filed a petition for dissolution of marriage on March 23, 1977. In the petition he stated that both parties were fit and proper persons to have custody of the children but the best interest of the children would be served by awarding custody to him.
On April 7, 1977, the mother filed a counterpetition for dissolution of marriage. In her petition, she denied the fitness of the father to have custody and sought custody of the children herself. She filed a motion for temporary child support during the pendency of the divorce action. She further requested that the court enter a restraining order against the father to keep him from distrubing her. The District Court signed a temporary child support order of $275 per month on April 7, 1977, and granted the mother’s request for restraining order against the father.
On June 15, 1977, the mother filed a motion and affidavit seeking to have the father placed in contempt of court for failing to comply with the court’s order on temporary child support. The District Court ordered that a show cause hearing be held on the mother’s motion. This hearing was held on June 24, 1977. On that date, the father filed a motion to quash the order to show cause which the court overruled pro forma. At the conclusion of the hearing, the court took the matter under advisement.
The divorce action was brought to trial on July 1, 1977. Upon the request of the mother, the court appointed attorney David Scott, Esq. to represent the children in the divorce proceedings, with respect to the custody issue. However, Scott was not present during any state of the July hearing. The court also ordered an investigation be conducted by the Powell County Welfare Department concerning custodial arrangements for the minor children. This order was consented to and concurred in by the parties. At the conclusion of the hearing, the parties agreed the welfare report would be used in preparing proposed findings of fact and conclusions of law for the court.
The report by the Welfare Department was submitted to the court and sent to respective counsel on July 19, 1977. In that report, the investigator recommended custody of the three minor children be awarded to the father. On August 5, 1977, the mother filed a motion to exclude the welfare report from consideration as evidence because of its hearsay nature. Hearing was held on this motion on August 15, 1977. At this hearing the court ordered the report excluded, but allowed the father to reopen his case for the testimony of the investigator who prepared the report. However, when the investigator was testifying the court limited her testimony to expressing an opinion as to the proper custodian based on her observation of the conditions in the respective homes and her conversations with the parties only, not with others she may have interviewed. She testified that in her opinion custody should be awarded to the father.
The court, after hearing the testimony of the investigator, interviewed each one of the minor children individually in chambers with counsel for the respective parties and a court reporter present. Appointed counsel for the children was not present during the interviews of the children or the testimony of the investigator. In the interviews, two of the children Shelly and Joie, when asked by the court whom they wanted to live with, expressed a desire to live with their father. The third child, Joyce, stated she did not care which one of her parents she lived with.
On August 25, 1977, the District Court entered findings of fact, conclusions of law and decree of dissolution. The court found that the best interests of the children would be served by awarding custody to their mother. The court found the net worth of the parties, less their liabilities, was $63,714.00 It further found that in the first six months of 1977 the father earned $15,000 as a carpenter and building contractor and the mother earned $350 per month as a postal employee.
In its decree the court ordered the mother be awarded the family home valued at approximately $39,500 and all of the furniture and equipment in the home; that the father be required to make the payments on the mortgage of approximately $10,000 still owing on the home; that when the debt on the home is liquidated and all of the.children reach the age of majority, the home should be sold and the proceeds, along with the personal property then remaining in the home be divided equally between the parties; that the husband be awarded the 1975 (3/4 ton) Ford truck and the wife the 1976 Ford Granada with any indebtedness on it to be paid by the husband; that the husband pay $300 per month child support ($100 per child per month) and, for 15 years $250 per month alimony; and, that the husband pay the wife’s reasonable attorney fees. The court also entered an order quashing the earlier order to show cause for contempt, but the father was ordered to pay $ 1,250 for arrearages in child support payments.
On September 12, 1977, the father filed a motion for new trial, to set aside and vacate final judgment, for relief from the judgment and for stay of execution. Affidavits by Shelly and Joie Kramer were filed, which again expressed their desire to live with their father. Hearing was held on the father’s motion on September 23, 1977. Counsel for the children was present at this hearing. On October 13, 1977, the court denied the relief requested by the father. However, the court did amend its original findings in regard to the distribution of property and the payment of alimony. In the amended findings, the mother was awarded the salvage check for the 1976 Ford Granada, because the car was repossesed. The court amended the alimony award by not having it commence immediately, but gradually as each child reaches the age of majority. It is from these amended findings, conclusions, and decree that the father appeals.
After filing his notice of appeal on November 10, 1977, the father petitioned this Court for a writ of supervisory control. We denied him the relief requested.
In December 1977, while this appeal was pending, the mother sought enforcement of the District Court’s decree on custody fo the children, child support and the distribution of the marital property. To obtain enforcement of the decree, the mother petitioned this Court for a writ of habeas corpus. We denied her the relief requested saying that enforcement of the judgment could be obtained in the lower court while the judgment is on appeal. Kramer v. Kramer (1978), 176 Mont. 362, 578 P.2d 317, (Decided May 11, 1978.)
The father in his appeal from the judgment of the District Court raises three issues, they are:
1. Whether the trial court erred in this distribution of the marital property?
2. Whether the trial court abused its discretion in awarding custody of the minor children to their mother.?
3. Whether there were irregularities in the proceedings in the District Court that denied the father and the three minor children a fair trial on the issue of custody?
As to the firts issue, the husband argues the court abused its discretion in its distribution of the marital property. He maintains that the court failed to divide the property equitably because the wife received a greater share.
“It is well settled in Montana that a district court has far reaching discretion in resolving property divisions and its judgment will not be altered unless a clear abuse of discretion is shown. Eschenburg v. Eschenburg, (1976), 171 Mont. 247, 557 P.2d 1014, 1016. The criteria for reviewing the district court’s discretion is: Did the district court in the exercise of its discretion act arbitrarily without employment of conscientious judgment, or exceed the bounds of reason in view of all the circumstances. Berthiaume v. Berthiaume, (1977), 173 Mont. 421, 567 P.2d 1388” Zell v. Zell, (1977), 174 Mont. 216, 570 P.2d 33, 35.
Applying that standard to this case, we believe the District Court did abuse it discretion in its discretion of the marital property.
An examination of the property division ordered by the court reveals the wife received the greater share of the property. She received the family home, which has an appraised value of $39,000, plus the value of the personal property in the home and all awarded to her. This asset and the personal property was to be divided equally when the children reached the age of majority. However, in the meantime, the husband was to liquidate the debt on the property, maintain the property, and pay all the taxes and insurance on the property. In addition, he was ordered to pay child support and eventually, as the children became of age, to pay alimony to the wife. The only property awarded to the husband was the 1975 Ford truck.
We feel this division of the property was not equitable. The court abused its discretion in dividing the property in this manner. Berthiaume v. Berthiaume (1977), 173 Mont. 421, 567 P.2d 1388. Therefore, the findings and conclusions of the trial court concerning the distribution of the property must be reversed and a new trial held on that issue:
In a new trial on this issue, the court must determine the net worth of the parties at the time of the divorce. Downs v. Downs (1976), 170 Mont. 151, 551 P.2d 1025. In its original findings, the trial court determined the new worth of the parties to be $63,714.00. The court arrived at this figure on the basis of the wife’s Exhibit B, which was a financial statement of the parties dated December 12, 1975. The court erred in admitting this document into evidence and using it to determine the parties’ net worth, because the exhibit was too remote in time to be of any probative value concerning the net worth of the parties at the time of the divorce and there had been changes in the financial circumstances of the husband since that date. In a new trial on the distribution of the property, if a financial statement is to be used to establish the net worth, then it must be one that was prepared at or near the time of the divorce to show the present applicable finances of the parties.
We have reversed the distribution of the property ordered by the trial court therefore we must also reverse the court’s alimony award-to the wife, because the needs of a spouse as to alimony and the reasonableness of such an award.can only be properly determined after there has been an equitable division of the marital estate. In re Marriage of Johnsrud (1977), 175 Mont. 117, 572 P.2d 902. There not being an equitable division of the marital estate, we reverse the alimony award entered by the court.
The second and third issues involve the court’s determination of custody of the children. The father argues the court abused its discretion in awarding custody of the children to the mother. The mother contends the custody award was proper in that the evidence shows the father is not fit to have custody. The father also argues the court erred in excluding the report of the investigation by the welfare department and in hearing the child custody issue without the presence of the children’s attorney. The mother maintains the' court did not commit any error in its handling of the proceedings on custody.
The thrüst of the father’s argument in regard to the court’s award of custody is that it ignored the requirements of section 58-332, R.C.M.1947, in determining the best interests of the children. He points out that, under this section, the court must consider the wishes of the children as to their custodian. Section 48-332(2), R.C.M.1947. He asserts the court ignored the wishes of the children to live with him in giving custody to the mother. We agree. We believe the court did abuse its discretion in granting custody to the mother.
Our examination of the record reveals the children wanted to live with their father and made their wishes known to the court on three separate occasions. The first occasion was an interview with counsel for the father in the chambers of the court, with a court reporter present. The minutes of this interview were made a part of the record. In this interview, the children all stated they wanted to be with their father. The second occasion was when the court interviewed the children in chambers with counsel for both parties present; two of the children expressed their desire to live with their father, the third child had no preference between her parents. The third occasion was on the motion for new trial. At that time, the court was presented with the affidavits of the children and heard the testimony of one of them. Again, the court was told the children wanted to live with their father.
In its findings of fact, the court makes no memtion of the desires of the children as to a custodian. In its October 13 “OPINION OF THE COURT ON MOTION FOR NEW TRIAL” the court stated: “* * * the children, * * *, were under patental pressure when making their affidavits and when one of them was testifying on the motion.” It is not clear to us how the court arrived at such a conclusion. The record shows the children when asked if they were being pressured by either parent, denied any pressure was being put to bear on them by their father or their mother.
We are committed to the view that the welfare of the children is the paramount consideration in awarding custody. Lee v. Gebhardt (1977), 173 Mont. 305, 567 P.2d 466; Schiele v. Sager (1977), 174 Mont. 533, 571 P.2d 1142. We believe the welfare of the children, particularly children of the ages involved here, is not being served if their wishes are-not considered by the trial court. Therefore, we hold the court should make a specific finding, stating the wishes of the children as to their custodian, and, if the court determines that the children’s wishes are not to be followed, the court should state in its findings the reason it has chosen not to follow thier wishes.
We also agree with the father that there were irregularities in the proceedings that denied him and the children a fair trial on the issue of custody. Since these matters will come up in a new trial on custody, we will prove some guidance to the trial court as to procedure.
We believe that the court erred in excluding as evidence the report of the investigation by the Powell County Department of Welfare, concerning the custodial arrangements for the children. Further the court erred in limiting the testimony of the investigator who prepared the report. Such investigations and reports on custody are authorized by section 48-335, R.C.M.1947. It provides:
“(1) In contested custody proceedings, and in other custody proceedings if a parent of the child’s custodian so requests, the court may order an investigation and report concerning custodial arrangements for the child. The investigation and report may be made by the county welfare department.
“(2) In preparing his report concerning a child, the investigator may consult any person who may have information about the child and his potential custodial arrangements. Upon order of the court, the investigator may refer the child to professional personnel for diagnosis. The investigator may consult with and obtain information from medical, psychiatric, or other expert persons who have served the child in the past withot obtaining the consent of the parent or the child’s custodian; but the child’s consent must be obtained if he has reached the age of sixteen (16) unless the court finds that he lacks mental capacity to consent. If the requirements of subsection (3) are fulfilled, the investigator’s report may be received in evidence at the hearing.
(3) The court shall mail the investigator’s report to counsel and to any party not represented by counsel at least (10) days prior to the hearing. The investigator shall make available to counsel and to any party not represented by counsel the investigator’s file of underlying data, and reports, complete texts of diagnostic reports made to the investigator pursuant to the provisions of subsection (2), and the names and addresses of all persons whom the investigator has consulted. Any party to the proceeding may call the investigator and any person whom he has consulted for cross-examination. A party may not waive his right of cross-examination prior to the hearing.
In this case, upon completion of the investigation and report, the mother moved to have it excluded as being hearsay evidence. We agree with her that the out-of-court statements of the investigator, contained in the report, are hearsay. Ronchetto v. Ronchetto (1977), 173 Mont. 285, 567 P.2d 456. However, as pointed out in Ronchetto, section 48-355(3), R.C.M.1947, provides a means of avoiding the hearsay problem. It establishes the requirements for the admission of such reports into evidence and provides that either party has the right to cross-examine the investigator and any person whom she has consulted. By complying with this section, there would be no violation of the hearsay rule. Therefore, we hold the report should be received into evidence under the conditions specified in section 48-355(2), (3), R.C.M.1947.
We also feel that the District Court erred in deciding the custody issue, when the appointed attorney for the children did not participate. Prior to the determination of this question, the children’s attorney was not present at any of the hearings. He was appointed by order of the court on July 1, 1977. The record shows that substantial evidence was presented at the hearing on that date concerning the best interest of the children. On August 15, 1977, the court conducted the interviews with the children. The children’s attorney was not present at either the hearing in July or the interviews. However, the court proceeded to determine the issue of custody in favor of the mother in August 1977. The attorney for the children was present at the hearing on the motion for new trial in September 1977. Even though he was present then and did question the witness, our examination of the record indicates he took no position as to which parent would serve the best interests of the children as their custodian.
In such case where custody is in serious dispute, the court has the power to appoint an attorney for the children to aid the court in reaching a decision on the issue. Section 48-324, R.C.M.1947. The purpose of this statute is to provide the children with an advocate who will represent thier interests and not the parents’ interest. This means the attorney is not to take a passive role in the hearing on custody. He should represent the children actively and present to the court all the evidence he can marshal concerning the best interests of the children.
The trial court’s decree is set aside except for the dissolution of the marriage and the cause is remanded for a new trial on the issue of the distribution of the marital property, support, and custody of the children in accord with this opinion.
MR. CHIEF JUSTICE HASWELL, MR. JUSTICES DALY, HARRISON and SHEA concur.
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On August 11,1992, the Defendant was sentenced to Count I, thirty (30) years, for Criminal Sale of Dangerous Drugs; Count II, fifteen (15) years for Criminal Possession of Dangerous Drugs With Intent to Sell; with eighteen (18) years to be suspended on Count and three (3) years to be suspended on Count II. Said time to be served concurrent to each other, and consecutive to the sentence for revocation handed down by Judge McNeil in Cause No. DC-99-102(B); plus conditions that the defendant shall follow for the suspended portion of his sentence as stated in the Judgment dated August 11, 1992. The Defendant shall be credited for 20 days time served.
On May 7,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and was represented by John Blavatsky, Legal Intern from the Montana Defender Project. The state was not represented.
DATED this 7th day of May, 1993.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to proceed.
After careful consideration, it is the unanimous decision of the Sentence Review Division that the sentence shall be amended to, Count I, fifteen (15) years, for Criminal Sale of Dangerous Drugs with five (5) years suspended; Count II, fifteen (15) years for Criminal Possession of Dangerous Drugs With Intent to Sell with five (5) years suspended; these two sentences are to be served concurrently with themselves, however, they will be served consecutive to any other sentence previously imposed. The conditions that the defendant shall follow for the suspended portion of his sentence as stated in the Judgment dated August 11,1992 by Judge Keedy shall be affirmed.
The reasons for the amended decision are;
(1) the amendment brings the sentence more in line with other sentences handed down across the state for similar crimes; and
(2) the amended sentence together with the fines imposed should adequately follow the intention of the State in this case.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
The Sentence Review Board wishes to thank John Blavatsky, Legal Intern from the Montana Defender Project for his assistance to the defendant and to this Court.
|
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MR. JUSTICE JOHN C. HARRISON
delivered the Opinion of the Court.
This is an appeal by the defendant, Koenig Brothers, Inc., from a judgment of the District Court for Flathead County, Montana, in an action brought by the plaintiff, F. M. Ben-tall, to recover on a promissory note.
The note reads:
“$5,000.00 Kalispell, Montana July 1, 1958. On Demand After date for value received we Promise to pay to the order of F. M. Bentall Five Thousand and no/100 Dollars In Lawful money of the United States Negotiable and payable at Portland, Oregon ivith interest before and after Maturity at the rate of 8 per cent, per annum from June 27, 1958, until paid. The makers and endorsers hereby waive presentment, demand, protest and notice thereof; and agree to pay reasonable attorney’s fees in case of a suit on this note.
“[Signed] KOENIG BROTHERS, INCORPORATED
“By Arne Poulsen
“President”
The complaint, which is in the ordinary form, declares the note, above-quoted, as the obligation of the defendant corporation and alleges that such note is long past due in that the plaintiff has demanded payment thereof many times but that the defendant corporation “refused, failed, neglected and continues to refuse, fail and neglect to pay the note or any part thereof. ’T The complaint further alleges that as a result of the aforesaid, there Avas and is now due and owing’ the plaintiff therefor, from the defendant corporation, the principal sum of $5,000.00, plus interest at the rate of eight per cent per annum from June 27, 1958, plus $674 as attorney’s fees, plus all the costs in the cause expended.
The answer admits that the note was executed and delivered to the plaintiff by Arne Poulsen, who was at that time president of the defendant corporation, but alleges that Poulsen had neither power nor authority to make or deliver the same for the corporation or to bind the corporation to the payment of such obligation; that such act by Poulsen was never ratified or approved by the defendant corporation or by its board of directors ; and that the defendant corporation at no time received any consideration from the plaintiff.
The evidence may be summarized as follows:
On July 1, 1958, Alvin F. Koenig and Gerald A. Koenig, owners of 600 of the 601 outstanding shares of stock in the defendant corporation, executed and delivered a written option to one Arne Poulsen whereby Poulsen was given the right to purchase all the shares of stock in the defendant corporation. Under the terms of the agreement, Poulsen, one R. W. Brenneke, and Alvin F. Koenig were given one share of stock each in the defendant corporation and the remaining shares thereof were endorsed by Alvin and Gerald Koenig and placed in escrow. Further, under the terms of the agreement, Poulsen was made president of the defendant corporation and was given the power to exercise “full management and control of the affairs of said corporation(Emphasis supplied.)
In October of 1958, Poulsen surrendered his rights to purchase under the option agreement and the control and the management of the defendant corporation were returned to and once again assumed by Alvin and Gerald Koenig.
The issues in this ease revolve around the stock option. The testimony on the preliminaries leading up to the execution of the agreement is as follows:
Arne Poulsen, testifying in behalf of the plaintiff, stated that Alvin and Gerald Koenig agreed to give him an option to purchase their stock in the defendant corporation if he would obtain a “loan” of $20,000 for the defendant corporation; that, though he contacted several possible lenders, he was unable to obtain such sum; that, on June 27, 1958, the plaintiff agreed to loan $10,000 — $5,000 to the defendant corporation and $5,000 to him (Poulsen) and one R. W. Brenneke jointly; that the $10,000 was acceptable to Alvin and Gerald Koenig and, on July 1, 1958, the option agreement was exe cutedpthat a promissory note for $5,000, which is the object of this suit, was prepared on July 1, 1958, and was made payable to the plaintiff and signed by him (Poulsen) as president of the defendant corporation; and that on July 1, 1958, another promissory note from him (Poulsen) and B. W. Brenneke to the plaintiff was prepared and delivered.
The record discloses that the plaintiff gave the $10,000 to Poulsen in the form of three cashier’s checks — one for $5,000, one for $4,000, and one for $1,000; that all three checks were made payable to Poulsen; and that Poulsen was to hold such checks until such time as the stock option could be executed.
At the trial, the plaintiff testified that on June 27, 1958, Arne Poulsen came to him for the purpose of obtaining a $10,-000 loan for the defendant corporation; that Poulsen did not at such time represent himself to be the president of the defendant corporation nor was there anything, prior to July 1, 1958, which indicated that Poulsen was president of the defendant corporation; that, on June 27, 1958, he gave Poulsen three cashier’s checks totaling $10,000; that such checks, although payable to Poulsen personally, represented a $5,000 loan directly to the defendant corporation and a $5,000 loan to Poulsen and B. W. Brenneke jointly; that the reason why he did not loan the defendant corporation the full $10,000 was “because of the financial position [of the defendant corporation] that I interpreted from the [financial] report, and I would go the $5,000 for the corporation but I would loan him [Poulsen] $5,000, to him personally, and they [Poulsen and B. W. Brenneke] could then, on their own, loan that to the corporation;” and that evidence of the indebtedness due him from the defendant corporation is a promissory note dated July 1, 1958, which bears interest from June 27, 1958, and which was signed by Poulsen as president of the defendant corporation.
Gerald A. Koenig, testifying in behalf of the defendant corporation, stated that he and his brother, Alvin, agreed to give Arne Poulsen an option to purchase their stock in the defend ant corporation if Ponlsen would bring $20,000 “into the corporation;” that when Poulsen was unable to raise such an amount, they agreed to and did in fact accept the sum of $10,000; that they would “not have gone through with the option” if Poulsen had not provided such sum; that such sum was consideration for the option agreement and was not, as Poulsen and the plaintiff contend, a “loan” to the defendant corporation; that, in the event the option was exercised, such sum was to be applied towards the purchase of their stock; and that in the event the option was not exercised, such sum was to be forfeited.
Other evidence relevant to the issues herein shows that B>. "W. Brenneke, Alvin F. Koenig, and Arne Poulsen were the directors of the defendant corporation at the time of the execution of the note in question; that no regular meeting of the board of directors was held to give formal authorization for the execution of such note; that Alvin F. Koenig and Arne Poulsen decided among themselves, in the absence of Brenneke, that Poulsen would execute the note in question; and that the one and only time Brenneke was present at a board of directors meeting was in August of 1958, a month after the execution of the note.
The only question necessary for this court to determine is whether the district court erred in finding implied authority in Arne Poulsen, as president of the defendant corporation, to execute the promissory note herein sued upon.
It is the defendant corporation’s contention that the note in question was executed and delivered by the president, Arne Poulsen, without having been so directed or authorized by any order or resolution of the corporation’s board of directors, and hence the authority for the execution and delivery thereof to the plaintiff must rest upon the evidence of the defendant corporation’s alleged ratification of those acts by the board of directors or upon such general authority as must be ascribed to the president of the corporation who signed the note.
In the instant case, the defendant corporation’s Articles of Incorporation provided for three members to act as directors of the corporation. At the time of the execution of the note in question, R. W. Brehneke, Alvin F. Koenig, and Arne Poulsen were its directors. It is undisputed that Alvin Koenig and Arne Poulsen authorized the execution of the note in question. They constituted a quorum and their action, which was not contrary to law nor contrary to the articles of incorporation or by-laws of the defendant corporation, was binding on the defendant corporation.
The defendant corporation, however, argues that “Arne Poulsen had a conflicting or adverse interest with respect to this loan, and therefore, could not be counted either as part of a quorum of the board of directors, or in any vote by said board, insofar as this loan was concerned.”
It is true that a director of a corporation may not cast a vote upon an issue in which he has an adverse interest. However, here, Arne Poulsen, as a director of the defendant corporation, had no interest adverse to that of the defendant corporation.
First of all, there is substantial evidence in the record before us, although disputed in part, to support the District Court’s finding that the $5,000, which is covered by the note in question, was a loan to the defendant corporation and, was not, as contended, consideration for the option agreement, and we so hold.
Secondly, the record discloses that the defendant corporation, a,t the time the note to the plaintiff was executed, was in debt and in immediate need of money to cover current operating expenses. Poulsen, in order to obtain an option to purchase the shares of stock in the defendant corporation was required to obtain a loan of $20,000 (which was later lowered to $10,000) for the defendant corporation. When he obtained the $5,000 loan from the plaintiff for the defendant corporation, he was acting as an agent of the defendant corporation. He was not, as the defendant contends, acting as the agent of the plaintiff. If such were the case, every borrower would automatically become an agent of his lender, with all the usual rules of agency applying. And, there are no other facts in the record before us giving rise to the proposition that such an agency relationship existed between Poulsen and the plaintiff. Rather, the facts support the opposite conclusion.
Thirdly, all the cases cited by the defendant in support of its contention are clearly distinguishable from the case at bar.
In McConnell v. Combination Mining & Milling Co., 30 Mont. 239, 76 P. 194; on re-hearing, 31 Mont. 563, 79 P. 248, four directors of a corporation voted three of their members salaries and back pay; in O’Rourke v. Grand Opera House Co., 47 Mont. 459, 133 P. 965, at a meeting of the board of directors, which consisted of three members, two of the members, one of whom was the president of the corporation, attended and, by resolution, authorized the execution of a promissory note to the president for moneys advanced by the latter to the corporation; in Gordon Campbell Petroleum Co. v. Gordon Campbell-Kevin Syndicate, 75 Mont. 261, 242 P. 540, only two of the three trustees constituting the board of trustees of a business trust were present at one of its meetings when the individual claim of one of the two was presented for allowance and an account stated agreed upon; and in Stanton v. Occidental Life Ins. Co., 81 Mont. 44, 261 P. 620, the president and the secretary of a corporation entered into an agreement, whereby the president obtained a settlement and release of his promissory note made to the corporation, for some $15,000 less than was due on the note.
In the case at bar, on the other hand, two of the three directors of the defendant corporation, in the absence of the third director, authorized the execution of a promissory note to a third party, the plaintiff. These directors did not execute the note to themselves nor did they stand to profit from its execution.
Arne Poulsen, as president of the defendant corporation, not only had express authority to execute the note in question, but he also had implied authority.
In the absence of special authority, the president of a corporation has no power, merely by virtue of his office alone, to execute negotiable paper in the name of the corporation. (Alley v. Butte & Western Mining Co., 77 Mont. 477, 251 P. 517.) “Where, however, such power is specially conferred upon him [president] * * * by the corporate charter or by a resolution or by-law of the board of directors, or, where such power exists, by implication from the nature of the agency or by reason of Ms * * * being held out by custom or course of dealing as having such authority, or being intrusted with the conduct and management of the corporate affairs, which requires the use of such instruments in the ordinary course of the business, the president * * # may bind the corporation by the execu,tion * * * of negotiable paper * * (Emphasis supplied.) 19 C.J.S. Corporations, § 1060(c), pp. 587-588.
The plaintiff’s case does not here rest upon the proposition that Poulsen’s authority to bind the corporation by promissory notes executed for it or in its name may be implied from the mere fact of his official position. To the proof of the fact that he was president, or chief executive officer of the defendant corporation, is added other evidence that he was also one of its three directors and the manager of its business. The entire corporation was made up of Poulsen, Alvin Koenig, and one B. W. Brenneke, who is not shown to have any active hand in the business. The record shows that Poulsen had and exercised “full management and control of the affairs of said corporation.” The evidence as to the whole course of conduct of the directors and stockholders of the defendant corporation in allowing Poulsen such “full management and control” was sufficient to justify a finding that he was thereby vested with power to borrow money on the note of the corporaton.
The defendant corporation was in debt and Poulsen, as a faithful servant intent on saving his corporation, did what the ordinary prudent business man would do in carrying on the affairs of the corporation (i. e., borrow money in the name of the corporation and bind it by a note evidencing the same) and, in so doing, violated no statute of this state, nor the articles of incorporation or any by-law of the defendant corporation. Poulsen was dealing with a matter directly connected with the ordinary business affairs of the defendant corporation and the promissory note to the plaintiff was such as was usual, proper, and necessary, under the circumstances, in the ordinary prosecution of the corporation’s business.
The defendant further contends that the note in question was not properly executed in that it was not attested by the secretary as was the usual custom and practice of the defendant corporation. Where the corporation receives the benefit of the note, as was clearly shown in this case, the corporation is estopped from setting up as a defense to an action on the note an informality in its execution. (19 C.J.S. Corporations, § 1226, pp. 909-910.)
It is also contended that the defendant corporation received no consideration for the note in question. That this contention is without merit is obvious. The consideration for the note was $5,000, which went to pay claims outstanding against the defendant corporation. Even Gerald Koenig, principal witness for the defendant, testified that he was, as a result of the plaintiff’s loan, able to cash checks against the defendant corporation which he had previously thereto been unable to cash because of insufficient funds in the corporation’s account. He also testified that, as a result of the loan, he was able to subsequently draw and cash other checks payable to himself. These and other facts in the record lead us to but one conclusion and that is that the defendant corporation received full and adequate consideration for the note in question.
There being substantial evidence to support the judgment and no reversible error in tbe record, tbe judgment of the District Court is affirmed. It is so ordered.
Affirmed.
MR. CHIEF JUSTICE JAMES T. HARRISON and MR. JUSTICES ADAIR, DOYLE and CASTLES concur.
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PER CURIAM:
Petitioner Paul Dyer has transmitted a letter dated June '20, 1969, to this Court in respect to his petition for writ of habeas corpus.
Since, the petition has been referred to the Montana Defender Project for attention it is ordered that copy of Dyer’s letter be likewise referred so as to enable them to take such action as appears appropriate.
|
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MR. JUSTICE SHEEHY
delivered the opinion of the Court.
Plaintiffs appeal from an order of the District Court, Yellowstone County, granting partial summary judgment in favor of defendant Elizabethan Manor in an action against it and one other party.
Elizabethan Manor is a condominium project conceived by three Billings developers.- Desiring to obtain financing for their project, the developers entered into subscription and purchase agreements with interested individuals in which the individuals agreed to purchase certain units of the condominium to be constructed. In these agreements the prospective unit owners acknowledged receipt of copies and subscribed to the condominium declaration and bylaws. Plaintiff Jordan signed her agreement on September 21, 1971 as indicated by the record before this Court.
On November 21, 1971, the developers purchased the land upon which the condominium units were eventually constructed. On June 1, 1972, pursuant to section 67-2315, R.C.M.1947, now section 70-23-302 MCA, developers filed as a preliminary declaration and by laws, the documents represented by the copies attached to the subscription and purchase agreements. These documents indicated how the condominium would be operated once it was completed and had formal existence, and were virtually identical to the final documents later certified and filed. Between June 15, 1972 and November 9, 1972 the developers executed warranty deeds to the separate units to individuals who signed the purchase agreements.
The developers on March 22, 1973 filed the final signed declaration, and a certificate that the bylaws had been adopted and signed by two of the developers, one as chairman of the board of directors of the association of unit owners and one as secretary of the association. This action was pursuant to section 67-2303, R.C.M.1947, now section 70-23-103 MCA, and section 67-2320, R.C.M.1947, how section 70-23-307 MCA. As indicated above, these documents were virtually identical to the copies of documents attached to the subscription and purchase agreements which were acknowledged and subscribed to by each individual subscriber and future owner. On December 11, 1973, at the annual meeting of the defendant association a majority of the association approved the bylaws filed on March 22, 1973, and further ratified all acts of the directors to December 11, 1973.
After the condominium had been functioning for sometime in a communal living arragement involving plaintiff and the other apartment owners, plaintiff Idabel Jordan became dissatisfied with certain aspects of the situation and stopped paying her assessed share of the common expenses as provided for in the bylaws. A series of unpleasant encounters between plaintiff and other members of the association followed.
On August 20, 1974, plaintiff filed a two-count complaint in the District Court for Yellowstone County. Count one named Elizabethan Manor Association as defendant and alleged the statutory procedure for establishing a condominium had not been correctly followed. The first count sought a declaratory judgment as to the rights, status and legal relation between plaintiffs and the association, a complete financial accounting from the association to plaintiff, and an injunction enjoining the association from “acting in manner contrary to the law and to the rights of plaintiffs with respect to the operation and maintenance of said condominium.” Count two named as defendant a property management firm which was administering the affairs of the condominium. The partial summary judgment entered by the District Court does not address the second count and that count is therefore not involved in this appeal.
Elizabethan Manor filed an answer and counterclaim denying any failure to comply with the condominium laws and claiming damages for arrearages in the assessment of common expenses. The counterclaim prayed for judgment for the arrearages and foreclosure and sale of plaintiff’s interest in the condominium unit pursuant to sections 67-2326 and 2327, R.C.M.1947, now sections 70-23-607 and 70-23-608 MCA.
Motion for partial sumary judgment as to the matters concerning them was made by Elizabethan Manor Association on October 28, 1976. After briefs had been submitted by both parties, the District Court entered an order of partial summary judgment in favor of the association to the extent the final declaration and bylaws of the condominium were valid and enforceable and the assocation was entitled to judgment against Mrs. Jordan for arrearages in the assessment for admitted common expenses. The court reserved judgment on expenditures not admitted by plaintiff. Foreclosure was granted but stayed on the condition the amount of admitted common expenses due be made current forthwith and thereafter paid regularly when due. The order of partial summary judgment was made final by certification pursuant to Rule 54(b), Mont.R.Civ.P. on April 24, 1978. This appeal followed.
Elizabethan Manor cross-appealed from that portion of the partial summary judgment entered by the District Court which denied respondent its attorney fees as claimed in its motion for summary judgment.
Before proceeding with a discussion of the merits on this appeal it is necessary to indicate the scope of our consideration of this case. This matter is before this Court on an appeal from a partial summary judgment, properly certified as final, declaring only that the final declaration and bylaws were valid and thus the condominium had proper existence, defendant Elizabethan Manor was entitled to a judgment for plaintiffs’ share of admitted expenditures, and that defendant Elizabethan Manor was entitled to a foreclosure of its lien for such expenditures. Such foreclosure was stayed upon the condition the plaintiff pay her share of expenses determined as due and owing and thereafter regularly pay the assessed share of common expenses. These are the only matters which have been finally determined by the District Court. It has reserved issues on the remaining challenged expenses and thus still has jurisdiction over these two parties. We therefore decline plaintiff Jordan’s invitation to rule on issues not addressed by the District Court, preferring to wait until a final judgment on those issues has been presented to us. See Rule 1, Mont.R.App.Civ.P.
In reviewing an appeal from a summary judgment this Court’s concern is whether the moving party is entitled to judgment on the law applicable to the facts established by the pleadings, depositions, answers to interrogatories and admissions on file together with affidavits appearing in the record. Audit Services, Inc. v. Haugen (1979), . . . Mont. . . ., 591 P.2d 1105, 36 St.Rep. 451; State v. Jennings (Alaska 1976), 555 P.2d 248; Cherry v. Vanlahi, Inc. (1975), 216 Kan. 195, 531 P.2d 66; Rule 56(c), Mont.R.Civ.P. Reviewing the record it is apparent the only issue in this appeal between these parties is the validity of the procedure establishing the condominium project. Plaintiff has admitted expenditures forming the basis of the judgment, questioning only their validity as to the authority of the condominium to make the assessment, alleging it was not properly formed. Thus, we are able to frame the issues presented by this appeal in the following manner. First, was the District Court correct in ruling the final declaration and bylaws were valid? Second, was it proper for the District Court to stay the foreclosure of the lien upon the condition plaintiff Idabel Jordan regularly pay the future charges not yet assessed? Third, was the amount of the judgment here correctly computed? Finally, is the defendant Elizabethan Manor entitled to attorney fees in this action?
The initial issue presents a question of first impression to this Court which involves the statutory construction of provisions of the Montana Unit Ownership Act, section 67-2301, et seq., R.C.M.1947, now section 70-23-101, et seq., MCA. Section 67-2303, R.C.M.1947, as it read at the times pertinent hereto stated that in order to submit any property to the provisions of the act a “declaration” must be recorded by the owner of the property. Section 67-2304, R.C.M.1947, now section 70-23-401 MCA, indicates that once the property is submitted to the act the individual units may be conveyed, encumbered or subjected to other “juridic acts”. Section 67-2302, now section 70-23-102 MCA, defines “unit” as a part of the property intended for independent use; “unit owner” as a person owning a unit in fee simple; and “association” as all the unit owners acting in accordance with the declaration and bylaws.
Plaintiff argues the statutory requirements for establishment of a condominium project have not been complied with and therefore the assessments made against her unit are without legal authority. This argument is based on the contention that when the final declaration, which was signed by the developers, was filed in March 1973 the developers were not “owners” and thus not capable of executing that document. The developers had previously executed subscription agreements and warranty deeds to the units to the prospective grantees and thus, contends plaintiffs were not owners of the property entitled to file the declaration. Plaintiffs also contend the bylaws were improperly adopted and certified. These bylaws were signed and certified by the developers as owners and officers of the association and were filed simultaneously with the final declaration on March 22, 1973. Because the developers were not owners as plaintiffs have previously argued, and because the bylaws were not adopted by each of the persons to whom the developers had executed warranty deeds and were not certified by officers of an association of those persons, plaintiffs contend the bylaws were ineffectual and actions taken pursuant to those bylaws were without legal authority. We do not agree with this argument.
The filing of the final declaration is the most significant event in the establishment of a condominium. It is this action which subjects the property in question to the provisions of the act and it is this subjection which allows the units of the condominium to be conveyed as “individual” units. In construing an act very similar to Montana’s, the Hawaii Supreme Court stated that the filing of the final declaration submitting the property to the provisions of the act “makes the property susceptible to conveyance of individual units.” State Savings & Loan Association v. Kauaian Development Co. (1969), 50 Haw. 540, 445 P.2d 109, 116 (emphasis added.) Our own statute indicates, as did the Hawaiian provision, that is is only while the property is submitted to the Unit Ownership Act, via the final declaration, that a unit may be individually conveyed and encumbered. Section 67-2304, R.C.M.1947, now section 70-23-401 MCA. We therefore conclude that until the final declaration is filed those who are the fee owners of the condominium project are the fee owners of the units of the project. As such, these persons are the parties contemplated by statute to sign and file the declaration. Section 67-2303, R.C.M.1947, now section 70-23-103 MCA. In the present case the developers of the project were such parties and did so validly file the final declaration. Because no units may be individually conveyed, or encumbered until the final declaration is filed submitting the property to the act, the subscription agreements and warranty deeds divested the developers of no interest in the property until the final declaration was filed; thus they remained the fee owners until that time. See, 15A Am.Jur.2d Condominiums § 26, p. 885.
Having determined the final declaration was properly executed and recorded, we now consider plaintiffs’ arguments with respect to the bylaws. As we have stated above, the fee owners of the units until the final declaration is recorded, and thus “unit owners” by statutory definition (section 67-2302(14), R.C.M. 1947, now section 70-23-102(17) MCA), are those persons who own the condominium project, here the developers. The statutory scheme requires all unit owners to adopt the bylaws by which the association of unit owners is governed and for the presiding officer and secretary of the association to certify these bylaws. This certification must be recorded simultaneously with the recording of the final declaration. Section 67-2320(2), R.C.M. 1947, now section 70-23-307(2) MCA. The developers in this case signed the bylaws as unit owners and certified the bylaws as officers of the association of unit owners which they were the sole members.
Appellant argues this procedure was not valid. We conclude it was valid. Until the final declaration is filed, the fee owners of the project are the fee owners of the units and thus the “unit owners”. As “unit owners” they are the “association” who must certify the bylaws, such certificate to be recorded simultaneously with the final declaration. This is what happened in the present case and which we determine was not improper. We note, moreover, that in the present case all future unit owners, including plaintiff, affirmed virtually the same declaration and bylaws when they signed the subscription and purchase agreements. Furthermore, once the final declaration was recorded thus giving life to the otherwise inert warranty deeds to the individual purchasers, these owners then constituted the association and could amend the bylaws if they desired.
We therefore hold the District court was correct in its conclusion the condominium was properly formed and affirm the summary judgment on this point.
We now must consider whether the District Court could correctly stay the foreclosure of the lien provided for by statute upon the condition the plaintiff pay all overdue assessments determined to be owing and to regularly pay all future assessments for common expenses. We note preliminarily that section 67-2326(1), R.C.M.1947, now section 70-23-607(1) MCA provides for a lien against the individual unit for common expenses. This lien is perfected by filing a claim containing a true statement of the account due for such common expenses. Section 67-2326(2), R.C.M.1947, now section 70-23-607(2) MCA. The lien in this case was properly perfected to the extent of the supporting account. Recause the condominium project was validly established the expenditures plaintiff Idabel Jordan admitted are proper as against her and thus the lien could be foreclosed. The question that remains is whether the District Court could impose a stay with respect to the payment of current and future assessments.
Section 67-2326(1), R.C.M.1947, now section 70-23-607(1) MCA, provides for a lien upon the individual unit for all common expenses chargeable to that unit. The defendant association perfected it lien in the manner provided for in section 67-2326(2), R.C.M.1947, now section 70-23-607(2) MCA and it is this lien defendant association sought to foreclose in its counterclaim. The District Court granted the foreclosure but stayed its execution upon the condition set forth above. However, if plaintiff Idabel Jordan complies with that part of the condition requiring payment of common expenses currently due and owing, the lien of ' the defendant association is extinguished. Payment of the debt upon which the lien is based extinguishes the lien, and thus here also the foreclosure based upon it. Bushman Construction Co. v. Air Force Academy Flousing, Inc. (10th Cir. 1964), 327 F.2d 481, 485; Richter v. Walker (1951), 36 Cal.2d 634, 226 P.2d 593, 599; 57 C.J.S. Mechanics’ Liens § 247. The debt in this case obviously consists only of those assessments due up until the time of judgment of foreclosure or otherwise as any future assessments are undetermined and not yet in issue. In this circumstance there is nothing to stay with respect to payment of future assessments, as payment of currently due and owing assessments extinguishes the lien and thus the basis for foreclosure. We therefore modify the District Court’s partial summary judgment by striking that portion of the judgment staying the execution of foreclosure on the condition the plaintiff “thereafter regularly pay the common expenses as assessed when due . , and by limiting the stay to the condition plaintiff pay those expenses determined by the District Court as currently owing.
We are next asked to consider the correctness of the District Court’s computation of plaintiff Idabel Jordan’s share of admitted expenditures. Defendant Elizabethan Manor has agreed with plaintiff Idabel Jordan’s argument that the amount of common expenses plaintiff has paid should be deducted from her assessed share and' not from total common expenditures before computing her share as was done by the District Court. The only question remaining are the numbers to be used in this computation. Plaintiff Idabel Jordan argues she has been assessed twice for amounts placed in reserve accounts and would therefore not include those amounts in her computation. The bylaws of the association, which we have upheld herein, clearly provide for such reserves. See, Bylaws, Art. VI, § 1(d). The maintenance of such reserved by condominium associations has been judicially sanctioned. Association of Unit Owners of Inn of Seventh Mountain v. Gruenfeld (1977), 277 Or. 259, 560 P.2d 641, 644. Because plaintiff has not paid any expenses except for the amount credited below, she could not have already made her contribution to the reserve account and thus is not being twice assessed for the same expense. The judgment of the District Court is therefore modified to comport with the following computation.
Total of association checks for common expenditures
Sept. 1972-October 1976 .....................$31,167.31
Less:
Total of checks not “admitted” reserved by the court .................................... 4,840.44
Total to be divided fourteen ways (Fourteen individual units)............................ 26,326.76
One-fourteenth of above..................... 1,880.49
Less:
Jordan payment............................ 654.75
Total due by Jordan under judgment dated April 24, 1978 .............................$ 1,225.74
The final matter in this appeal is defendant association’s claim for attorney fees. Defendant is correct in its statement that this Court has held attorney fees are available when provided for in an agreement between the parties to a lawsuit. Kintner v. Harr (1965), 146 Mont. 461, 408 P.2d 487. In this cause the declaration provided for recovery of attorney fees by the prevailing party in litigation resulting from the default of payment of common expenses. Final Declaration, § 16(a), (c). The operative words are “the prevailing party”. As this action now stands we do not perceive a prevailing party with respect to a final, complete judgment. The District Court has only decided, and we have affirmed, that the condominium was validly formed and that the defendant is entitled to a judgment of $ 1,225.74. There remains to be decided the validity of plaintiffs’ assessed share of over $4,800.00 in common expenses and the necessity of an accounting. A prevailing party is the one who has an affirmative judgment rendered in his favor at the conclusion of the entire case. Ennis v. Ring (1959), 56 Wash.2d 465, 341 P.2d 885, 889. The entire case here has not been concluded as between these two parties. We therefore affirm the District Court’s ruling at this point that each party bear their own attorney fees.
Judgment modified in part and affirmed in part, and remanded for further proceedings in accordance with this opinion. The parties shall bear their own appeal costs.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY, HARRISON, and SHEA concur.
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MR. JUSTICE HARRISON
delivered the opinion of the Court.
Plaintiff Glacier Campground appeals from a judgment entered by the District Court of Flathead County, the Honorable J. M. Salansky, dismissing its complaint and awarding costs to defendants. Parties submitted an agreed statement of facts and briefs supporting the legal position of each, on which the decision was rendered.
On March 30, 1973, plaintiff Glacier Campground, a limited partnership, and defendants Paul M. Blair, Jr., William W. Green III, and William E. Kuster entered into a contract for the sale and purchase of certain real estate in Flathead County. Pursuant to the contract, defendants were to pay plaintiff $293,000 for the real and personal property described therein. Defendants, Blair, Green and Kuster assigned their interest in the contract to Wild River, Inc., a foreign corporation authorized to do business in the State of Montana, and in so doing, retained individual liability and assumed corporate liability for the duties and obligations imposed by the contract.
The individually named defendants and the assignee corporation subsequently defaulted in performance of the contract. Plaintiff-seller notified the purchasers of their default, and specified the amounts due and owing for principal, interest thereon, real estate taxes and insurance premiums. Following those specifications, the notice and demand for payment stated: “As a consequence of said defaults, the undersigned, pursuant to Paragraph 9 of said Contract for Deed have elected to declare the full balance payable and do hereby declare the full balance due under the terms of said Contract immediately due and payable as of this date.” It concluded with this statement: “In the event you fail to make such payment, by that date [December 31, 1974], the undersigned will have no alternative other than to proceed with suit and recover such sums together with interest and costs of suit.”
Defendants made no payment to remedy the default, so plaintiff instituted proceedings in the District Court of Flathead County. In the amended complaint, relief was sought in the alternative: judgment for the total amount yet to be paid under the terms of the contract, or for the amounts already due as of the date of judgment. No relief was granted, however, because the District Court concluded that, as a matter of law, the contract for deed provided the seller a single remedy in the event of purchasers’ default, that remedy being repossession of the property and retention of improvements and payments already made by defendants.
Three of the four issues advanced by the parties may be rendered to the following :
Is plaintiff, by the terms of the contract, precluded from pursuing an action to obtain a money judgment either for the total amount to be paid by defendants under the terms of the contract or, in the alternative, for the amounts due as of the date of judgment?
Although the pleadings do not put the following in issue, the parties nonetheless ask that we entertain this question:
If plaintiffs may so pursue an action and a money judgment is awarded allowing a sale of property, may plaintiff obtain a deficiency judgment in the event that the proceeds from the sale of the property do not at least equal that due plaintiff under the terms of the contract?
We consider these in turn.
The portion of the contract around which the dispute centers reads as follows:
“9. DEFAULT— In case of the failure of the said Purchasers to make any of the payments of principal or interest, or to perform any of the covenants on their part hereby made and entered into, then the whole of said payments and interest shall, at the election of said Seller, become immediately due and payable, except as hereinafter provided, and this Contract shall, at the option of the Seller, be forfeited and determined by giving to. the Purchasers sixty (60) days’ notice, in writing, of the intention of the Seller to cancel and determine this Contract and any covenants and payments which the Purchasers have failed to perform and make, if any; and the time when place where payment can be made; should the said Purchasers make good such default within said 60-day period, then their rights under this Contract shall be fully reinstated, and said acceleration of said payments shall fail; however, should said Purchasers fail to make good any such default within said 60-day period, said acceleration shall be good and this Contract may be terminated by the Sellers as aforesaid.
“It is mutually understood and agreed by and between the parties to this Contract that 60 days is a reasonable and sufficient notice to be given said Purchasers in case of their failure to perform any of the covenants on their part hereby made and entered into and shall be sufficient to cancel all obligations hereunto on the part of the said Sellers and fully invest them with all right, title and interest agreed to by conveyed, and the said Purchasers shall forfeit all payments made by them on this Contract, and all right, title and interest in all buildings, or other improvements shall be retained by the said Sellers, in full satisfaction and as a reasonable rental for the property above described and in liquidation of all damages by them sustained, and they shall have the right to take possession of the land and premises aforesaid.”
Over fifty years ago, in Wandell v. Johnson (1924), 71 Mont. 73, 227 P. 58, this Court had occasion to interpret language of a real contract for the sale and purchase of real estate, much of which language is substantially similar to that found in the default clause of the contract before us. the Wandell contract read in pertinent part:
“ ‘And in case of failure of the said party of the second part [Purchaser] to make either of the payments, or interest thereof or any part thereof, or perform any of the covenants on his part hereby made and entered into, then the whole of said payments and interest shall, at the election of said first party [Seller] become im mediately due and payable, and this contract shall, at the option of the party of the first part, be forfeited and determined by giving to the said second party thirty days’ notice in writing,’ which notice ‘shall be sufficient to cancel all obligation hereunto on the part of the said first party and fully reinvest him with all right, title and interest hereby agreed to be conveyed, and the party of the second part shall forfeit all payments made by him on this contract, and all his right, title and interest in all buildings, fences or other improvements, whatsoever, and such payments and improvements shall be retained by the said party of the first part, in full satisfaction and in liquidation of all damages by him sustained, and he shall have the right to re-enter and take possession of the premises aforesaid.’ ”71 Mont, at 75, 227 P. at 59. (Emphasis added.)
The emphasized portions of the quoted language found in the default provision of the contract under consideration.
The Wandell Court expressed its dissatisfaction with the language in the contract before it in these terms:
“No one would have the temerity to suggest that the language of this agreement is either clear or explicit. Indeed, it would be difficult to conceive of a contract expressed more clumsily; hence we are required to resort to the usual rules of construction to ascertain, if possible, what the parties meant by the language they employed.” 71 Mont. at 76, 227 P. at 60.
We have essentially the same language before us now, more than fifty years later. It has not been made clear or explicit by the passage of time; it is still clumsy. Thus, we, too, must resort to the usual rules of construction to ascertain, if possible, what the parties meant by the language they employed.
Section 13-702, R.C.M.1947, mandates that a contract must be interpreted so as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as that is ascertainable and lawful. The intention of the parties is to be ascertained, if possible, solely from the language used in the instrument, section 13-705, R.C.M.1947, and resort may be had to extrinsic evidence only when the contract, on its face, appears ambiguous or uncertain. See Hill Cattle Corp. v. Killorn (1927), 79 Mont. 327, 340-41, 256 P. 497, 502. Because the parties submitted the case on an agreed statement of facts, the lower court had no resort to extrinsic evidence, even though the contractual provision regarding default appears, on its face, ambiguous and uncertain. We must now grapple with the language of the contract itself.
Defendants offer.the following interpretation of the clause under consideration:
“Upon default by purchaser, the seller has the right to accelerate the payments and demand the payment of the entire total [sic] within 90-days [sic]. If the buyer complies with the demand, then he is entitled to the warranty deed under the contract. If the buyer fails or refuses to meet the demand, he loses his equity in the contract and is denied the warranty deed and possession of the property. The seller has the option of demanding the entire principal balance or simply the installment then due. In either event, he is more than adequately protected in that he still holds legal title to the property. The buyer, on the other hand, has but one [sic] choice, either pay the amount demanded by the seller or forfeit all of his rights under the contract. There is nothing in the contract that contemplates a suit for money.”
Defendants, thus, have no quarrel with the right of the seller to demand the entire principal balance or the amounts then due. They do dispute the right of the seller to bring an action to get some action on the demand.
Despite the fact that forfeitures are not favored in law or equity, purchasers advance a most curious request, that being to impose forfeiture on them. While that might be advantageous for these particular defendants, we are not unmindful of the harsh results which forfeiture may work in other circumstances. See G. Nelson and D. Whitman, The Installment Land Contract — A National Viewpoint, 1977 B.Y.U.L. Rev. 541, 543-65 (1977), and Comment, Forfeiture: The Anomaly of the Land Sale Contract, 41 Alb.L.Rev. 71 (1977). We do not now entertain the question of the equity of foreclosure in cases involving contracts for deed, and so reserve judgment only whether this plaintiff may look beyond the terms of the contract for relief.
Defendants in the instant case, as did the defendant in Wan-dell, 71 Mont, at 76, 227 P. at 59, contend that forfeiture of the contract, retention of the money paid, and reentry into possession constitute the only remedy available to plaintiff. Defendants further contend as did the earlier defendant, Wandell, 71 Mont, at 78, 227 P. at 60, that because the contract provides an exclusive remedy, plaintiff cannot maintain an action at bar for a money judgment. Wandell was disposed of on the basis of the holding in Alexander v. Wingett (1922), 63 Mont. 254, 206 P. 1088, viz., the forfeiture clause in the contract was deemed to be for the benefit of the vendor, and so the failure of the vendee to make payments when due did not render the contract void so as to preclude an action for the purchase price of the real estate or so much thereof as was due when the action was commenced, a holding which we find adaptable to the instant case. Because the contract at bar does not provide that the remedy of forfeiture with retention of payments and improvements is the exclusive remedy available to the seller in the event of the purchasers’ default, the seller is not limited in his pursuit of relief. We hold that, in the instant case, the seller is not precluded from bringing an action to recover the purchase price of the real estate or, in the alternative, for so much thereof due as of the date of judgment.
After careful examination of the first paragraph-sentence of the default clause, we conclude that it appears to say this:
If the Purchasers fail to perform according to the terms of the contract, the Seller may elect to accelerate the payments such that all payments and interest become immediately due and payable. In order to exercise that election, Seller must give Purchasers notice in writing of the intent to do so. That written notice also must specify both how Purchasers failed to perform as required by the contract and how Purchasers are to perform, within sixty days and according to the terms of the contract, in order to cure their default. If, within the sixty days, Purchasers cure such default, the accelera tion is thereby voided, and the contract continues iri full force and effect. If, however, within the sixty-day period, Purchasers do not cure such default, the acceleration is effective and all payments and interest are due and payable as of the last date of the sixty-day period.
The sixty-day period is, in effect, a grace period, within which defaulting purchasers may exercise the opportunity to redeem themselves by coming current in their contractual obligations and thereby keep the contract alive.
The second paragraph-sentence of the default clause is difficult to construe. To make any sense of the mention of “60 days” there, reference must necessarily be made to the immediately preceding paragraph-sentence. When that is done, the initial portion of the second paragraph-sentence seems to say:
The parties agree that the sixty-day period referred to in the preceding paragraph is a reasonable period of time within which Purchasers may act to cure their default.
How “60 days . . . shall be sufficient to cancel all obligations . . . and fully invest . . . right, title and interest . . .” is a mystery, for days, in and of themselves and regardless of their number, do not cancel obligations and do not invest anyone or anything with right, title or interest. This, perhaps, is what is meant:
Purchasers’ failure to cure their default within that sixty-day period is sufficient to cancel all of Seller’s obligations under the contract and to fully invest Seller with all right, title and interest agreed to be conveyed by this contract.
We do not speculate as to the nature of the phrase “is sufficient to cancel”; we merely employ the parties’ language to attempt to make better sense of that which is virtually nonsensical.
The remainder of the paragraph-sentence says the following:
If the Purchasers fail to cure their default within that sixty-day period, they shall forfeit all payments made by them under the terms of the contract. All right, title and interest in all buildings or other improvements shall be retained by the Seller, in full satisfaction and as a reasonable rental for the property previously des-
cribed and in liquidation of all damages sustained by the Seller. The Seller shall have the right to take possession of the land and premises previously described.
It would have made more sense for the contract to provide that payments, made by the purchasers and forfeited because of their default and failure to cure, be retained by the seller as full satisfaction and as a reasonable rental for the property subject of the contract. While this may have been what the parties intended to say or thought they were saying or were trying to say, the. contract does not say that. Instead, it states that “all right, title and interest, or other improvements” are to be retained by the seller in full satisfaction and as a reasonable rental. Too, it would have made more sense for the parties to have drafted the provision regarding the seller’s retention of buildings or improvements using the conjunctive “and” rather than the disjunctive “or, but, again, the contract does not say that. The contract reads “all right, title and interest in all buildings, or other improvements shall be retained by” seller. (Emphasis added.)
The problem now becomes one of reconciling the default provision to itself, see section 13-718, R.C.M.1947, perhaps an impossible task. Upon the purchasers’ default, the seller is given the option to accelerate payments such that all payments and interest become immediately due and payable. (That this language of acceleration is clear. The following language from the contract at issue in White v. Jewett (1938), 106 Mont. 416, 78 P.2d 85, language almost identical with that found in the default clause under consideration here, was deemed to be an example of “a usual clause” of acceleration:
“* * * then the whole of said payments and interest shall, at the election of said first party become immediately due and payable
Rader v. Taylor (1958), 134 Mont. 419, 431, 333 P.2d 480, 488.) The purchasers are given a sixty-day period in which they may redeem themselves. If they do not so redeem, the acceleration is effective. If they do not redeem, they forfeit all payments made by them under the terms of the contract. If they do not redeem, the seller retains all right, title and interest in all buildings or other improvements. If they do not redeem, the seller has the right to take possession of the land and premises.
The remedies are not deemed to be either cumulative or exclusive. Indeed, were they the former, a crushing penalty would devolve on the defaulting purchasers. Logic dictates that they cannot be the latter. It makes no sense to say that there is an exclusive remedy, where a number of them are provided. No part of the contract provides that any one is the exclusive remedy, or even that, taken collectively, they represent the field of possible remedies from which the seller is bound to choose. Indeed, were the contract to provide that one remedy is the exclusive remedy, the other language regarding remedies would prove to be more than superfluous — it would be meaningless. No independent rule of construction provides guidance as to choosing one of the many and deeming it exclusive.
We are not unmindful that the language of the contract should be interpreted most strongly against the party who caused the uncertainty to exist. Section 13-720, R.C.M.1947. See also Kielmann v. Mogan (1970), 156 Mont. 230, 235, 478 P.2d 275, 277. In the instant case, counsel for plaintiff-seller drafted the contract, which in turn was reviewed by the purchasers and their counsel. Thus, the contract should be construed most strongly against the seller. The default provision here under consideration lacks clarity and does not admit of a consistent interpretation favorable to anyone. To the extent that we are able to construe it more favorably for the purchasers, we do so: the remedies may not be taken to be cumulative. As we have pointed out, no one of them may be deemed exclusive, and, taken collectively, they may not be deemed the exclusive remedies from which the seller must take his choice.
To be determined is whether the manner in which plaintiff seeks relief by its complaint is consistent with its notice of default and demand for payment from defendants. That determination will be made once it is discerned if the actions of plaintiff constitute an affirmation or disavowal of the contract.
It is clear that plaintiff relied on the contract for deed in noticing defendants’ default and demanding moneys due and owing under the contract. Plaintiff has thus elected to affirm the contract and has bound itself to proceed consistently with that election. Just as a party may not repudiate a contract and later attempt to benefit himself by relying on it. Adamczik v. McCauley (1931) 89 Mont. 27, 35-36, 297 P. 486, 488, neither may he rely on a contract and later attempt to benefit himself by repudiating it. (Compare also Scott v. Kyhl (1963), 141 Mont. 523, 528, 379 P.2d 803, 805, wherein appellants elected their remedy of recission and thereby deprived themselves of a right of action for the recovery of the unpaid purchase money from the respondents; and DeYoung v. Benepe (1918), 55 Mont. 306, 312-13, 176 P. 609, 612, wherein defendant exercised his option to terminate the contract, which thereafter could not be made the basis of an action.) By instituting the proceedings, plaintiff elected to rely on the contract.
The seller here is not exercising his option to declare the contract at an end. If he were to do so, then he would be precluded from suing to recover the purchase price or payments past due, for he could not reclaim the property under a forfeiture clause and at the same time recover any unpaid portion of the sale price. See, e. g., Edwards v. Muri (1925), 73 Mont. 339, 351, 237 P. 209, 213. “The remedy of the vendor by way of cancellation of a contract and the continued liability of the purchaser for the purchase money, whether past due or not, are totally inconsistent ...” Adamczik v. McCauley, 89 Mont. at 36, 297 P. at 488.
It should be pointed out that the seller, in the notice of default and demand for payment, did not declare that it was exercising its option, granted by the terms of the default clause, to “cancel and determine” the contract. The seller, in reliance on the contract, gave legally adequate notice regarding acceleration, and proceeded to inform the defaulting purchasers of its intent to sue to recover the moneys due, should the latter fail to cure their default. The contract did not mandate the seller to “cancel and determine” the contract upon purchasers’ default; rather, an option was given the seller, an option which the seller here chose not to exercise. The seller chose instead to inform purchasers of its intent to exercise another remedy, available at law or in equity and not precluded by the terms of the contract itself.
The language of the second part of the default clause could become operative only in the event that the seller elected to declare a forfeiture. “ A forfeiture was not declared; hence [the seller] was free to treat the contract as in full force and recover [either] the amount of the installments then due,” Wandell v. Johnson, 71 Mont. at 79, 227 P. at 61, or, by the terms of this contract, the total amount yet to be paid.
It is true if a vendor pursues one of his afforded remedies to a conclusion that he is thereby precluded from attempting to follow another. J. M. Hamilton Co. v. Battson, 99 Mont. 583, 591, 44 P.2d 1064, 1067, and cases cited. But merely making a demand for payment does not amount to a waiver of the right to pursue another remedy. (See White v. Jewett (1938), 106 Mont. 416, 421, 78 P.2d 85, 88, wherein the Court concluded that the making of a demand did not amount to a waiver of the right to pursue the remedy of cancellation of the contract.)
Alexander v. Wingett (1922), 63 Mont. 254, 206 P. 1088, sheds light on this problem. Distinguishing that case from an earlier Montana case, the Court took pains to point out that no clause in the Alexander contract asserted directly or by way of inference that the remedies of the vendor, as set forth in the contract, were exclusive, unlike the previous contract which provided that “. . . this contract shall be the only course of settlement thereunder.” 63 Mont. at 258, 206 P. at 1089. The general rule was declared to be as follows:
“It is the general rule that the clause of forfeiture in a contract of the sale does not operate to make the contract void, when there is a default on the part of the vendee, so as to terminate the liability of the vendee, but the vendor may elect whether to declare a forjei ture or rely upon the liability of the vendee as fixed by the contract, and sue for the purchase price.” (Emphasis added.) 63 Mont. at 259, 206 P. at 1089.
Part of the rationale for such a rule is that the purchaser has no right to take advantage of his own default and claim that his liability was thereby terminated. Id.
It appears well settled that “ ‘[w]hen either party to a contract for the sale of land has failed in his obligation, the other is entitled to the alternative remedy of specific performance in equity or damages at law.’ ” Abdallah v. Abdallah (3rd Cir. 1966), 359 F.2d 170, 175.
In Security-First Nat’l Bank of Los Angeles v. Hauer (1941), 47 Cal.App.2d 302, 306, 117 P.2d 952, 954, involving a conditional sales contract of agricultural land, the court stated:
“Upon the breach of any covenant by the vendees under a conditional sales agreement, plaintiffs are entitled to invoke either of two remedies: (1) to affirm the contract and sue for the balance of the purchase price, or (2) to terminate the contract, retain the money paid on the purchase price and repossess the property. [Citation omitted.] These remedies are inconsistent and the election of one precludes the right to exercise the other.”
See also Oconto Co. v. Bacon (1923), 181 Wis. 538, 541, 195 N.W. 412, 413, in which the court determined that election of one of the remedies, i. e., to sue for the unpaid purchase money, to sue for specific performance of the contract, or to declare the contract at an end, waives the others.
As the lower court correctly noted, the contract contains no provision for money judgment in the event of default. At the same time, however, the contract does not provide that the remedy outlined in the default clause was to be exclusive. It is evident that:
“[w]hen a purchaser breaches a contract for the sale of realty, the seller has several remedies from which to choose. The seller may (1) seek recission of the contract [Citations omitted.]; (2) sue in equity for specific performance of the contract [Citations omitted.[; (3) sue in equity for' forfeiture of the purchaser’s rights [Citations omitted.]; or (4) sue at law for damages occasioned by the breach [Citations omitted.].” Duffin v. Patrick (1975), 216 Kan. 81, 82, 530 P.2d 1230, 1231.
In the absence of a contractual provision expressly limiting the remedy or remedies available, a party may pursue any remedy which law or equity affords, as well as the remedy or remedies specified in the contract. As this Court stated in J. M. Hamilton Co. v. Battson (1935), 99 Mont. 583, 591, 44 P.2d 1064, 1067, 101 A.L.R. 520, 524, wherein the plaintiff sued to recover the balance due on a contract for the sale and purchase of real estate.
“Where a contract specifically provides that the remedies enumerated therein shall be the only course of settlement thereunder, a party to it is limited to the remedies provided therein. (Wing v. Brasher, 59 Mont. 10, 194 P. 1106.) Although, when a contract provides for a definite and specific remedy in the case of breach, without any limitation making such enumerated remedy or remedies exclusive, a party is entitled to pursue the remedy specified in the contract, he may also pursue any other remedy which the law affords, in addition to those provided for in the contract. (Alexander v. Wingett, 63 Mont. 254, 206 P. 1088; Wandell v. Johnson 71 Mont. 73, 227 P. 58.). .. Therefore, the plaintiff was free, upon the default of the defendant, to bring an action for the recovery of the balance due on the purchase price ...” (Emphasis added.)
See also White v. Jewett, 106 Mont. at 420, 78 P.2d at 87. As with the contract involved in J. M. Hamilton Co., 99 Mont. at 591, 44 P.2d at 1067, 101 A.L.R. at 524, nowhere in the contract before us is it provided in specific terms that the remedies therein mentioned were deemed to be exclusive, the District Court thus erred in concluding that the terms of the contract made repossession and retention of payments and improvements the exclusive remedy available to plaintiff.
Additional support for this conclusion is found in the following, the last question put to William E. Kuster in his deposistion:
“Q. (Mr. Best) Did you at any time receive verbal [sic] or written assuance or assurances of any kind from any member of the seller that if you defaulted or if Wild Rivers as the corporation defaulted, they would be exclusively limited to the remedies of the contract? A. No.
To answer the second question posed by the parties, we turn to an Oregon case, Renard v. Allen (1964), 237 Or. 406, 391 P.2d 777. In Renard, the court was called upon to determine whether the plaintiff-vendor was entitled to a decree requiring the defendant-vendee, in default under a land sale contract, to specifically perform the contract. The contract there contained a provision that upon default of the vendee, the vendor, at his option, could declare the whole unpaid balance due. The plaintiff brought suit, throughout the trial of which he insisted he was seeking specific performance, i. e., a decree requiring the buyer to pay the balance of the contract price. The trial court believed, however, that the suit was one for foreclosure, and so awarded the plaintiff a decree for the amount of the unpaid installments and other obligations, but not for the balance of the principal. Plaintiff appealed, and the determination of the lower court was reversed with directions to enter a decree of specific performance with the provision that if the money decree was not satisfied within a certain time, the property was to be sold and the net proceeds applied to the satisfaction of the money decree.
In Renard, the plaintiff prayed that, if the sum demanded were not paid within sixty days or other reasonable time, the property to be sold and the proceeds applied to the sum due the plaintiff. The court agreed with the plaintiff that a prayer for sale is not inconsistent with the remedy of specific,.performance, and noted that “[m]any other jurisdictions have approved of the coupling of a decree of specific performance with a provision for a sale if the money decree is not paid.” Renard v. Allen, 237 Or. at 411, 391 P.2d at 779.
Plaintiff in the instant case has not made such a request in his prayer for relief. The issue, the second to be determined, is before us, however, as one advanced by the parties in their statement of agreed-upon issues.
Arguing that issue, defendants claim that to allow seller to pursue his suit to obtain a money judgment would result in the following: that plaintiff will have clear title to the property, will be able to recover the full purchase price of the property, and will be able to recover the full purchase price again in the form of a personal deficiency judgment against the defendants after a sale of the property. This is certainly not the case. Plaintiff may not receive the purchase price from defendants and then refuse to deliver the deed to the property for which defendants will have paid. Furthermore, plaintiff may not recover the remainder of the purchase price and subsequently seek to recover again the same amount for the same property in a suit for deficiency judgment.
In an attempt to block such a fanciful triple coup, defendants invoke section 93-6008, R.C.M.1947, captioned Deficiency judgment not allowed on foreclosure of purchase price mortgage. The statute reads as follows:
“Upon the foreclosure of any mortgage .. . for the balance of the purchase price of such real property, the mortgagee shall not be entitled to a deficiency judgment on account of such mortgage or note or obligation secured by the same.”
In invoking this statute, defendants contend that a contract for deed, in effect, is a purchase price mortgage. They further argue that public policy dictates that the statute be read so as to apply to “all purchase money situatipns where a deficiency could be obtained”. Such contentions ignore the fact that a contract for deed and a purchase money mortgage are not one and the same thing with two different names. They are two distinct legal creatures.
“The land sale contract, in contrast to a mortgage or trust deed, does not secure a loan or forbear the payment of money. Rather, the land contract is an installment sales contract, providing for periodic payment of the purchase price, often in monthly installments. Unlike mortgages . . ., the land sale contract seller retains legal title to the realty to secure full and final payment.” Comment, Forfeiture: The Anomaly of the Land Sale Contract, 41 Alb. L.Rev. 71, 73-74 (1977).
Because we recognize that the two are distinct, we adopt the reasoning which the Oregon Supreme Court advanced in Renard when confronted with a problem similar to the one at bar. Under consideration, inter alia, in Renard, 237 Or. at 412, 391 P.2d at 780, was an Oregon statute which expressly prohibits deficiency judgments in the foreclosure of purchase money mortgages, the pertinent portion of which is virtually identical to that found in the Montana codes.
Or.Rev.Stat. § 88.070 provided, in part, that “the mortgagee shall not be entitled to a deficiency judgment on account of the mortgage or note or obligation secured by the same.”
That statute and section 93-6008, R.C.M. 1947, refer expressly to mortgages and mortgage foreclosures.
As we have explained above, and as the Oregon court intimates, Renard v. Allen, 237 Or. at 412, 391 P.2d at 780, land sale contracts, or contracts for deed as they are commonly called in this state, and note mortgage transactions differ from one another. Therefore, “[t]he statutory prohibition against deficiency judgments in mortgage foreclosures is not a prohibition against awarding specific performance by granting a money decree and further providing that in the event the decree is not paid the property shall be sold and the proceeds applied in satisfaction of the money decree.” Renard v. Allen, 237 Or. at 413, 391 P.2d at 780, and cases subsequently cited.
We concur in the declaration of the Oregon court, to wit;
“There is nothing inequitable, i.e., ‘unfair,’ about such procedure. By entering a decree for specific performance the court has transferred an obligation assumed by contract into a judgment. If the purchaser does not pay this obligation, it is reasonable that the property should be sold;. . .” Renard v. Allen, 237 Or. at 416, 391 P.2d at 782.
It is not unfair or inequitable because specific performance of such a contract is granted in favor of the seller as freely as in favor of the purchaser, although the relief actually obtained is only a recovery of the money. Tombari v. Griepp (1960), 55 Wash.2d 771, 775-77, 350 P.2d 452, 455-56, and the numerous authorities subsequently cited.
As II Restatement of Contracts § 360, Comment c, states:
“Before conveyance has been made by the vendor his remedy in damages is not an adequate one. He can not get judgment for the full price, because he still has the land. His damages are usually measured by the contract price less the value of the land retained; but the land is a commodity that has no established market value, and the vendor may not be able to prove what his real harm will be. Even if he can make this proof, the land may not be immediately convertible into money, and he is deprived of the power to make new investments. Prior to getting a judgment, the existence of the contract, even though broken by the vendee, operates as a clog on salability, so that it may not be possible to find a purchaser at any fair price. In addition, the fact that specific performance is available to the vendee is of some weight, because of the rule as to mutuality of remedy (see § 372(2)).”
The prayer to plaintiff’s amended complaint is as follows:
“WHEREFORE, Plaintiffs pray judgment against Defendants as follows:
“For Count I.
“1. The sum of $212,000 principal with interest thereon at the rate of eight and one-half percent (81/2%) from December 1, 1973 to the date of judgment herein;
“2. For the sum of $58,000 principal together with interest thereon at the rate of seven and one-half percent (71/2%) per annum from and after November 1, 1973 to the date of judgment herein;
“3. For the costs incurred in the prosecution of the suit herein;
“4. For such other and further relief as to this Court may seem meet and equitable under the circumstances;
“For Count II.
“ 1. For the sum of $78,334.26 principal with interest thereon at the rate of interest specified in the contract for said sum from and after the 1st day of January, 1976 the date of judgment herein;.
“2. For the costs incurred in the prosectuion [sic] of the suit herein;
“3. For such other and further relief as to this Court may seem meet and equitable under the circumstances;”
It may be that plaintiff seeks damages at law; it may be that specific performance is sought. Of course, a plaintiff who is seeking to enforce the contract and recover the balance due on the purchase price must plead and prove performance on his part. J. M. Hamilton Co. v. Battson, 99 Mont. at 592, 44 P.2d at 1067-68. Plaintiff in the instant case has yet to plead its performance of the contract, but amendment to the pleadings will accomplish this. Proof of performance was not made because the case was submitted on an agreed statement of facts; but those, too, may be amended to conform to this requirement.
There is no request for specific performance, as such. The prayer appears to be one requesting damages for breach of contract. A request for a money judgment for the balance of the purchase price which may be awarded in an action at law has been deemed identical to a decree of specific performance, which requires the buyer to pay the balance of the purchase price. See Renard v. Allen, 237 Or. at 408, 391 P.2d at 778, relying on 3 Casner, American Law of Property 176, § 11.68 (1952). That being so, once the buyers have paid the money judgment, the seller must convey the title to the property. Such would be required if the decree were of specific performance; and since the money judgment has been deemed identical to a decree for specific performance, the money judgment carries with it the same requirement that the seller perform.
There being no question of fact in this case and plaintiff being entitled to judgment as a matter of law, the judgment is reversed.
MR. CHIEF JUSTICE HASWELL and JUSTICES DALY and SHEA concur.
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JUSTICE TRIEWEILER
delivered the opinion of the Court.
This is an appeal from the order of the District Court of the Twentieth Judicial District, Lake County, denying defendants’ motion to dismiss plaintiff’s complaint. We affirm the District Court.
The sole issue is whether the District Court erred in its determination that filing of the complaint tolled the statute of limitations until the plaintiff was subsequently certified as a foreign corporation authorized to do business in Montana, pursuant to § 35-1-1004, MCA.
Watson & Associates, Inc., an Arizona corporation, filed an action alleging professional negligence, breach of fiduciary duty, and breach of the covenant of good faith by the defendants. The complaint was filed on January 13, 1988, and defendants were served with the summons in January 1989. On April 17, 1989, defendants moved to dismiss the complaint on the grounds that plaintiff was not a foreign corporation qualified to do business in Montana under § 35-1-1004, MCA (1989). Plaintiff received its certificate of authority to do business in Montana on March 21, 1983, but allowed the certificate to lapse on November 2, 1987. It contends that it did so because it was no longer transacting business in Montana.
Plaintiff reobtained its certificate on May 2, 1989. The motion to dismiss was argued on May 9, 1989. At that hearing, defendants stated additional grounds for their motion. They alleged that the statute of limitations had run prior to the time that plaintiff reobtained its certificate of authority. On August 9, 1991, the District Court issued an order denying defendants’ motion to dismiss. The order was certified for appeal pursuant to Rule 54(b), M.R.Civ.R Defendants appeal that certified order.
Defendants contend that the District Court erred in its conclusion that the statute of limitation for legal malpractice contained in § 27-2-206, MCA, was tolled when plaintiffs complaint was filed on January 13, 1988. Defendants assert that plaintiff had no authority to commence an action in Montana until it reacquired its certificate of authority to conduct business, pursuant to § 35-1-1004(1), MCA (1989). That statute states:
(1) No foreign corporation transacting business in this state without a certificate of authority shall be permitted to maintain any action, suit, or proceeding in any court in this state until such corporation shall have obtained a certificate of authority. Nor shall any action, suit, or proceeding be maintained in any court of this state by any successor or assignee of such corporation on any right, claim, or demand arising out of the transaction of business by such corporation in this state until a certificate of authority shall have been obtained by such corporation or by a corporation which has acquired all or substantially all of its assets.
(2) The failure of a foreign corporation to obtain a certificate of authority to transact business in this state shall not impair the validity of any contract or act of such corporation and shall not prevent such corporation from defending any action, suit, or proceeding in any court of this state. [Emphasis added.]
It is significant that § 35-1-1004(1), MCA, uses the term “maintain” in reference to actions or suits. The majority of courts having addressed the issue of the meaning of “maintain” have determined the term to be distinguishable from the terms “commence” or “institute.” These courts have concluded that “maintain” means to continue an action that has already begun, and not to prohibit an action from being initiated.
In Charles W. Smith and Sons Excavating, Inc. v. Lichtefeld-Massaro, Inc. (Ind. 1985), 477 N.E.2d 308, the Indiana Court of Appeals, faced with a statute similar to § 35-1-1004(1), MCA, stated:
Afundamental rule of statutory interpretation is that words and phrases should be given their plain, ordinary, and usual meaning. [Citation omitted.] Black’s Law Dictionary, 5th Ed. 1979 provides:
To “maintain” an action is to uphold, continue on foot, and keep from collapse a suit already begun, or to prosecute a suit with effect. George Moore Ice Cream Co. v. Rose, Ga., [1933,] 289 U.S. 373, 53 S.Ct. 620, 77 L.Ed. 1265. To maintain an action or suit may mean to commence or institute it; the term imports the existence of a cause of action. Maintain, however, is applied to actions already brought, but not yet reduced to judgment. Smallwood v. Gallardo, [1929,] 275 U.S. 56, 48 S.Ct. 23, 72 L.Ed. 152. In this connection it means to continue or preserve in or with; to carry on.
... Accordingly, attention must be given to those earlier cases interpreting “maintain” in the context of “to maintain any suit or action of law or in equity upon any claim, legal or equitable ...” Our review reveals that historically the appellate courts have held that the language of the statute is not to operate as a bar to action once commenced but merely means to suspend further legal proceedings until such time as the statutory provisions have been complied with. [Citations omitted.]
... Accordingly, we reverse the trial court’s order dismissing this cause of action. We hold that the failure of a plaintiff foreign corporation to obtain a Certificate under I. C. 23-1-11-14 by the date of the filing of its complaint in Indiana courts merely suspends rather than bars further legal proceedings until such time as the Certificate is obtained.
Smith, 477 N.E.2d at 309-10.
In Oxford Paper Co. v. S. M. Liquidation Co. (1965), 257 N.Y.2d 395, the court contrasted “maintain” and “commence.” The court stated:
Section 1312 of the New York Business Corporation Law does not provide that a foreign corporation doing business in this state without authority may not “commence” an action here, or that such an action, if instituted, shall be forthwith dismissed. The provision is that such a plaintiff may not “maintain” an action in this state, and that is so “unless and until such corporation has been [so] authorized * * * and it has paid to the state all fees, penalties and franchise taxes for the years or parts thereof during which it did business in this state without authority’. Thus, it would seem that, upon receipt of such authority and upon payment of such sums, an action previously commenced may be maintained.
If I am correct in my view that “maintain” should not be narrowly construed to mean “commence,” it is a fortiori obvious that, if it be shown, as here, that the foreign corporation doing business in this state had the requisite authority before the institu tion of suit, it may continue to maintain the action and invoke the remedies of the law provided for its prosecution or conclusion.
Oxford, 257 N.Y.S.2d at 399-400.
Section 35-1-1004, MCA, is taken from the Model Business Corporation Act, as proposed by the American Bar Association in 1960. In the Official Comments to the Act, § 117 states:
If suit has been instituted prior to qualification, the corporation may then qualify and continue its litigation without the necessity of refiling suit after qualification, which may be important if a statute of limitations is involved.
The weight of authority, along with comments from the authors of the section we are interpreting, supports the decision of the District Court. Section 27-2-206, MCA, prohibits the “commencement” of suit after three years from the date of occurrence. Had the Montana Legislature wished to prohibit the commencement of suits by non-authorized corporations, it would have expressly declared its intentions by statute. It did not do so. The District Court correctly interpreted the statute to allow the commencement of suit by Watson & Associates, which it did in a timely manner. The effect of § 35-1-1004(1), MCA, is to suspend the proceedings once suit has been filed until the statute has been complied with, and then allow the suit to go forward.
Accordingly, we affirm the District Court.
CHIEF JUSTICE TURNAGE, JUSTICES HARRISON, HUNT, GRAY, McDONOUGH and WEBER concur.
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On May 20,1992, the Defendant was sentenced to forty (40) years with twenty (20) years suspended for Sexual Intercourse Without Consent. The Defendant shall be placed on formal supervised probation with the Adult Probation and parole Bureau and shall obey the rules and regulations thereof. The Defendant shall successfully complete the Sex Offender Program and shall submit to and complete drug and alcohol counseling. Plus abide by all other conditions set out the in May 20, 1992 Judgment. The Defendant shall be designated as a dangerous offender for the purposes of parole eligibility.
On March 12, 1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and proceeded pro se. The state was represented by Patrick Paul, County Attorney from Great Falls, Montana.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he wished to have the proceedings continued.
After careful consideration the motion to continue was granted and David Azure will be placed on the May, 1993 Sentence Review calendar.
The reason for the continuation is to allow the Defendant sufficient time to obtain counsel.
Hon. Robert Boyd, Acting Chairman, Hon. John Warner, and Hon. James Purcell, Judges
|
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On March 29,1993, the Defendant was sentenced to twenty (20) years for Burglary. Dangerous Designation. In the event the Defendant is granted parole the following are to be imposed as conditions of his early release from prison: (1) the Defendant must pay restitution of $3,141.50; (2) the Defendant must obtain, and remain, gainfully employed; and (3) the Defendant may not reside in, or otherwise have physical contact with, Flathead County, Montana.
On July 23,1993, the Defendant’s application for review of that sentence was heard by the Sentence Review Division of the Montana Supreme Court.
The Defendant was present and appeared pro se. The state was not represented.
Before hearing the application, the Defendant was advised that the Sentence Review Division has the authority not only to reduce the sentence or affirm it, but also to increase it if such is possible. The defendant was further advised that there is no appeal from a decision of the Sentence Review Division. The defendant acknowledged that he understood this and stated that he is on codeine and unable to adequately represent himself. Therefore, he requested a continuance.
The Sentence Review Board considered the Defendant’s request and concluded that the codeine might affect his reasoning. The motion for continuance is granted. This case will be set for the September, 1993, docket and Mr. Johnson must obtain counsel by that time, or he can represent himself. No further continuance will be granted.
Hon. Thomas McKittrick, Chairman, Hon. G. Todd Baugh, and Hon. John Warner, Judges
|
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PER CURIAM:
This is an appeal by plaintiff Hugh R. Adair II as administrator of the estate of Hugh R. Adair, from a portion of a judgment rendered in a quiet title action.
Plaintiff alleges that in 1947 Hugh R. Adair, late Justice of the Montana Supreme Court, purchased certain real property located in Helena, Montana. However the identity of the party furnishing the consideration for the purchase was never firmly established.
Included in the property purchased was a three-quarter interest in Lots 9 through 16 in Block 35 of the C. W. Cannon Addition to the city of Helena.
After the lots were purchased, they were placed in the name ■of Judge Adair’s mother-in-law, Ruth L. Janes. Mrs. Janes subsequently received a deed to the property.
No improvements were made on the lots and they were rarely used except in the wintertime when the.Judge would take his young son, Hugh R. Adair II, to the property for tobogganing and skiing.
Judge Adair personally paid the taxes on the property until 1969 when he suffered a severe stroke and was incapacitated. Hugh R. Adair II, his son, was then appointed as his guardian and paid the taxes on the property as the guardian and later as the administrator of the estate after Judge Adair died in 1971.
In 1949, Ruth L. Janes died intestate and left as her heirs a son, Virgil Janes, and one daughter, Dorothy Nahrgang. Jeanice Adair, another daughter of Ruth L. Janes, had been the wife of Judge Adair and was the mother of Hugh R. Adair II, plaintiff in this action. Jeanice Adair predeceased her mother.
Virgil Janes died in 1970 and left as his heirs, his wife Hazel Janes and two sons, Robert and Gary Janes, all of whom are defendants in this action. Prior to this action, Dorothy Nahrgang transferred her interest in the property to Hugh A. Adair II, so her interest is not in dispute.
Plaintiff Hugh R. Adair II brought a quiet title action contending that a resulting trust had arisen in favor of Judge Adair because of section 86-103, R.C.M.1947, which states:
“When a transfer of real property is made to one person, ' and the consideration thereof is paid by or for another, a trust is presumed to result in favor of the person by or for whom such payment is made.”
Thus, plaintiff argues that a resulting trust had arisen in favor of Judge Adair and as the only heir he is entitled to the property free from the claims of defendants, because Judge Adair had furnished the consideration for the purchase of the property and placed the title to the property in the name of Ruth L. Janes.
In support of his claim plaintiff offered into evidence a letter written by Judge Adair to the county commissioners of Lewis and Clark County which protested the assessed value of several parcels of property, including the property in dispute. Defendants interposed a hearsay objection to this letter which was sustained after memordanda were filed and arguments were heard.
After making findings of fact and conclusions of law, the district court held that no resulting trust had arisen because the evidence was not “clear, convincing and satisfactory and practically free from doubt”, a requirement stated by this Court in McQuay v. McQuay, 81 Mont. 311, 263 P. 683.
The district court then entered judgment, a portion of which granted Hugh R. Adair II an undivided two-thirds of an undivided three-quarter interest in Lots 9 through 16 of Block 35 of the C. W. Cannon Addition to the City of Helena. The judgment reflects plaintiff’s one-third interest as an heir of Jeanice Adair, and a one-third interest as a result of the con veyance from Dorothy Nahrgang. The remaining one-third interest in the property was quieted in favor of Hazel Janes and her two sons, Gary and Robert.
Plaintiff appeals from this judgment and presents three issues to this Court for review:
1. Is plaintiff’s claim barred by laches?
2. Did the district court err in holding that no resulting trust had arisen in favor of Judge Adair?
3. Did the district court err in sustaining a hearsay objection to the letter written by Judge Adair protesting the assessed value of the property in dispute?
We believe this case can be decided by a holding on the issue of laches, therefore we will not discuss the second and third issues.
This Court has examined the equitable doctrine of laches on numerous occasions, particularly in its application to attempts to assert the existence of a resulting trust. In Riley v. Blacker, 51 Mont. 364, 370, 152 P. 758, 759, this Court stated:
“Laches, considered as a bar independent of the statute of limitations, is a concept of equity; it means negligence in the .assertion of a right; it is the practical application of the maxim, ‘Equity aids only the vigilant’; and it exists when there has been unexplained delay of such duration or character as to render the enforcement of the asserted right inequitable. Therefore has it often been held by this court that: While .a mere delay short of the period of the statute of limitations does not of itself raise the presumption of laches [citing cases], yet ‘good faith and reasonable diligence only can call into activity the powers of a court of equity, and, independently of the period fixed by the statute of limitations, stale demands will not be entertained or relief granted to one who has slept upon his rights. Considerations of public policy and the difficulty of doing justice between the parties are sufficient to warrant a court of equity in refusing to institute an investigation where the lapse of time in the assertion of the claim is such as to show inexcusable neglect on the part of the plaintiff, no matter how apparently just his claim may be; and this is particularly so where the relations of the parties have been materially altered in the meantime.’ [citing cases]. What constitutes a material change of condition has been the subject of much judicial discussion and some judicial dissension; but whatever doubt there may be as to other circumstances, it never has been questioned, to our knowledge, that the death of one of the parties to the transaction is such a change.”
Riley is frequently cited to illustrate the proper application of the doctrine of laches. See: Clary v. Fleming, 60 Mont. 246, 198 P. 546 (1921); First State Bank of Philipsburg v. Mussigbrod, 83 Mont. 68, 271 P. 695 (1928); Lewis v. Bowman, 113 Mont. 68, 121 P.2d 162 (1942); Barrett v. Zenisek, 132 Mont. 229, 241, 315 P.2d 1001 (1957); and Lowrance v. Gunderson, 157 Mont. 532, 487 P.2d 511 (1971).
In Barrett an action was brought to establish a resulting trust with respect to certain real property. The district court held the claim was barred by laches. In affirming the district court, this Court stated:
“It has frequently been stated by this court that the doctrine of laches is especially applicable in those cases where there has been a change of circumstances, or where the positions of the parties have been materially altered. This court has gone on to say that the death of one of the parties or a material witness is such a change of position warranting the application of the equitable bar — laches, [citing cases].”
The rationale of Barrett is pertinent to the instant case. Both of the principal parties to the disputed transaction are now dead. Ruth L. Janes died in 1949 and Judge Adair died in 1971. Virgil Janes and Jeanice Adair, whose testimony might have clarified the transaction, are also dead. The death of these parties clearly warrants the application of the equitable doctrine of laches.
Equity cannot be brought to the aid of those who have slept on their rights for twenty-four years. Considerations of public policy and the difficulty of doing justice between the parties require us to hold that the claim is barred by laches, especially since the principal parties to the transaction are now dead and facts relating to the transaction has been obscured through the passage of time.
Judgment is affirmed.
|
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JUSTICE HARRISON
delivered the Opinion of the Court.
This is an interlocutory appeal from an order of the Fifth Judicial District Court, Beaverhead County, Montana, denying the appellant’s request to compel discovery of the respondent’s personnel files from the Catholic Diocese. We affirm.
The issue on appeal is whether the District Court abused its discretion in refusing to grant the State’s motion to discover the Catholic Diocese’s personnel records concerning the respondent in a criminal case after the District Court conducted an in camera inspection.
Defendant and respondent, George Bums (Bums) was charged with Deviate Sexual Conduct under § 45-5-505(1), MCA (1989), and Deviate Sexual Conduct Without Consent under § 45-5-505(3), MCA (1989). Burns pled not guilty and later presented the prosecution with a list of approximately fifteen character witnesses. The prosecution applied for an investigative subpoena to obtain Bums’ personnel records from the Catholic Diocese in Helena. The State purportedly sought information regarding reports of similar instances of misconduct, disciplinary actions, transfer records, as well as witness names to use in rebutting and cross-examining Burns’ character witnesses. The Honorable Dorothy McCarter issued the subpoená which was served on Father John Robertson (Robertson), Chancellor of the Catholic Diocese of Helena. On the advice of counsel, Robertson refused to surrender the personnel records. Judge McCarter’s order dated September 27,1991, indicated that the parties agreed to an in camera review of the records in question on September 23, 1991. Accordingly, Judge McCarter ordered the in camera inspection by the presiding trial judge, the Honorable Thomas A. Olson.
Several telephone conferences ensued between Judge Olson and the parties. Due to the dispute over whether to reveal the contents of the personnel records maintained by the Catholic Diocese, the District Court conducted an in camera inspection of Burns’ personnel file on September 25, 1991. After hearing oral arguments, Judge Olson ruled that the information was not discoverable since it contained personal and private information and returned the records to the Diocese of the Catholic Church in Helena.
The State initiates this interlocutory appeal alleging that Judge Olson erred in barring discovery of the records. The State maintains that unfair prejudice attaches because the file could contain reports of other similar related acts and relevant disciplinary proceedings against Burns which would qualify as other crimes, wrongs or acts evidence. Further, the State alleges that lack of access to Bums’ personnel records is prejudicial since they may contain the names of witnesses who can rebut Bums’ character witnesses.
An in camera review is a device often used at various stages throughout discovery and trial. The purpose of the proceeding is to balance the privacy interests of the parties and the need to know. The in camera procedure can effectively offer protection to both parties by avoiding needless exposure of potentially harmful information. In State v. Thiel (1989), 236 Mont. 63, 768 P.2d 343, the in camera procedure was used to determine whether the contents of a social worker’s file should remain private. We determined that the in camera procedure protected privacy rights. Thiel, 236 Mont. at 67-68, 768 P.2d at 345-46. In State v. Mix (1989), 239 Mont. 351, 781 P.2d 751, the in camera device was used to preview potentially damaging information before it was released. In Mix, medical records were sought for proof of character evidence. The trial court refused the request for access to the medical records after an in camera inspection on the grounds that the subject matter was irrelevant and too remote to the case. Mix, 239 Mont. at 360, 781 P.2d at 756. In In re Lacy (1989), 239 Mont. 321, 780 P.2d 186, we determined that the in camera procedure should be used to decide what information could be properly discovered. Lacy, 239 Mont. at 326, 780 P.2d at 189.
Accordingly, we conclude in the case at bar, that the District Court properly utilized the in camera procedure to weigh the effects of allowing discovery of the information contained in Burns’ personnel files maintained by the Catholic Diocese.
While discovery is meant to be a broad tool in facilitating the resolution of lawsuits, it is not without restraint.
The ability to question adverse witnesses, however does not include the power to require the pretrial disclosure of any and all information that might be useful in contradicting unfavorable testimony. Pennsylvania v. Ritchie (1987), 408 U.S. 39, 53, 107 S.Ct. 989, 999, 94 L.Ed.2d 40, 54.
State v. Reynolds (1990), 243 Mont. 1, 8, 792 P.2d 1111, 1115.
The scope of discovery in criminal matters has been addressed by the American Bar Association as follows:
In order to provide adequate information for informed pleas, expedite trials, minimize surprise, afford opportunity for effective cross-examination, and meet the requirements of due process, discovery prior to trial should be as full and free as possible consistent with protection of persons, effective law enforcement, the adversary system, and national security.
ABA Discovery and Procedure Before Trial, § 1.2 (1974).
When discovery of documents such as personnel records are at issue, privacy rights are -undoubtedly at stake. Montana adheres to one of the most stringent protection of its citizens’ right to privacy in the country. Mont. Const. Art. II, § 10. Montana’s treatment of privacy rights is more strict than that offered by the Federal Constitution. Montana Human Rights Division v. City of Billings (1982), 199 Mont. 434, 439, 649 P.2d 1283, 1286. It is against this constitutional backdrop that we view the case at bar.
The privacy interest in Burns’ personnel records at the Catholic Diocese must be weighed against the State’s need to discover the same. On appeal we seek to review whether the District Court adequately weighed and balanced these competing interests. On September 25,1991, during an on the record, in camera review of the contents of Bums’ personnel records, Judge Olson said:
I find a document that is marked confidential, to be opened by the Bishop of the Diocese only. I open this with reluctance. All right. The Court has in summary fashion reviewed the documents. I will say on the record, I consider these to be highly personal documents, private documents of the Diocese. I will accord the State and the defendant the hearing if the State pursues that. And my impression here, which I state to the representative of the Diocese, that these documents will not be disclosed.
On September 27, 1991, after hearing oral arguments Judge Olson stated:
The Court has heard the arguments of counsel and I make the following ruling. The evidence seized by the investigative sub poena, or which is the subject of the investigative subpoena, is hereby returned to the Diocese of Helena intact, without disclosure to the State or the defendant. I do that upon the grounds that the Diocese has compelling rights of privacy to its personnel files and all of the documents contained therein. The file is clearly marked to be private .... We have the strongest privacy laws in this state of all of the states, and I find that the State cannot show compelling interest to crack open private church documents such as these. So, they are suppressed — returned to the Diocese — found to be off limits in this particular matter.
In Montana, we have adopted a two-prong test to determine whether issues of privacy are protected under our Constitution as follows:
1) Whether the person involved had a subjective or actual expectation of privacy; and,
2) Whether society is willing to recognize that expectation as reasonable.
State ex rel. Great Falls Tribune Co. v. Eighth Judicial Dist. Court (1989), 238 Mont. 310, 318, 777 P.2d 345, 350, citing Montana Human Rights Division v. City of Billings (1982), 199 Mont. 434, 441, 649 P.2d 1283, 1287.
This test was used in Missoulian v. Board of Regents (1984), 207 Mont. 513, 675 P.2d 962. In Missoulian v. Board of Regents, “the Board of Regents was required to balance the public’s right to know against the individual’s right of privacy with respect to employment evaluations. There the right of the individual privacy was held to be paramount.” Tribune, 238 Mont. at 319, 777 P.2d at 350.
While the two-prong test was not specifically set forth by Judge Olson, it is apparent from his comments in the record that the test is satisfied, barring discovery of Bums’ personnel records.
The case at bar is similar to Mix, in that the State seeks leads relating to character evidence, as well as information about prior acts of misconduct such as disciplinary proceedings. As in Mix, an in camera inspection was conducted to weigh the interests of the parties. The record indicates that Judge Olson reviewed the personnel records and concluded that the right to privacy outweighed the State’s need for any information contained in the records. Whether applying the two-prong test or the principles of Mix to the case at bar, we find that the District Court acted appropriately and did not abuse its discretion.
We note that Judge Olson’s final comment in the previous recita tions on the record is particularly informative. He stated that the personnel records would be off limits “in this particular matter.” This is important since there is not blanket unavailability of personnel records nor should the outcome of this appeal point to that end. Personnel records may be discoverable given the correct set of circumstances and after appropriate balancing tests are considered which may include the in camera procedure previously discussed. For instance, in Montana Human Rights v. Billings, access to employment records was granted to the Human Rights Division to investigate possible violations of discrimination. However, when granting such access, we insisted on specific protective measures to prevent dissemination of the discovered information. Montana Human Rights v. Billings (1982), 199 Mont. 434, 446, 649 P.2d 1283, 1290. The right to know the names of disciplined employees was greater than their right to privacy in Great Falls Tribune v. Sheriff (1989), 238 Mont. 103, 775 P.2d 1267. In Tribune v. Sheriff we said:
When we balance the limited privacy interest of the law enforcement officers against the public’s right to know which officers have been disciplined for unlawful acts, we conclude that the District Court was correct. The privacy interest of the officers does not clearly exceed the public’s right to know. We note that we are not ruling that the entirety of any personnel files must be revealed.
Tribune v. Sheriff, 238 Mont. at 107, 775 P.2d at 1269.
We also mention that we fail to see how the State’s alleged prejudice is created particularly with regard to the discovery of rebuttable character witnesses. Certainly, the State may research and locate witnesses to rebut Burns’ character bolstering witnesses and while access to Bums’ personnel records maintained by the Catholic Diocese may or may not expedite this process, the file is not the only means of locating these witnesses.
Absent an abuse of discretion we will uphold the rulings of the district court. “District courts have the discretionary power to control discovery activities in cases pending before them. We will overturn a district court order affecting discovery only if it amounts to an abuse of discretion.” State of Or. ex rel. Worden v. Drinkwalter (1985), 216 Mont. 9, 12, 700 P.2d 150, 152. In the case at bar, the District Court considered the possible effects of releasing the Catholic Diocese’s personnel records concerning Bums and consequently, ordered an in camera review of the file for relevant information. After the in camera review the District Court heard arguments regarding exposing the contents of the file and determined that such exposure was improper. Prohibiting discovery of materials that are not probative is one of the functions of trial judges which is within their discretionary powers. In the case at bar, Judge Olson properly utilized his discretionary powers to prohibit discovery of Burns’ personnel records. The competing interests of the parties were properly weighed by the District Court.
We affirm.
CHIEF JUSTICE TURNAGE and JUSTICES HUNT, McDONOUGH, WEBER and TRIEWEILER concur.
Judge Olson took over the case after the presiding District Judge, the Honorable Frank M. Davis from Dillon recused himself.
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MR. CHIEF JUSTICE JAMES T. HARRISON
delivered, the Opinion of the Court.
This case involves a strike by approximately 285 teamsters: operating engineers, machinists, laborers, (,and painters employed by appellant Montana Department of Highways to> perform all highway maintenance functions on interstate, primary, and certain secondary roads in the Butte, Great Falls,. Missoula, Bozeman, and Helena areas. These employees were responsible for the repair, reconditioning, and general upkeep of roughly 3,000 miles of roads. Their major duties were: removing snow and ice from the traveled surfaces and applying traction materials such as sand and chemicals; patching, resurfacing, and regrading road surfaces; repairing bridges and other highway structures; repairing, replacing, or installing snow fences, culverts, ditches, fences, traffic safety de ■vices, signs and signals, guardrails, and traffic delineators within right-of-way limits; stockpiling traction materials for snow season use; repairing and maintaining roadside rest areas, litter barrels, and campsites; repairing and maintaining state motor pool vehicles, snow plows, road patrols, caterpillars, and other equipment utilized in appellant’s maintenance operations; and performing services during emergencies, such as assisting stranded motorists, removing obstructions (over-turned vehicles, rock slides, etc.), and providing traffic control. Of necessity, these activities were performed on a 24-hour basis.
The strike by respondent Public Employees Craft Council against appellant occurred on January 21, 1974, and appellant applied to the district court of Lewis and Clark County the same day for a temporary restraining order prohibiting the strike. The district court granted appellant’s request and scheduled a show cause hearing to determine whether the strike should be permanently enjoined. Eespondent filed a motion to dismiss appellant’s complaint, and a show cause hearing thereon was scheduled for March 28, 1974.
At the hearing on the motion to dismiss, the allegations contained in appellant’s complaint — including those relating to disruption of highway maintenance programs and injury to the health, safety, and welfare of the traveling public — were admitted. It should be noted here, however, that the issues before us and discussed hereafter in this opinion, do not involve injury to the health, safety and welfare of the traveling public. Nevertheless, the district court granted the motion to dismiss and dissolved the temporary restraining order. Appellant appeals from that order.
There is but one issue: Did the district court err in determining that the maintenance employees of the Montana Department of Highways have the right to strike under Montana’s Public Employees Collective Bargaining Act?
The portion of the Public Employees Collective Bargaining Act in dispute, section 59-1603(1), E.C.M.1947, provides:
“Public employees shall have, and shall be protected in the exercise of, the right of self-organization, to form, join or assist any labor organization, to bargain collectively through representatives of their own choosing on questions of wages, hours, fringe benefits, and other conditions of employment and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, free from interference, restraint or coercion.” (Emphasis added).
This language is almost identical to that found in the Labor Management Relations Act (Taft-Hartley Act), 1947, which at 29 U.S.C.A. § 157, provides:
“Employees shall have the right to self-organization, to> form, join, or assist in labor organizations, to bargain collectively through representatives of their own choosing, and to-engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection * # (Emphasis added).
The phrase “concerted activities” does not appear in any other Montana statute, and this Court has never been called upon to interpret it. The phrase first appeared in the NorrisLaGuardia Anti-Injunction Act, 1932, at 29 U.S.C. § 102; then, in the National Labor Relations Act ("Wagner Act), 1935, at 49 Stat. 449, 452; and again in the Taft-Hartley Act, 1947, 29 U.S.C.A. § 157.
Consequently, some forty years of federal interpretation is behind this language. The United States Supreme Court, as well as innumerable lower federal courts, has consistently held that “concerted activities” includes strikes. Automobile Workers v. O’Brien, 339 U.S. 454, 70 S.Ct. 781, 94 L.Ed. 978; Bus Employees v. Wisconsin Board, 340 U.S. 383, 389, 71 S.Ct. 359, 95 L.Ed. 364; Weber v. Anheuser-Busch, 348 U.S. 468, 75 S.Ct. 480, 99 L.Ed. 546. These cases all involved state legislative attempts to limit the right to strike in the private sector. The Supreme Court found such efforts to be in conflict with the protections afforded by the Taft-Hartley Act and thus uncon stitutional under the Supremacy Clause (Article VI) of the United States Constitution. In Bus Employees, the Supreme Court stated:
“We have recently examined the extent to which Congress has regulated peaceful strikes for higher wages in industries affecting commerce. International Union of Automobile Workers v. O’Brien, 339 U.S. 454, 70 S.Ct. 781, 94 L.Ed. 978 (1950). We noted that Congress, in § 7 of the National Labor Relations Act of 1935, as amended by the Labor Management Relations Act of 1947, expressly safeguarded for employees in such industries the 'right * # * to engage in * * # concerted activities for the purpose of collective bargaining or other mutual aid or protection,’ ‘e.g., to strike.’ ”
Appellant contends that a different interpretation of “concerted activities” ought to prevail here, since public rather than private employees are involved. The California Supreme Court considered the same proposition in Los Angeles Metropolitan Transit Authority v. Brotherhood of Railroad Trainmen, 54 Cal.2d 684, 8 Cal.Rptr. 1, 355 P.2d 905, 907. In that case the Los Angeles Metropolitan Transit Authority Act created a public authority for transportation of passengers in a four county area in and around Los Angeles. Stats.1957, ch. 547, as amended by Stats.1959, eh. 519, Subdivision (c) of section 3.6 of that Act provided that employees of the Transit Authority had the right, among others, to engage “in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” When the employees struck, the Transit Authority sought a declaratory judgment that they were without the legal right to strike because they were public employees. The court held unequivocally that the grant of the right to engage in “concerted activities” meant the same thing for public employees as it did for private employees, that is, it included the right to strike:
“When legislation has been judicially construed and a subsequent statute on the same or an analogous subject is framed in the identical language, it will ordinarily be presumed that the Legislature intended that the language as used in the later enactment would be given a like interpretation. This rule is applicable to state statutes which are patterned after federal statutes. [Citing cases] Although the cases which have interpreted the italicized words involved private employees, the act before us incorporates the exact language, consisting of 16 words, found in the earlier statutes, and it is unlikely that the same words would have been repeated without any qualification in a later statute in the absence of an intent that they be given the construction previously adopted by the courts.”
We think similar standards of judicial construction apply in the present case. For example, section 19-102, R.C.M.1947, provides:
“Words and phrases used in the codes or other statutes of Montana are construed according to the context and the approved usage of the language; but technical words and phrases, and such others as have acquired a peculiar and appropriate meaning in law, or are defined in the succeeding section, as amended, are to be construed according to such peculiar and appropriate meaning or definition.” (Emphasis added).
After more than forty years of construction by federal and state courts, “concerted activities” indisputably has become a labor law term, a technical phrase which has “acquired a peculiar an'd appropriate meaning in law”. That meaning includes strikes.
Appellant may wish that the statute read otherwise but this Court is not at liberty to amend our statutes. State v. Midland National Bank, 132 Mont. 339, 343, 317 P.2d 880. This Court concludes that Montana’s legislature meant the phrase “concerted activities” to have a meaning identical to that found in analogous statutes of other jurisdictions. To hold otherwise would flaunt a cardinal principle of statutory construction.
This conclusion is reinforced by the fact that employees under Montana’s Collective Bargaining Act, Sections 59-1601 through 59-1616, R.C.M.1947, are nowhere prohibited from striking. Two other classes of Montana public employees— nurses and teachers — have specific restrictions or bans on their right to strike. See sections 41-2209 and 75-6120(2) (c), R.C.M. 1947.
We comment further that the purposes expressed in the nurses, teachers and public employees acts are similar. As to the nurses, section 41-2201, R.C.M.1947, enacted in 1969, the purpose was expressed “* # * to encourage the practice of mutually and peacefully agreeing upon the establishment and maintenance of desirable employment practices * *
In the teachers act, section 75-6116, R.C.M.1947, enacted in 1971, the purpose was expressed “* * * to establish procedures which will facilitate and encourage amicable settlement of disputes.”
In the public employees act, section 39-1601, R.C.M.1947, enacted in 1973, the purpose was expressed “* * * to encourage the practice and procedure of collective bargaining to arrive at friendly adjustment * #
If the legislature had intended to limit respondent’s right to strike, it could have done so expressly as it did with nurses and teachers, since as heretofore shown all this legislation had the same expressed purpose.
Since respondent had the right to strike specifically granted its members by the legislature, the order of the district court dismissing the complaint and dissolving the temporary restraining order is affirmed.
MR. JUSTICES DALY, HASWELL, CASTLES and JOHN C. HARRISON concur.
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JUSTICE NELSON
delivered the Opinion of the Court.
Katharine and Phil Durbin (the Durbins) appeal from the Montana Twentieth Judicial District Court, Sanders County, order granting summary judgment in favor of Barbara Ross, Ross Realty, Lynne Piazzola (the Realtors) and dismissing the Durbins’ claims against the Realtors. We reverse and remand.
ISSUES
1. Did the District Court err in ruling that the Durbins failed to establish a standard of care through the expert testimony of a real estate broker?
2. Should this Court direct the District Court on the admissibility of expert standard of care testimony?
BACKGROUND
The parties agreed to the following facts in the pretrial order:
1. Plaintiffs Phil and Katharine “Gail” Durbin are husband and wife. On April 26, 1993 the Durbins purchased for the sum of $35,000.00 a piece of property consisting of 20 acres and a single-family residence located at 209 Upper River Road, Heron, Montana (the “Property’) from Defendants Wayne, Rachel and Michael Sherrill, the sellers of the Property.
2. Defendants Wayne and Rachel Sherrill and their children resided on the Property from May of 1987 until they sold the Property to the Durbins. Defendant Michael Sherrill resided on the Property for part of that time.
3. Defendants Lynne Piazzola and Barbara Ross are real estate agents licensed by the State of Montana. Lynne Piazzola is a licensed sales agent and was the listing and sales agent for the sale of the Property to the Durbins. Barbara Ross was the supervising broker for Defendant Piazzola for this sale. Defendants Piazzola and Ross both worked for Ross Realty, a real estate office located in Noxon, Montana. Defendant Ross was the owner of Ross Realty at the time of this sale.
4. This case involves claims by Plaintiffs Durbin that the condition of the Property was misrepresented to them. The Durbins contend, among other things, that the septic system, household water system, and other aspects of the Property were not accurately represented by the Defendants. Defendants Ross and Piazzola deny these contentions. Defendants Ross and Piazzola con tend, among other things, that they did not make any misrepresentations to the Durbins. ...
The Durbins contend that the Realtors told them that 1) the property had a legal septic system with a 750 gallon tank, when there was only a 200 gallon drywell with no drainfield; 2) that the household water was safe for normal household purposes when the water was contaminated with coliform bacteria and was not safe for any household purposes; and 3) that the access road was on the property when it was on the neighbor’s property. The Durbins further contend that the Realtors failed to disclose other serious defects in the home such as the fact that there were no hot water pipes and thus no hot water, that the plumbing drain lines were not connected to the main sewer line and drained directly into the soil in the crawlspace under the home, and that the roof leaked. In summary, the Durbins argue that the Realtors misrepresented that the house was in good condition.
The Realtors dispute the Durbins’ allegations of misrepresentation. The Realtors in fact claim that they performed a diligent inspection of the property and disclosed the information gleaned from that inspection. They also claim that the Sherrills informed the Durbins of the property’s shortcomings and that those shortcomings were reflected in the purchase price.
The Durbins were not represented by an agent in the transaction. Therefore, the Durbins filed a complaint against the Realtors and the Sherrills claiming that they made material misrepresentations about the property, concealed material facts regarding the property, and that the Durbins relied on the information in agreeing to purchase the property. The Durbins disclosed their trial expert on January 31, 1995, but later withdrew that expert witness.
Defendants Wayne Sherrill, Rachel Sherrill, and Michael Sherrill did not appear in the action. Their defaults were entered on February 2, 1994. The Realtors moved for summary judgment on the ground that the Durbins could not prove any of their claims without expert testimony establishing the relevant standard of care. The District Court granted summary judgment in favor of the Realtors and pursuant to Rule 54(b), M.R.Civ.P., certified for immediate appeal its order dismissing all claims against the Realtors. The Durbins appeal the District Court’s determination that for the Realtors to be found liable as individuals for their conduct toward the Durbins, the Durbins must first establish a duty owed by the seller’s broker to the purchasers and that the standard of care relating to such duty and breach thereof must be established by expert testimony as a matter of law.
DISCUSSION
1. Did the District Court err in ruling that the Durbins failed to establish a standard of care through the expert testimony of a real estate broker?
The Durbins contend that the Realtors committed actual fraud and constructive fraud by misrepresenting the condition of the property or, in the alternative, committed negligent misrepresentation by failing to exercise reasonable care in investigating the truth of the information they passed on to the Durbins, violated the Montana Real Estate Licensing Act by misrepresenting facts about the property, and violated the Montana Consumer Protection Act by committing deceptive acts in the conduct of their real estate business. The Durbins argue that standard of care testimony is neither necessary nor relevant to these claims. Specifically, the Durbins argue that they do not have to present expert testimony to establish claims for fraud and claims of statutory violations in this case for two reasons. First, the Realtors did not represent the Durbins in this transaction and thus did not create a professional relationship. Second, the elements of the fraud claims focus on the knowledge and state of mind of the Realtors in this case and not on the standard of care by other professionals and the statutory violations involve the conduct of the Realtors in this case and whether that conduct conformed with statutorily mandated rules. In summary, the Durbins assert that the District Court erred in granting summary judgment because expert testimony is irrelevant to any factual issue required to establish the Durbins’ claims.
In contrast, the Realtors assert that the District Court properly granted summary judgment finding that the gravamen of the Durbins’ claims sounds in negligence and that these claims fail because the Durbins did not establish the appropriate standard of care and breach of that standard. The Realtors further assert that the Durbins had to provide expert testimony to prove duty and breach in a negligence claim against a professional.
We review a grant of summary judgment de novo using the same criteria initially used by the District Court under Rule 56, M.R.Civ.P. Mead v. M.S.B., Inc. (1994), 264 Mont. 465, 470, 872 P.2d 782, 785. Therefore, we determine whether there is an absence of genuine issues of material fact and whether the moving party is entitled to judgment as a matter of law. Mead, 872 P.2d at 785.
The Durbins do not dispute that, were they pursuing a professional negligence claim against their own broker, they would need to produce expert standard of care testimony. They do not assert a professional negligence claim because the Realtors did not represent the Durbins in a professional capacity. Instead, the Durbins assert common law and statutory fraud theories of recovery which do not require proof of the standard of conduct exercised by other brokers. The essence of the Durbins’ claims sound in fraudulent misrepresentation and nondisclosure of material facts concerning the property.
A. Actual Fraud and Constructive Fraud
In Lee v. Armstrong (1990), 244 Mont. 289, 293, 798 P.2d 84, 87, we delineated the 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 it should be 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 injury caused by the reliance on the representation. These elements focus on the knowledge and intent of the broker involved in the transaction. The standard of care exercised by other brokers in similar transactions does not have bearing on what brokers in a specific case know or intend. See e.g., State v. Howard (1981), 195 Mont. 400, 404-05, 637 P.2d 15, 17. In Howard, we held that the jury was as qualified as the doctor to infer the defendant’s intent from the nature of the injuries the defendant inflicted. Howard, 637 P.2d at 17; see also U.S. v. Clapp (8th Cir. 1995), 46 F.3d 795.
In Clapp, the defendant offered expert testimony to show that he had acted without intent to defraud. In holding that expert testimony was not necessary to illuminate the defendant’s intent, the court noted that expert testimony is appropriate when it “relates to issues that are beyond the ken of people of ordinary experience,” but is superfluous where the subject matter is within the knowledge or experience of laypersons. Clapp, 46 F.3d at 802 (quoting United States v. French (8th Cir. 1993), 12 F.3d 114, 116).
We have similarly held that “[t]he test for the admissibility of expert testimony is whether the matter is sufficiently beyond common experience that the opinion of the expert will assist the trier of fact to understand the evidence or to determine a fact in issue.” Jim’s Excavating Service v. HKM Assoc. (1994), 265 Mont. 494, 509, 878 P.2d 248, 257 (construing Rule 702, M.R.Evid.). For example, in Jim’s Excavating, we held that the expert’s opinion was based on the type of data which is reasonably relied on by experts in the accounting field and was not a matter within the common experience of a jury, and that there was adequate opportunity for cross examination. We therefore concluded that the district court did not err in allowing the testimony. Jim’s Excavating, 878 P.2d at 258.
While actual fraud hinges on the knowledge and intent of the defendant, constructive fraud hinges only on the knowledge of the defendant. Lee, 798 P.2d at 88. Courts may invoke constructive fraud as a matter of law to prevent a party from being unjustly enriched as a result of false statements made, even if the false statement is not knowingly made. Lee, 798 P.2d at 88. ‘Withholding relevant facts concerning purchased property can be a fraudulent act. Furthermore, where a vendor by his conduct or words creates a false impression concerning a matter of vital importance to the purchaser, full disclosure of relevant facts may be required.” Lee, 798 P.2d at 88 (quoting Moschelle v. Hulse (1980), 190 Mont. 532, 537, 622 P.2d 155, 159).
In Lee, we further held that
[w]here a contract is induced by false representations as to material existent facts, which are made with the intent to deceive, and upon which the plaintiff relied, it is no defense ... that the party to whom the representations were made might, with due diligence, have discovered their falsity, and that he made no searching inquiry into the facts. .. .
Lee, 798 P.2d at 88. In Lee, we concluded that the district court correctly found that the defendant did not fully disclose all pertinent facts, which constituted constructive fraud.
In the instant case, none of the elements of claims for actual or constructive fraud concerns the standard of care exercised by other real estate brokers. Instead, the elements focus on the knowledge and intent of the broker, issues which juries regularly face and determine without assistance from expert testimony. In summary, expert standard of care testimony is not necessary in the instant case, where the Realtors are held to the same standard as an ordinary citizen in a claim for fraud. In fact, the standard is a common law standard based on the individual knowledge and intent of the defendant, not on the custom or practice of other professionals within the real estate profession. For example, if all brokers lied in order to sell a property, then lying would be a standard industry practice, absolving the brokers from fraud. The Realtors are held to the same standard of care as other citizens of Montana; they may not intentionally or negligently defraud a third party. Accordingly, we hold that expert testimony is not relevant to establishing the Realtors’ duty toward third parties such as the Durbins.
B. Negligent Misrepresentation
In the alternative to their fraud claims, the Durbins assert a claim for negligent misrepresentation against the Realtors. The Durbins base their claim on the Realtors’ alleged failure to exercise the care of a reasonable person in obtaining or communicating information to the Durbins. The Durbins concede that real estate sales is a profession or trade requiring expert testimony if the broker violates a duty to his or her client and the conduct in question is beyond the experience of ordinary laypersons. However, they contend that they did not have a professional relationship with the Realtors, and therefore do not assert a professional negligence claim against them.
The Realtors, on the other hand, argue that the gravamen of the Durbins’ claims sounds in professional negligence and therefore they must provide expert testimony to prove elements of duty and breach in their claim against the Realtors. The Realtors support their argument by citing to Section 229A of the Restatement (Second) of Torts, which provides:
Unless he represents that he has greater or less skill or knowledge, one who undertakes to render services in the practice of a profession or trade is required to exercise the skill and knowledge normally possessed by members of that profession or trade in good standing in similar communities.
Comment c to § 229A of the Restatement states that the rule does not depend on the existence of an enforceable contract between the parties, it applies equally to professional services rendered gratuitously such as a physician treating a charity patient. An undertaking by the defendant serves as the basis of the rule. The Durbins assert that § 229A of the Restatement emphasizes that a professional relationship must exist between the plaintiff and the defendant before the standard of care for similarly situated professionals becomes relevant.
We have held that to establish professional negligence action, the “plaintiffmust prove that the professional owed himaduty, [and] that the professional failed to live up to that duty, thus causing damages to the plaintiff.” Lorash v. Epstein (1989), 236 Mont. 21, 24, 767 P.2d 1335, 1337. For example, in pursuing a negligence action against an attorney, the plaintiff must initially establish the existence of an attorney-client relationship. Lorash, 767 P.2d at 1337. In Lorash, the plaintiff was not able to establish an attorney-client relationship which would impose a duty to foreclose the plaintiff’s mechanic’s lien. Lorash, 767 P.2d at 1337. Similarly, in Carlson v. Morton (1987), 229 Mont. 234, 238, 745 P.2d 1133, 1136, we stated that in any professional negligence action, the plaintiff must prove that the professional owed him a duty and that the professional failed to live up to that duty, causing damages to the plaintiff.
In the instant case, the Realtors did not undertake to represent the Durbins; there was no professional relationship. Any duty the Realtors owed to the Durbins did not arise from a professional relationship. Without a duty arising from a professional relationship, there can be no claim of professional negligence. The Durbins appropriately brought a negligent misrepresentation claim instead of a professional negligence claim.
In State Bank of Townsend v. Maryann’s, Inc. (1983), 204 Mont. 21, 33, 664 P.2d 295, 301, we approved the definition of negligent misrepresentation as contained in Restatement (Second) of Torts § 552. Section 522 provides:
(1) 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 their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.
In considering this definition, we looked to the comments to the Restatement, noting that they state that liability imposed by subsection (1) is based on negligence if and only if the defendant has failed to exercise the care or competence of a reasonable man in obtaining or communicating the information. State Bank of Townsend, 664 P.2d at 302. Moreover, in Thayer v. Hicks (1990), 243 Mont. 138, 149, 793 P.2d 784, 791, we held that an accountant owed a duty of care to third parties with whom he was not in privity of contract but whom he was aware relied on his work product in connection with a particular transaction.
In Wagner v. Cutler (1988), 232 Mont. 332, 757 P.2d 779, the purchaser of residential real estate brought suit against the vendor for defects in the home. The plaintiff contacted a real estate agent in Bozeman who showed plaintiff the house and who represented that the house was well built and according to code. Wagner, 757 P.2d at 781. The plaintiff moved in and subsequently discovered defects in the house such as a hazardous chimney, poor ceiling insulation, a broken sewage pump, and a faulty lawn sprinkler. The plaintiff sued to recover damages under misrepresentation and violation of the duty to inspect and disclose defects. Applying § 552 of the Restatement, we held that the plaintiff purchaser did not have to provide expert standard of care testimony to establish the vendor’s duty. We noted that the test for the admissibility of expert testimony is whether the matter is sufficiently beyond common experience that the opinion of an expert would assist the trier of fact. We held that there was no requirement of specialized knowledge in the negligent misrepresentation claim. The defendant had a duty to obtain and communicate information on the true condition of the house and failed to do so. Therefore, we concluded that the district court properly determined that the defendant failed to use reasonable care. Wagner, 757 P.2d at 783; see also Lunden v. Smith (Or. App. 1981), 632 P.2d 1344.
In Lunden, plaintiff buyers brought suit to rescind their purchase of a lighting fixture business. Lunden, 632 P.2d at 1345. The sellers cross complained against their broker. The appellate court affirmed the district court’s determination that the broker was negligent. Lunden, 632 P.2d at 1346. In so holding, the court disagreed with the broker’s contention that expert testimony was needed to support a finding that his conduct amounted to negligence. Lunden, 632 P.2d at 1347.
The Supreme Court of Arizona similarly held that expert witness testimony was not necessary to establish the reasonableness of a defendant’s investigation of information when that defendant supplied incorrect information. St. Joseph’s Hosp. v. Reserve Life Ins. (Ariz. 1987), 742 P.2d 808, 816-17. In St. Joseph’s, plaintiff, St. Joseph’s Hospital, called the defendant insurer to verify a patient’s coverage. The insurer verified the coverage but later refused to pay the hospital stating that the patient had given the insurer his incorrect height and weight and was subsequently denied coverage. St. Joseph’s, 724 P.2d at 812. The court construed §§ 552 and 229Aof the Restatement of Torts, and specifically quoted comment f to § 552:
The care and competence that the supplier of information for the guidance of others is required under [rule 552, Restatement of Torts] to exercise in order that the information given may be correct, must be exercised in the following particulars. If the matter is one that requires investigation, the supplier of the information must exercise reasonable care and competence to ascertain the facts on which his statement is based. He must exercise the competence reasonably expected of one in his business or professional position in drawing inferences from facts not stated in the information.
St. Joseph’s, 742 P.2d at 816. The court agreed that a plaintiff must supply a professional standard of care for inferences from facts not stated in the information but held that the insurer’s duty to exercise reasonable care not to misstate existing, ascertainable facts need not be established by expert testimony. St. Joseph’s, 742 P.2d at 816.
In the instant case, the Durbins cite to Easton v. Strassburger (Cal. App. 1984), 199 Cal. Rptr. 383, 393, in which the California Court of Appeals also held that expert testimony was not necessary to establish the negligence of the seller’s real estate broker. In Easton, the court held that a real estate broker has a duty to conduct a reasonably competent and diligent inspection of property in order to discover defects for the benefit of the buyer. Easton, 199 Cal. Rptr. at 388. In discussing the negligence action against the brokers, the court noted that
none of the pertinent cases involving allegations of negligence against a real estate broker require expert testimony to establish the standard of care in the real estate industry, or the particular broker’s breach of that standard of care.
Easton, 199 Cal. Rptr. at 392. The court held that expert testimony was not required to establish the standard of care in the real estate industry or the appellant’s breach of that standard because the question of negligence was resolvable by common knowledge and did not turn on facts peculiarly within the knowledge of professional experts. Easton, 199 Cal. Rptr. at 392-93.
Similarly, in the instant case, the question of whether the Realtors negligently misrepresented that there was a legal septic system on the property is a question resolvable by common knowledge and does not turn on a standard peculiarly within the knowledge of an expert witness. The Realtors must exercise reasonable care and competence to ascertain the facts on which their statements were based because they were aware that the Durbins relied on their work product in connection with this real estate transaction. This standard of care does not require expert testimony establishing accepted practice within the real estate profession. Accordingly, we hold that expert testimony was not required to establish a duty and a breach of that duty in the Durbins’ negligent misrepresentation claim.
C. Statutory Claims
The Durbins brought two statutory claims against the Realtors. The Din-bins alleged that the Realtors violated § 37-51-321, MCA, of the Montana Real Estate Licensing Act and §§ 30-14-103 and 133, MCA, of the Montana Consumer Protection Act. The Durbins claim that these statutes set forth the standards the Realtors were required to follow, and thus allow a layperson to determine without expert testimony, whether the Realtors satisfied the requirements of the Acts. The Realtors argue that regardless of the standards set forth in the statutes, the Durbins have the burden, through expert testimony of a licensed real estate broker/agent, to establish the appropriate standard of care and the Realtors’ deviation therefrom.
Section 37-51-321, MCA, sets forth the procedures for revocation or suspension of a real estate broker or salesperson’s license. Specifically, it allows the Board of Realty Regulation to investigate the actions of a real estate broker or a real estate salesperson and revoke or suspend a license when the broker or salesperson has been found guilty of any of the following practices:
(a) intentionally misleading, untruthful, or inaccurate advertising ... (b) making any false promises of a character likely to influence, persuade, or induce; (c) pursuing a continued and flagrant course of misrepresentation or making false promises through agents or salespersons or any medium of advertising or otherwise ....
Additionally, the realty regulations cover grounds for license discipline for acts such as fraud, misrepresentation, or deception. A.R.M. 8.58.419(3X1993). For example, A.R.M. 8.58.419(3)(1993), provides in part:
(i) licensees shall endeavor to ascertain all pertinent facts concerning every property in any transaction in which the licensee acts, so that the licensee may fulfill the obligation to avoid error, exaggeration, misrepresentation, or concealment of pertinent facts;
(ii) licensees who have listed property shall make a prompt, reasonable, visual inspection of any property listed; ...
(iv) licensees shall disclose to principals and third parties all material facts concerning the property of which the licensee has actual knowledge regarding the property ...
Violation of these regulations may be considered by the Board in determining whether the broker failed to meet the generally accepted standard of practice. A.R.M. 8.58.419(1)(1993).
The Durbins contend that a layperson can determine whether a broker has violated these regulations because the determination requires no specialized knowledge. They further assert that the Board of Realty Regulation eliminated the need for expert standard of care testimony to establish unprofessional conduct within the purview of A.R.M. 8.58.419(1993).
Section 37-51-321, MCA, sets forth grounds for revocation or suspension of a real estate license such as making any false promises of a character likely to influence, persuade, or induce or demonstrating unworthiness or incompetency to act as a broker or salesperson. A.R.M. 8.58.419 (1993), articulates acts or omissions that are evidence of acts against the interest of the public. The statute combined with its implementing regulations sets forth comprehensive guidelines for licensed real estate agents and brokers.
We have held that the provisions of the Real Estate Licensing Act establish a standard of conduct to which brokers and salespersons must conform. “If not, they must bear the consequences.” Carnell v. Watson (1978), 176 Mont. 344, 349, 578 P.2d 308, 311. Accordingly, in the instant case, expert testimony was not required because a jury may determine whether the Realtors violated any of the provisions in the regulations or statutes.
The Durbins also brought a claim under the Montana Consumer Protection Act, §§ 30-14-103 and 133, MCA. Section 30-14-103, MCA, states that “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are unlawful.” Section 30-14-133, MCA, delineates that “[a]ny person who purchases or leases goods or services primarily for personal, family, or household purposes and thereby suffers any ascertainable loss of money or property, real or personal ... may bring an individual but not a class action ...”
The Board of Realty Regulations articulates what constitutes an unfair or deceptive act or practice. A.R.M. 8.78.101(1) states that a person engages in unfair or deceptive and therefore unlawful acts or practices when, he or she “makes a false representation as to the characteristics, ingredients, uses, benefits, alterations or quantities of merchandise [or] states that a transaction involves rights, remedies or obligations that it does not involve ...”
A determination of whether the Realtors made a representation and whether that representation was false is clearly within the common knowledge of a layperson. In the instant case, scientific, technical, or other specialized knowledge is not necessary to assist the jury to understand the evidence because the statute and the regulations establish the conduct to which the Realtors must conform regardless of whether other brokers conform to that same conduct. Accordingly, we conclude that the Durbins were not required to provide expert standard of care testimony to establish the relevant statutory violations.
2. Should this Court direct the District Court on the admissibility of expert standard of care testimony?
The Durbins argue that not only do the elements of the claims they asserted not require expert testimony but also that expert testimony is not admissible for any of the claims they asserted. Thus the Durbins contend that the Realtors are precluded from offering expert testimony establishing the standard of care exercised by other real estate brokers in similar transactions. They request this Court to remand their case and direct the District Court to exclude at trial any expert standard of care testimony. The Realtors continue to assert that expert testimony establishing the standard of care and a breach of that standard is not only admissible but also required.
We have long held that issues concerning the admissibility of evidence are within the discretion of the trial court. Cottrell v. Burlington Northern R. Co. (1993), 261 Mont. 296, 301, 863 P.2d 381, 384 (citing Cooper v. Rosston (1988), 232 Mont. 186, 190, 756 P.2d 1125, 1127). “The trial court is vested v/ithgreat latitude in ruling on the admissibility of expert testimony.” Cottrell, 863 P.2d at 384; see also Jim’s Excavating, 878 P.2d at 257.
The fundamental requirements of Rule 702, M.R.Evid., testimony by experts, still apply. Rule 702, M.R.Evid., provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify thereto in the form of an opinion or otherwise.
The Commission Comments to Rule 702, M.R.Evid, note that the rule sets forth two standards. First, the subject matter must be one that requires expert testimony. Expert testimony is required in areas not within the range of ordinary training or intelligence. Newville v. State, Dept. of Family Service (1994), 267 Mont. 237, 257, 883 P.2d 793, 805 (requiring expert testimony establishing standard of care for professional negligence because a jury of laypersons is normally incompetent to pass judgment on standard of care for professionals without the assistance of expert testimony). Second, the particular witness must be qualified as an expert to give an opinion in the particular area of the testimony. Thus, Rule 702, M.R.Evid., implicitly requires a foundation showing that the expert has special training or education and adequate knowledge on which to base an opinion. Cottrell, 863 P.2d at 384. Within the confínes of the rule of evidence, a trial court has broad discretion in determining the admissibility of the evidence. Accordingly, we remand this case for trial leaving the District Court with the discretion to determine the admissibility of expert testimony.
Reversed and remanded.
CHIEF JUSTICE TURNAGE, JUSTICES ERDMANN, GRAY and TRIEWEILER concur.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Cody McDonald (“McDonald”) appeals from the order of the Eighteenth Judicial District Court, Gallatin County, granting summary judgment to Ponderosa Enterprises, Inc. (“Ponderosa”). McDonald also appeals certain evidentiary rulings made by the District Court. Ponderosa cross-appeals. Appellee RTK Construction Inc. (“RTK”) requests fees and costs associated with this appeal.
FACTUAL AND PROCEDURAL HISTORY
¶2 Ponderosa is a framing company located in Bozeman, Montana. Matt Orrell (“Orrell”) is the principal of Ponderosa. McDonald is a construction worker in Bozeman, Montana, doing business as Head First Construction. McDonald was approved as an independent contractor by the Montana Department of Labor on April 16,2008.
¶3 RTK, a construction company, hired Ponderosa to frame a quilt shop in Sidney, Montana. Ponderosa then hired McDonald as an independent contractor to assist with the framing.
¶4 McDonald and Orrell each worked on building a separate wall for the quilt shop. OrrelTs wall was approximately 24-30 feet long and 12 feet tall. Estimates for the weight of the wall ranged from 880 lbs. to 1,028 lbs.
¶5 On June 28, 2011, Orrell asked McDonald and two plumbers working on the building to help him manually lift the wall. As the men were lifting the wall it collapsed and fell on McDonald and Orrell. McDonald was seriously injured.
¶6 In September 2011, McDonald filed for Worker’s Compensation benefits and began receiving $633 per week in Temporary Total Disability payments from State Fund. In doing so, McDonald contended that he had been an employee of Ponderosa at the time of the accident.
¶7 On February 29,2012, McDonald brought suit against Ponderosa and RTK, alleging, in part, negligence and violation of §§ 50-71-201, et. seq., MCA, of the Montana Occupational Safety and Health Act (“MOSHA”). In his complaint, McDonald claimed to be an employee of Ponderosa.
¶8 In February 2013, McDonald reached a settlement with State Fund dismissing his claim in exchange for $332,000. The settlement was approved by the Worker’s Compensation Court in an order on February 27,2013, and the case was dismissed.
¶9 On March 18,2013, Ponderosa moved for summary judgment on the MOSHA claims, arguing that McDonald was in fact an independent contractor rather than an employee at the time of the accident and thus MOSHA did not apply.
¶10 On August 7, 2013, while Ponderosa’s motion for summary judgment was pending, McDonald filed an Unopposed Stipulation with the District Court. The stipulation was intended to resolve the question of McDonald’s status by declaring that he was an independent contractor at the time of his injury. The District Court approved the stipulation in an order on August 28,2013.
¶11 The District Court granted Ponderosa’s motion for summary judgment on the MOSHA claims on January 2, 2014. The court reasoned that, because McDonald was an independent contractor, not an employee, at the time of his injury, Ponderosa did not owe him any duties of safely under MOSHA. On January 16, 2014, the District Court issued an order clarifying that RTK also had no safely duties towards McDonald under MOSHA.
¶12 A five-day jury trial was held, beginning on January 17,2014, on the remaining negligence claims against Ponderosa and RTK. At the outset of trial, the District Court, at Ponderosa’s request, ordered the parties to refrain from discussing the existence of “rules” in place on a job site. The court allowed the parties to discuss the “duty to use reasonable care” and “custom and practice.” At the conclusion of the second day of trial, RTK moved for a directed verdict, arguing that insufficient evidence had been presented to establish that it had breached its duty of reasonable care towards McDonald. Neither Ponderosa nor McDonald objected to the motion, and the court dismissed RTK from the case.
¶13 The jury returned a verdict that Ponderosa was not negligent. McDonald appealed on May 27, 2014. On June 3, 2014, Ponderosa moved this court to include RTK as a party to the appeal. RTK opposed the motion. Ponderosa filed a notice of cross-appeal on June 11,2014. On July 1, 2014, we ordered all pleadings to be served on RTK as a party to the appeal. On August 21, 2014, RTK filed a motion to be dismissed from the appeal. The motion was opposed by Ponderosa. We denied RUTs motion on September 9,2014.
STANDARDS OF REVIEW
¶14 We review a grant of summary judgment de novo, applying the same criteria as the district court. Bonilla v. University of Montana, 2005 MT 183, ¶ 10, 328 Mont. 41, 116 P.3d 823. We review a court’s evidentiary rulings for abuse of discretion. State v. Bonamarte, 2009 MT 243, ¶ 13, 351 Mont. 419, 213 P.3d 457. A court abuses its discretion if it acts arbitrarily or unreasonably and a substantial injustice results. Bonamarte, ¶ 13.
DISCUSSION
¶15 McDonald presents two issues:
1. Did the District Court err when it found that MOSHA did not create a duty of safety running from an employer to an independent contractor?
2. Did the District Court err when it prohibited testimony related to “rules” in place on a construction site ?
¶16 RTK raises a single issue:
3. Is RTK entitled to fees and costs for being improperly joined as an appellee by Ponderosa ?
¶17 Because we affirm, we need not reach Ponderosa’s issues raised on cross-appeal.
¶18 1. Did the District Court err when it found that MOSHA did not create a duty of safety running from an employer to an independent contractor?
¶19 The crux of this case is whether § 50-71-201, MCA, creates a duty for employers to meet certain safety guidelines with respect to independent contractors. Based on the plain language of the Montana Code, we must conclude that it does not.
¶20 Section 50-71-201, MCA, in part, requires an employer to:
(1) furnish a place of employment that is safe for each of the employer’s employees;
(3) adopt and use practices, means, methods, operations, and processes that are reasonably adequate to render the place of employment safe; and
(4) do any other thing reasonably necessary to protect the life, health, and safety of the employer’s employees.
MOSHA incorporates the definition of “employee” from the Worker’s Compensation Act, § 39-71-118, MCA. Section 50-71-204, MCA. The Worker’s Compensation Act defines an “employee,” in relevant part, as, “each person in this state, including a contractor other than an independent contractor, who is in the service of an employer, as defined by 39-71-117, under any appointment or contract of hire, expressed or implied, oral or written.” Section 39-71-118(l)(a), MCA (emphasis added). The Worker’s Compensation Act clearly excludes an independent contractor from its definition of an “employee.” Based on the plain language of this statute, therefore, we must conclude that MOSHA does not create a duty of safety running from an employer to an independent contractor.
¶21 Here, it is undisputed that McDonald was a licensed independent contractor when Ponderosa hired him to frame the quilt shop. Despite McDonald’s descriptions of himself as a subcontractor or sub-subcontractor, the only relevant distinction in the statutes is whether he was an independent contractor, which he admits he was. We therefore conclude that neither Ponderosa nor RTK owed him a special duty of care under MOSHA.
¶22 McDonald seeks to overcome the statutory exclusion of independent contractors from this portion of MOSHA by directing us to a series of prior opinions by this Court. Specifically he cites Shannon v. Howard S. Wright Constr. Co., 181 Mont. 269, 593 P.2d 438 (1979); Stepanek v. Kober Constr., 191 Mont. 430, 625 P.2d 51 (1981); and Cain v. Stevenson, 218 Mont. 101, 706 P.2d 128 (1985). He argues that these cases compel us to extend MOSHA to include independent contractors. We will discuss each case in turn and explain why we disagree.
¶23 In Shannon the employee of a plumbing subcontractor sued the owner and general contractor after he was injured while constructing condominium units at Big Sky ski resort when he was forced to reach his second floor work site by an unsecured ladder because the owner and general contractor had refused to install stairs. Shannon, 181 Mont. 269, 593 P.2d 438. Our inquiry began with the common law rule that general contractors and owners are usually not liable for injuries to employees of subcontractors. Shannon, 181 Mont. at 275, 593 P.2d at 441. We concluded, however, that the general rule did not apply because the owner and general contractor exercised a high degree of supervision and authority over the worksite and in doing so caused the unsafe condition, the lack of stairs, that led to the employee’s injury. Shannon, 181 Mont. at 281, 593 P.2d at 445.
¶24 The bulk of our analysis in Shannon focused on common law liability rules without reference to MOSHA. Though we stated that the plumbing company and its employee were “independent contractors” for the purposes of our analysis, we did not address this classification with regard to the applicability of MOSHA. Shannon, 181 Mont. at 276, 593 P.2d at 442. Our only discussion of MOSHA was in response to the defendants’ argument that they did not qualify as “employers” under the then current version of § 39-71-117, MCA, and that the district court had erred by basing a jury instruction on that definition. Shannon, 181 Mont. at281-82, 593 P.2d at 445-46. We did not consider whether MOSHA applied to the plumbers as independent contractors. Shannon is not on point with this case.
¶25 Stepanek is equally inapplicable. There, we discussed MOSHA only to reaffirm our holding in Shannon that MOSHA applies to general contractors, and imposes a duty of safety running from a general contractor to the employees of a subcontractor. Stepanek, 191 Mont, at 437-38,625 P.2d at 55.
¶26 In Cain the issue was whether the duty of safety extended to subcontractors themselves, rather than just to subcontractors’ employees. We first reaffirmed our holdings in Shannon and Stepanek. Cain, 218 Mont, at 103-04, 706 P.2d at 130. We then reasoned that to draw a distinction between a subcontractor who was employed by another (or incorporated) and a self-employed subcontractor would defy the intent of the legislature, especially given that “the emphasis in Section 50-71-201, MCA, is on the ‘place of employment’ rather than the status of the worker.” Cain, 218 Mont. at 104, 706 P.2d at 130-31. We therefore held that the safety duty imposed by MOSHA extended to subcontractors as well as employees of subcontractors. Cain, 218 Mont. at 104, 706 P.2d at 131.
¶27 Cain is distinguishable from the case at hand for the same reasons that Shannon and Stepanek are. At no time did we discuss whether independent contractors fall under the definition of “employee” for the purpose of MOSHA. Although the Cain Court noted that the electrical subcontractor “furnished his own tools and worked under his own time schedule,” the Court never determined him to be an independent contractor and never discussed the independent contractor exemption in § 39-71-118, MCA. Cain, 218 Mont, at 102, 706 P.2d at 129.
¶28 McDonald points out that, despite frequently amending MOSHA since our Cain decision, the legislature never directly responded to our holding there, and argues that the legislature ratified our holding through its silence. Even if McDonald is correct that the legislature’s silence after Cain ratified our holding that MOSHA applies to subcontractors, such a ratification would be irrelevant to the question of whether an independent contractor qualifies as an employee under § 39-71-118, MCA.
¶29 McDonald asks us to “finely parse” his employment status and find that, under the loaned servant doctrine, he was an employee of Ponderosa during the lifting of the wall. The loaned servant doctrine applies when an employer temporarily borrows and exercises control over another’s employee. See Devaney v. Lawler Corp., 101 Mont. 579, 56 P.2d 746 (1936). In this case, McDonald had no employer to loan him. As an independent contractor he was responsible for his own work and hours. His decision to help Orrell lift the wall was not compelled or requested by an immediate supervisor. The loaned servant doctrine is not applicable to this case.
¶30 No authority cited by McDonald grants relief from the plain language of the statute exempting independent contractors from the status of “employees” under MOSHA. The District Court’s ruling that MOSHA did not apply to McDonald is affirmed.
¶31 2. Did the District Court err when it prohibited testimony related to “rules” in place on a construction site ?
¶32 McDonald contends that the District Court’s trial rulings materially affected the fairness of the trial. At Ponderosa’s request, the District Court ordered the parties and witnesses to refrain from talking about “rules” governing a construction site. McDonald argues that these rulings led to “absurd moments during trial” and instilled in the jury the sense that any job site involving independent contractors is a hotbed of anarchy where “there are no rules, no one is in charge, no one has responsibility to exercise good judgment, and no one can be held responsible for exercising bad judgment.”
¶33 A review of the record belies this claim. After the court determined that MOSHA did not apply, in order to succeed on his remaining claims McDonald needed to convince the jury that either of the defendants breached their duty to use reasonable care, the standard for a negligence action. Due to the absence of any formal safety regulations governing the conduct of the parties, the District Court reasoned that it would be prejudicial to imply that such regulations existed by using terms like “rules” in front of the jury. The court allowed testimony regarding the “duty to use reasonable care,” as well as “custom and practice.” McDonald’s expert was allowed to testify about safely measures he felt Qrrell should have used while attempting to lift the wall. In short, nothing in the record indicates that the court’s trial ruling caused prejudice sufficient to justify a new trial. The District Court used its discretion to limit the potential prejudicial effect of testimony about hypothetical “rules.” The ruling was neither unreasonable nor arbitrary, and it did not result in a substantial injustice. The District Court is affirmed on this issue.
¶34 3. Is RTK entitled to fees and costs for being improperly joined as an appellee by Ponderosa ?
¶35 RTK argues that it is entitled to fees and costs because it was unnecessarily joined as a party to this appeal by Ponderosa. RTKbases its position on the fact that it received an unopposed directed verdict at trial, and that, because Ponderosa did not object to the District Court, it cannot now seek to join RTK as a party again.
¶36 Ponderosa acknowledges that it did not object to the directed verdict dismissing RTK from trial, but points out that the dismissal took place after the District Court had ruled that MOSHA did not apply to McDonald. At that point, the only claim remaining against RTK was simple negligence. When, at the conclusion of McDonald’s main case, McDonald had not attempted to demonstrate that RTK breached a duty of reasonable care, the dismissal was proper. However, Ponderosa points out that, in the event we agreed with McDonald’s position that MOSHA applies to independent contractors, the MOSHA claims against both Ponderosa and RTK would have been resurrected. Therefore, according to Ponderosa, RTK is a necessary party to this appeal.
¶37 We held in Buck v. Billings Mont. Chevrolet, 248 Mont. 276, 287, 811 P.2d 537, 544 (1991), that where a plaintiff acquiesced to the dismissal of one of the defendants in the District Court, the plaintiff could not contest that dismissal on appeal. We awarded costs and attorney fees on appeal to the dismissed defendant. Buck, 248 Mont. at 287, 811 P.2d at 544. In this case, however, RTK remained a party to the appeal by order of this Court after considering both parties’ arguments. Because we previously denied RTK’s motion to be dismissed from the appeal, we now deny its request for costs and fees associated with this appeal.
CONCLUSION
¶38 The District Court’s holding that MOSHA does not apply to McDonald because he is an independent contractor is affirmed. The District Court’s evidentiary ruling is likewise affirmed. RTKs request for costs and fees associated with this appeal is denied.
JUSTICES RICE, COTTER and BAKER concur.
We acknowledge the confusion engendered by McDonald’s shift from employee status to independent contractor status. However, because that issue is not before us, we do not address it here.
|
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JUSTICE McKINNON
delivered the Opinion of the Court.
¶1 Jeremy John Braulick appeals from his conviction of two counts of attempted deliberate homicide in the Sixth Judicial District Court, Park County. We affirm.
¶2 Braulick presents the following issues for review:
1. Whether the District Court erred when it denied Braulick’s motion to suppress spontaneous statements made after he was in custody, after he requested an attorney, and before he was notified of his Miranda rights.
2. Whether the District Court erred when it denied Braulick’s motion to exclude one of the victims of the crime from the courtroom.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 On the evening of December 27,2011, Braulick was sitting at the kitchen table in his mother’s house in Livingston, eating burritos with his mother, Cheryl Kautzman, and his step-father, Scott Kautzman. Braulick, who was 39 years old at the time, was staying with the Kautzmans during the holidays. Braulick was between residences and had been staying with friends when he called Cheryl and asked to stay at the house for Christmas. Cheryl was initially reluctant, because there had been some “disruptive behavior” and “bad language” in the past. Scott told Braulick that he would be allowed to stay only if he agreed not to “blow up” and not to be abusive toward his mother. Scott and Braulick agreed that if those conditions were violated, Braulick would have to leave. Cheryl gave Braulick a key to the house.
¶4 The Kautzmans kept a small television on the kitchen counter so they could watch the evening news. As they were eating dinner that night, they saw a commercial depicting the widow of a highway patrol officer who had been killed in a collision with a drunk driver. Braulick said it was unfair that the public was so sympathetic to police officers, while people whose lives were, as he perceived, ruined by the police received nothing. Cheryl explained to Braulick that the commercial was against drunk driving, and not necessarily in support of law enforcement. Scott told Braulick he thought law enforcement officers did a very difficult job suad deserved support. As Braulick became more agitated, both Cheryl and Scott reminded him of their agreement that he would have to leave if his behavior or language became aggressive. Braulick said he would leave, but on his own time. He walked out of the kitchen, and Cheryl followed, asking him to return the house key. Braulick refused, and Cheryl went out to the back porch to have a cigarette. Scott joined her.
¶5 A few minutes later, Braulick, who is six feet, five inches tall and weighed about 215 pounds at the time, rushed on to the porch and tackled Cheryl and Scott. Cheryl’s head hit the floor and Scott said it looked like she had been knocked out. Braulick continued attacking Scott and laying to push him down the stairs to the basement. Scott clung to the bannister and “wouldn’t go over.” Scott recaled, “the next thing you know, I was in the comer of the wall and the door that goes outside kind of sitting on my legs, and I couldn’t move. I don’t know if he hit me behind the back of the head, or what, but I just couldn’t move any part of my body.” Scott fel to the floor two to three feet away from Cheryl. Braulick then kneeled on the floor and began choking Cheryl with his right hand and Scott with his left. When he stopped choking them, he hit Scott on the head several times. Cheryl attempted to crawl back to the kitchen, and Braulick hit her multiple times on the side ofher face, breaking her glasses. Braulick then left the room. Scott and Cheryl were able to get up and walk to the living room. Cheryl told Scott her face hurt, and Scott said he would take her to the doctor. Braulick then entered the living room with a knife in his hand. Scott recognized the knife as one Braulick had showed him before, “kind of a trick knife. You spin it a couple ways and it comes out, and then you spin it a couple times and it goes back in.” Cheryl saw the knife and said, “Oh, no. Oh, no.”
¶6 The scene that followed was harrowing. Scott and Braulick pursued each other to the dining room, and then the kitchen. Braulick cut a gash in Scott’s abdomen, through which Scott could see his own intestines spilling out. He put his hand over his abdomen to hold them in. Braulick then attacked Cheryl, stabbing her in the side. He then grabbed her from behind and stabbed her again in the breast. Scott, fearing for Cheryl’s life, let go of his abdomen so he could use both hands to get the knife away from Braulick. Scott somehow got the knife, and Braulick left. There was so much blood that Scott recalled they were “slipping and sliding” on the kitchen floor. Cheryl appeared to be looking for something in the kitchen, and Scott urged her to get out of the house. Scott found he could not open the back door because his hand was badly cut. He eventually managed to open the door and the couple ran outside, calling for help. Scott found Braulick’s cell phone on the porch, but did not know how to work it. Cheiyl, who remembers only “bits and pieces” of the events, then told Scott she had a cell phone in her pocket. She called 911.
¶7 Livingston Police Department Officers Steve Kunnath and Matthew Tubaugh and Park County Sheriffs Deputy Jason Hopkin and Sergeant Clay Herbst responded to the call, arriving at the house almost simultaneously. They immediately saw Cheryl in front of the house, with her hands in the air, holding a cell phone. Cheryl said, “He stabbed me,” and pointed to the back of the house. Hopkin remained in front with Cheryl while Kunnath, Tubaugh, and Herbst headed toward the back of the house. Hopkin looked around for signs of the direction the suspect may have fled, and observed a blood trail. He began following the blood trail, and saw a man approaching. The man was covered in blood and had a knife in his hand. Hopkin said the man “looked kind of like a zombie the way he was walking side to side, kind of stiff-legged, and he had a blank stare on his face.” Believing the man was a suspect, Hopkin ordered him to drop the knife. When he did so, Hopkin approached and “saw his intestines coming out the side of his shirt.” Hopkin realized the man was a victim, laid him on the ground, assessed his injuries, and applied compression to his abdominal wound. Hopkin called an ambulance and learned that the man was named Scott, and that he had been attacked by his step-son.
¶8 The other officers heard Hopkin’s encounter with Scott and went to assist. They soon realized that Scott was not the suspect, and Herbst and Tubaugh left to search inside the house. Kunnath remained with Hopkin until the ambulance arrived, then went to the back yard to continue searching for the suspect. In the back yard, Kunnath saw a tall, dark figure approaching and thought it might be a neighbor coming out to see what was going on. He asked the person who he was. The person identified himself as Jeremy Braulick, held out a set of dog tags, and said, “I did it. I’m ready to go to jail.” Braulick cooperated as Kunnath placed him in handcuffs and led him to the front of the house. Kunnath then turned on his audio recorder. Kunnath sat Braulick down on the front steps, and asked, “So, Jeremy, what’s going on? What happened here?” Braulick responded, “What happened? I don’t have a life, dude, and they want to talk to me like I’m a lowlife, and that’s it. I, I want a, I want an attorney and that’s it.” Kunnath asked again, “Jeremy, what happened to your dad? What happened to your step-dad?” Braulick responded, “I don’t know. He’s not my dad. And I want to go. I want to get out of here.” Kunnath told Braulick he would need to sit there. Braulick then said, “I never assaulted anybody in my life until now, so.” Kunnath placed Braulick in a patrol car.
¶9 Kunnath drove Braulick to the detention center and Tubaugh followed. As the officers prepared to remove Braulick from the patrol car, another officer can be heard on the recording saying, “Find out how long he’s been here. If it’s over 72 hours, add failure to register. He should be in Bozeman. He should have checked in with me, and he knows this.” At a pre-trial suppression hearing, Tubaugh testified that as Braulick was escorted into the holding area, Tubaugh detected a “clear odor” of alcohol and observed that Braulick appeared very distraught. Mindful of the violent nature of the attack in the Kautzmans’ house, Tubaugh also observed that Braulick was considerably larger than most of the officers. Tubaugh approached Braulick in the holding area and said:
I’m only going to tell you this one time, okay? Because of the elevation of what’s happened this evening, if you’re not compliant, we’re not going to mess around with you. Do you understand? That’s not a threat, that, that’s, that’s just the way it’s going to be. Okay, so, you stay at this level, we are perfectly good. Otherwise, we’re going to go to an extreme level very quickly. I appreciate your cooperation. I just want you to understand that.
Tubaugh then asked Braulick how much alcohol he had consumed that day. He also asked Braulick how long he had been at the Kautzmans’ house and whether he was just visiting or living there. Tubaugh advised Braulick he would be charged with two counts of aggravated assault, one of which may be increased to attempted homicide. He then said, “I’m not going to ask you any questions because I haven’t Mirandized you. But when we get downstairs, if you want to talk to me, 111 talk to you.”
¶ 10 Braulick was sobbing as he was taken from the holding area to the detention center. The officers did not question him at this time. Braulick continued to make unprompted exclamations, saying, “I don’t care anymore, just give me my max time. I’m fucking tired, dude, I’m tired of fighting with people.” He complained about the way his parents talked to him and the way he had been treated since leaving California, where he “had women that liked [him],” to come to Montana. He said, “But now I have, so now I’m fucking screwed, dude.” He went on to complain about how he doesn’t have any money, but people who do have money — sperifically referencing O.J. Simpson and John “The Teflon Don” Gotti — murder people and get off“Scot free.” Braulick was later read his Miranda rights by Detective Joseph Harris, and he declined to waive his rights and be interviewed.
¶11 Braulick was charged with two counts of attempted deliberate homicide, with a penalty enhancement for use of a dangerous weapon. Before trial, he moved to suppress statements made while in custody on the grounds that he was never informed of his right to remain silent, pursuant to Miranda, and that all questioning by law enforcement should have stopped when he asked for an attorney. The District Court held a suppression hearing on September 10, 2012, hearing testimony from Kunnath, Tubaugh, Scott, and Cheryl. Kunnath testified that when he asked Braulick, “What happened to your step-dad,” he was still not certain Braulick was the suspect. Kunnath was “trying to figure out what the whole situation was,” particularly as other officers were still inside the house, and the 911 call had not included a report of how many people were present. Tubaugh testified that his questions about Braulick’s drinking were part of the booking process, because heavily intoxicated persons may require medical clearance. Tubaugh also testified that he asked Braulick how long he had been staying at the Kautzmans’ house because he wanted to know, for officer safety, if Braulick could have gone somewhere else during the time he left the scene or if there could be additional persons involved. On cross-examination, defense counsel pointed out that Tubaugh never asked Braulick how many people were at the house.
¶12 After the suppression hearing, the District Court adopted the State’s proposed findings and conclusions as accurately stating the relevant facts and law. The District Court concluded there had been no custodial interrogation of Braulick, finding that his statements were spontaneously blurted while Braulick sobbed and talked to himself. The District Court did, however, order that Tubaugh’s question about Braulick’s alcohol consumption was to be “edited out of any tape and omitted from any testimony presented by the State,” finding that the amount Braulick had been drinking was more prejudicial than probative. The trial began December 18,2012, with Scott and Cheryl as the first and second witnesses, respectively. Braulick objected to allowing Cheryl to remain in the courtroom during Scott’s testimony. The District Court ruled that as victims of a criminal offense, both Scott and Cheryl had the right to be present for the trial. During Cheiyl’s testimony, the State asked her at several points if she recalled Scott’s testimony and if it was accurate. Later in the trial, Kunnath testified and an audio recording made dining his encounter with Braulick was played for the jury. Kunnath also read portions from a transcript of the recorded statements made by Braulick, including the statements, Tve never assaulted anybody in my life, until now,” “I don’t care anymore, just give me my max time,” and “But now I have, so now I’m fucking screwed, dude.” Tubaugh did not testify at trial. Braulick was convicted on both counts of attempted homicide and sentenced to a total of 90 years in the Montana State Prison.
STANDARD OF REVIEW
¶13 On review of a district court’s denial of a motion to suppress evidence, we review findings of fact for clear error and conclusions of law for correctness. State v. Phillips, 2013 MT 317, ¶ 15, 372 Mont. 317, 312 P.3d 445; State v. Wheeler, 2006 MT 38, ¶ 12, 331 Mont. 179, 134 P.3d 38. A finding of fact is clearly erroneous if it is not supported by substantial evidence, if the court has misapprehended the effect of the evidence, or if our review of the record leaves us convinced that a mistake has been made. Phillips, ¶ 15; Wheeler, ¶ 12. It is within the province of the district court to determine the credibility of witnesses at a suppression hearing. Phillips, ¶ 19. Finally, we review the district court’s interpretation of a statute for correctness. Faulconbridge v. State, 2006 MT 198, ¶ 24, 333 Mont. 186, 142 P.3d 777.
DISCUSSION
¶14 1. Whether the District Court erred when it denied Braulick’s motion to suppress spontaneous statements made after he was in custody, after he requested an attorney, and before he was notified of his Miranda rights.
¶15 It has been well-established since Miranda v. Arizona that statements resulting from custodial interrogation of a defendant may not be used by the prosecution unless the defendant is informed, prior to questioning, that he has a right to remain silent, that any statement he does make may be used as evidence against him, and that he has a right to the presence of an attorney. Miranda v. Ariz., 384 U.S. 436, 444, 86 S. Ct. 1602, 1612 (1966); State v. Kelm, 2013 MT 115, ¶ 29, 370 Mont. 61, 300 P.3d 687; State v. Olson, 2003 MT 61, ¶ 13, 314 Mont. 402, 66 P.3d 297. These rights stem from the constitutional guarantee that no person may be compelled in a criminal case to be a witness against him or herself. U.S. Const, amend. V; State v. Morrisey, 2009 MT 201, ¶ 29, 351 Mont. 144, 214 P.3d 708.
¶16 Braulick argues that his statements must be excluded because he was not given a Miranda warning. A Miranda warning is required only if the defendant is subject to custodial interrogation. Olson, ¶ 14. A person is in custody if he or she has been deprived of his or her freedom in any significant way, or his or her “freedom of action has been curtailed to a degree associated with a formal arrest.” Morrisey, ¶ 37. This determination involves consideration of whether a reasonable person under the circumstances wouldhave felt free to leave. Morrisey, ¶ 37. Interrogation includes “ ‘any words or actions on the part of the police (other than those normally attendant to arrest and custody) that the police should know are reasonably likely to elicit an incriminating response from the suspect.’ ” Olson, ¶ 18. When analyzing whether words or actions are reasonably likely to elicit an incriminating response, the primary focus should be on the perceptions of the suspect, not the intent of the police. Olson, ¶ 18. An officer may, however, “ ‘ask the detainee a moderate number of questions to determine the detainee’s identity and to try to obtain information confirming or dispelling the officer’s suspicions before the requirements of Miranda attach.’ ” State v. Hurlbert, 2009 MT 221, ¶ 34, 351 Mont. 316, 211 P.3d 869 (quoting State v. Elison, 2000 MT 288, ¶ 32, 302 Mont. 228, 14 P.3d 456). Further, a spontaneous or unsolicited remark, not made in response to interrogation, is admissible even without a Miranda warning. State v. Johnson, 177 Mont. 182, 187, 580 P.2d 1387, 1390 (1978).
¶17 Braulick also argues that his statements must be excluded because they were made after he attempted to invoke his right to counsel. Miranda recognized a right to counsel during custodial interrogation deriving from the Fifth Amendment protection against self-incrimination. Miranda, 384 U.S. at 469-70, 86 S. Ct. at 1625-26; State v. Scheffer, 2010 MT 73, ¶¶ 16-17, 355 Mont. 523, 230 P.3d 462. This right is distinct from the Sixth Amendment right to counsel, which attaches only after commencement of a criminal prosecution. Scheffer, ¶¶ 16-17. Once a defendant has invoked the right to have counsel present during custodial interrogation, the interrogation must end. State v. Main, 2011 MT 123, ¶ 15, 360 Mont. 470, 255 P.3d 1240; Scheffer, ¶ 17. Like the other requirements of Miranda, however, this applies only to interrogation and does not require exclusion of a defendant’s spontaneous statements. Edwards v. Ariz., 451 U.S. 477, 484-86, 101 S. Ct. 1880, 1885 (1981). Even after an accused has invoked the right to counsel,
nothing in the Fifth and Fourteenth Amendments would prohibit the police from merely listening to his voluntary, volunteered statements and using them against him at the trial. The Fifth Amendment right identified in Miranda is the right to have counsel present at any custodial interrogation. Absent such interrogation, there would have been no infringement of the right that [the accused] invoked....
Edwards, 451 U.S. at 485-86, 101 S. Ct. at 1885. Thus, trader either theory presented by Braulick, the dispositive question is whether he was subject to custodial interrogation.
¶18 On appeal, the State argues that Braulick was not in custody when he was handcuffed in front of the Kautzmans’ home. In the District Court, the State conceded on multiple occasions that there could be no dispute that Braulick was in custody. Moreover, we have no difficulty concluding that Braulick was in custody when he was handcuffed, led to another area by a law enforcement officer, and told, in response to his specific request to “get out of here,” that he could not leave. Under such circumstances, Braulick’s freedom was curtailed to a degree normally associated with formal arrest. Morrisey, ¶ 37.
¶19 We next address whether Braulick’s statements were the product of interrogation. After Braulick was in custody, Kunnath asked him two direct questions: “So, Jeremy, what’s going on? What happened here?” and “Jeremy, what happened to your dad? What happened to your step-dad?” Kunnath testified that at that point, he and other officers on the scene did not understand what had happened or how many people may have been involved. Kunnath’s testimony is supported by the fact that moments earlier, Hopkin had attempted to detain Scott, who was severely injured, as a possible suspect. Scott and Braulick were both covered in blood and forrad wandering around outside the home. Kunnath’s limited questioning was a reasonable effort to obtain information confirming his suspicions about events at the scene. Hurlbert, ¶ 34 (quoting Elison, ¶ 32). The requirements of Miranda did not yet attach. Further, Kunnath stopped questioning Braulick after asking him what happened to his step-dad, but Braulick continued to make unprompted statements, including “I never assaulted anybody in my life until now, so.” This statement was not in response to interrogation, and was therefore admissible in the absence of a Miranda warning. Johnson, 177 Mont, at 187, 580 P.2d at 1390.
¶20 On appeal, Braulick also refers to his exchange with Tubaugh in the holding area, but Tubaugh did not testify at trial and no transcript of the interaction was read at trial. The conversation is included on an audio recording that was played for the jury, but it is not clear from the record before us which portions of the audio were actually played. Statements of counsel immediately before trial indicate that the recording had been redacted, but that it could be manually paused in the courtroom if the redacted portions were to play accidentally. The audio recording contained in the District Court record includes Tubaugh’s question about Braulick’s alcohol consumption, which the District Court specifically ordered excluded. Because the record does not reflect any objection to excluded portions of the audio recording being improperly played for the jury, it appears that the exhibit filed may not be an accurate reflection of what the jury actually heard. We caution counsel that such confusion regarding exhibits complicates this Court’s review.
¶21 We assume for the moment that Tubaugh’s exchange with Braulickin the holding area was introduced at trial. The District Court concluded that the two questions asked by Tubaugh, relating to Braulick’s alcohol consumption and place of residence, did not constitute interrogation. Braulick’s argument is not that the statements resulting from his exchange with Tubaugh should themselves have been excluded, but that all statements made by Braulick at any time after he invoked his right to counsel, whether spontaneous or not, should have been excluded. This is a misunderstanding of the law under Miranda, which does not mandate the exclusion of a defendant’s spontaneous outbursts. Johnson, 177 Mont, at 187, 580 P.2d at 1390. Braulick made several spontaneous statements after leaving the holding area and while officers were discussing how to proceed with booking. He was not asked any questions during this time and his outbursts, including “I don’t care anymore, just give me my max time,” and “But now I have, so now I’m fucking screwed, dude,” were not in response to any statements or questions from officers. The District Court found that in his distressed state, Braulick was simply talking to himself. His statements did not stem from the exchange with Tubaugh in the holding area, were not in response to interrogation, and need not be excluded under the Miranda rule. Johnson, 177 Mont. at 187, 580 P.2d at 1390.
¶22 The procedural safeguards of Miranda exist to protect accused persons from the coercive effects of custodial interrogation. Miranda, 384 U.S. at 445-46, 86 S. Ct. at 1612-13. They do not exist to grant a suspect in a criminal investigation license to spontaneously blurt incriminating statements without fear of recrimination. That Braulick did not receive the benefit of his Fifth Amendment privilege against self-incrimination is attributable to his own actions, not those of law enforcement. The District Court did not err when it denied Braulick’s motion to suppress his spontaneous statements.
¶23 2. Whether the District Court erred when it denied Braulick’s motion to exclude one of the victims of the crime from the courtroom.
¶24 Ordinarily, when asked to do so by one of the parties, a court must order witnesses excluded from the courtroom so that they cannot hear the testimony of other witnesses. M. R. Evid. 615. The court may also order the exclusion of witnesses on its own motion. M. R. Evid. 615. By statute, however, the victim of a crime has the right to be present during trial, and may not be excluded from the trial solely because he or she will also be called as a witness. Section 46-24-106(1), MCA. A victim may be excluded only if the trial court finds specific facts supporting exclusion, for disruptive conduct, or from portions of a trial or hearing dealing with sensitive matters personal to a youth. Section 46-24-106(2), MCA. A family member of a victim also may not be excluded solely because he or she is to be called as a witness. Section 46-24-106(4), MCA. A family member may be excluded only upon a showing that the family member’s testimony will be directly relevant to the guilt or innocence of the defendant, or that the defendant’s right to a fair trial will be jeopardized if the family member is not excluded. Section 46-24-106(4), MCA.
¶25 Scott and Cheryl were both victims of the crime, and testified as the State’s first and second witnesses, respectively. Prior to trial, the State notified the court that both Scott and Cheryl intended to be present for the frill proceedings. Braulick moved to have Cheryl excluded from the courtroom during Scott’s testimony, pursuant to M. R. Evid. 615. The District Court responded that as a victim of the crime, Cheryl had a statutory right to be present during the trial. Braulick did not argue that there were any specific facts supporting Cheryl’s exclusion, and instead offered only a conclusory argument that “to let them just sit and listen to all of the evidence before they testify is highly prejudicial to the defendant.” Section 46-24-106, MCA, contemplates more than a broad allegation of prejudice. The party moving for exclusion of the victim must produce specific facts demonstrating that exclusion is warranted. See, e.g., Lockhead v. Weinstein, 2001 MT 132, ¶ 10, 305 Mont. 438, 28 P.3d 1081 (burden of proof is on the moving party). No effort to produce such facts was made here. On appeal, Braulick argues that the State improperly asked Cheiyl to comment on the accuracy of Scott’s testimony and used references to Scott’s testimony to “tailor” Cheryl’s testimony. Braulick did not object to this line of questioning during trial, and has thus waived his right to raise the issue on appeal. State v. Adgerson, 2003 MT 284, ¶ 12, 318 Mont. 22, 78 P.3d 850 (overruled in part on other grounds by Whitlow v. State, 2008 MT 140, ¶ 20, 343 Mont. 90, 183 P.3d 861). The manner in which the State questioned Cheryl, and Braulick’s motion to exclude Cheryl during the testimony of other witnesses, are distinct and separate issues. Braulick inappropriately conflates the two and attempts to use the State’s questions to Cheryl to belatedly manufacture the required specific facts in support of exclusion. The District Court correctly concluded that the plain statutory language of § 46-24-106, MCA, was applicable.
CONCLUSION
¶26 Braulick’s spontaneous statements made to or within the hearing of law enforcement officers after he was taken into custody and after he requested an attorney were not in response to interrogation, and therefore, Miranda does not mandate their exclusion. Braulick failed to produce specific facts supporting the exclusion of a victim who was also a witness from the courtroom. We affirm.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, WHEAT and SHEA concur.
Given the instruction to “find out how long he’s been here ... and add failure to register,” we are skeptical of Tubaugh’s testimony at the suppression hearing that he asked Braulick about his residence for reasons relating to officer safety. Nevertheless, the intent of the officer is not the relevant factor in our inquiry. Olson, ¶ 18. Further, we must defer to the judgment of the District Court regarding the credibility of witnesses. Phillips, ¶ 19.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 TAGS Realty, LLC (TAGS) appeals from the order of the Montana First Judicial District Court, Broadwater County, resolving cross-motions for summary judgment in favor of Mark Runkle (Runkle). We reverse.
ISSUE
¶2 We review the following issue: Did the District Court err by granting summary judgment in favor of Runkle?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Runkle and TAGS are the locators of several adjacent and overlapping mining claims in Broadwater County. Runkle purchased a patented lode claim called the “Black Friday” claim in 2009. TAGS located an unpatented lode claim adjacent to the Black Friday claim in 2010. In 2011, Runkle located an unpatented placer claim that overlapped both TAGS’s claim and the Black Friday claim.
¶4 This case concerns a pile of mining waste that was located on both Runkle’s and TAGS’s claims. The waste pile overlapped the common border of TAGS’s claim and the Black Friday claim and was located entirely within Runkle’s placer claim. According to each of the parties, the origin of the mining waste is a disputed fact. Both parties agree, however, that the mining waste contained gold deposits that were not economically viable at the time they were removed from an historic mine. They also agree that the deposits became viable by 2011. During 2011, Runkle removed and sold all of the waste. It is undisputed that Runkle entered TAGS’s claim and removed the waste located within TAGS’s claim to do so.
¶5 TAGS initiated the present suit in response, claiming that Runkle was not entitled to remove the waste material that was located on TAGS’s claim. TAGS filed a complaint on May 7, 2012, asserting trespass and conversion causes of action. Following discovery, the parties stipulated that the case could be decided by summary judgment. After considering cross-motions for summary judgment, considering briefs from each party, and holding a hearing, the District Court granted summary judgment in favor of Runkle and dismissed all of TAGS’s claims. TAGS appeals.
STANDARD OF REVIEW
¶6 We review a district court’s summary judgment ruling de novo, applying the same rule, M. R. Civ. P. 56(c)(3), that a district court does when making a summary judgment ruling. Beaverhead Cnty. v. Mont. Ass’n of Cntys. Joint Powers Ins. Auth., 2014 MT 267, ¶ 11, 376 Mont. 413, 335 P.3d 721. Summary judgment "should be rendered if the pleadings, the discovexy and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(cX3).
DISCUSSION
¶7 Did the District Court err by granting summary judgment in favor of Runkle?
¶8 TAGS argues that the District Court’s order was unsupported by either the parties’ arguments or the evidence before the court. For this reason, TAGS contends that the District Court should not have granted summary judgment and that this Court should reverse the District Court’s order. We agree.
¶9 The District Court granted summary judgment after decidingthat TAGS had no property interests upon which it could maintain its trespass or conversion claims. It provided two reasons for this decision. First, it decided that TAGS had failed to discover any valuable lode materials on its claim site and that TAGS’s claim was invalid as a result. Second, it decided that TAGS’s lode claim, even if it was valid, did not give TAGS any rights to the waste materials, which were placer deposits. We cannot affirm the District Court decision based on either reason.
¶10 First, the District Court incorrectly decided on summary judgment that TAGS’s lode claim was not supported by a lode discovery. It is well-established that a lode claim is only valid if it is supported by the discovery of lode materials on the claim. 30 U.S.C. § 23; 43 C.F.R. § 3832.21; Silver Jet Mines v. Schwark, 210 Mont. 81, 86, 682 P.2d 708, 711-12 (1984); Boscarino v. Gibson, 207 Mont. 112, 114, 117, 672 P.2d 1119, 1121-22 (1983); Cole v. Ralph, 252 U.S. 286, 294-96, 40 S. Ct. 321, 325-26 (1920). And, we have stated that “[w]hen a subsequent locator questions the existence of such a discovery, it is incumbent on the original locator to prove that he has discovered sufficient minerals.” Silver Jet Mines, 210 Mont. at 86, 682 P.2d at 711. Here, however, the existence of a lode discovery on TAGS’s claim was never questioned. Each party implicitly presumed in their arguments to the District Court that TAGS’s lode claim was valid, and no evidence or argument regarding discovery of a lode deposit on TAGS’s claim was ever made part of the record. Without warning to either parly the District Court raised the issue and decided the case based on TAGS’s failure to discover lode deposits on its claim. TAGS had no opportunity to prove that it had discovered sufficient materials, and the District Court should not have granted summary judgment without allowing TAGS the opportunity to prove that there was a genuine issue of fact that it discovered lode materials on the claim. Mill Creek Ltd. v. Lodge, 2010 MT 65, ¶ 18, 355 Mont. 478, 228 P.3d 1144; In re Estate of Marson, 2005 MT 222, ¶ 11, 328 Mont. 348, 120 P.3d 382 (reversing summary judgment where a party had no notice of or opportunity to refute the District Court’s reasons for granting summary judgment against it).
¶11 Runkle disagrees. He argues that TAGS admitted in its arguments to the District Court that it had never discovered lode materials on its claim. To support this argument, Runkle cites the following language from TAGS’s summary judgment motion: “TAGS representatives used spray paint to mark a line on the ground clearly delineating the location of the TAGS Lode boundary lines... . The purpose of the line was to indicate TAGS’ ownership of the materials on the surface of the TAGS Lode.” Runkle also quotes statements TAGS’s counsel made at a summary judgment hearing: “My client came in years later, created an unpatented lode claim. And, therefore, when he made that unpatented lode claim, he received ownership — or exercised ownership over the abandoned materials.” Based on these statements, Runkle argues that by attempting to control the placer waste materials on its lode claim, TAGS implicitly admitted that no lode materials existed on its claim. This is incorrect.
¶12 TAGS never stated or admitted that no lode materials existed or that it located its lode claim on the basis of the placer waste materials. Instead, it stated that it located a lode claim, that the mining waste was within the boundaries of that claim, and that it could exercise control over the mining waste by virtue of its valid lode claim. We do not consider or rule on whether this reasoning is a correct interpretation of the law, but it is apparent that it was not an admission that TAGS failed to discover lode materials on its claim.
¶13 Additionally, Runkle suggests in this same argument that TAGS admitted the invalidity of its claim when it admitted that the waste materials, which Runkle claims are placer deposits, were within the boundaries of the lode claim. This is incorrect; the existence of placer deposits within claim boundaries will not preclude location of the claim as a lode claim. It is true that if they are not personally, mine tailings are usually treated as placer deposits. Foreman v. Beaverhead Cnty., 117 Mont. 557, 561, 161 P.2d 524, 525 (1945); Conway v. Fabian, 108 Mont. 287, 308, 89 P.2d 1022, 1030 (1939). It is also true that discovery of a placer deposit will not support a lode claim and discovery of a lode deposit will not support a placer claim. Cole, 252 U.S. at 295, 40 S. Ct. at 325-26. However, as long as a claim is supported by discovery of a proper deposit, the existence of another type of deposit within the claim boundaries will not preclude location of the claim. Clipper Mining Co. v. Eli Mining & Land Co., 194 U.S. 220, 230-32, 24 S. Ct. 632, 636-37 (1904); Reynolds v. Iron Silver Mining Co., 116 U.S. 687, 695-96, 6 S. Ct. 601, 606 (1886); see 30 U.S.C. § 37 (providing procedures by which the locator of an unpatented placer claim can acquire title to lode deposits within the boundaries of the placer claim). Runkle is incorrect when he argues that TAGS’s statements regarding location of the mining waste within its claim are admissions of the claim’s invalidity. For the foregoing reasons, the District Court erred by granting summary judgment on an issue never raised, addressed, or conceded by the parties.
¶14 Second, the District Court incorrectly decided that regardless of whether TAGS’s claim was valid, TAGS did not have a property interest sufficient to support its trespass claim. The District Court reasoned that TAGS’s claim is a lode claim, the waste materials were a placer deposit, and as such TAGS had no interest in the waste materials.
¶15 Regardless of whether TAGS could assert any interest in the waste materials, TAGS may have had the right to exclude Runkle from its claim. Trespass is an intrusion on a party’s right to exclusive possession of his property. Burley v. Burlington N. & Santa Fe Ry. Co., 2012 MT 28, ¶ 13, 364 Mont. 77, 273 P.3d 825. A validly located mining claim is property, and the locator of the claim has the right to exclusive possession of the property within the boundaries of the claim. 30 U.S.C. § 26; Our Lady of the Rockies, Inc. v. Peterson, 2008 MT 110, ¶ 3, 342 Mont. 393, 181 P.3d 631; Boscarino, 207 Mont. at 120, 672 P.2d at 1124; Cole, 252 U.S. at 295, 40 S.Ct. at 325; Belk v. Meagher, 104 U.S. 279, 283-85 (1881). This right to exclusive possession is subject only to a superior right of the United States:
to manage and dispose of the vegetative surface resources thereof and to manage other surface resources thereof (except mineral deposits subject to location under the mining laws of the United States). Any such mining claim shall also be subject, prior to issuance of patent therefor, to the right of the United States, its permittees, and licensees, to use so much of the surface thereof as may he necessary for such purposes or for access to adjacent land: Provided, however, That any use of the surface of any such mining claim... shall he such as not to endanger or materially interfere with prospecting, mining or processing operations or uses reasonably incident thereto.
30 U.S.C. § 612(b) (emphasis in original). Thus, were it established that TAGS had actually discovered a lode vein, TAGS would have the right to prevent entries on his claim made for the purposes of securing or disposing of mineral deposits on that claim. Again, this is a question of fact that the District Court inappropriately resolved against TAGS. 30 U.S.C. §§ 26, 612(b); see United States v. Curtis-Nevada Mines, Inc., 611 F.2d 1277, 1285-86 (9th Cir. 1980). This right would be sufficient to maintain a trespass action against anyone seeking to make such an entry. See Bixby v. Reynolds Mining Corp., 826 P.2d 968, 971 (N.M. 1992); Boscarino, 207 Mont. at 120, 672 P.2d at 1124; Clipper Mining Co., 194 U.S. at 230-32, 24 S. Ct. at 636-37. Whether Runkle trespassed by making such an entry depends on whether he is a licensee or permittee of the United States, whether the mining waste material was a mineral deposit subject to location, and whether removal of the mineral deposit interfered with mining or processing operations. See 30 U.S.C. § 612(b). These are questions of fact. The District Court did not address these questions in its summary judgment order, and we will not address them here. Based on the foregoing, however, the District Court erred when it decided that, as a matter of law, TAGS’s lode claim did not give it a sufficient interest to maintain its trespass action.
¶ 16 Regardless, Runkle urges us to affirm the District Court’s decision as correct despite its incorrect reasoning. Specifically, he argues that he owned the waste materials as a successor in interest to the Black Friday claim’s former owner, that the waste became his personalty before TAGS located its claim, and that TAGS’s claim was subject to his interest in the waste material. These arguments, however, are fact-dependent inquiries that may turn on, for example, the origin of the mining materials, whether the mining materials were abandoned, the validity of TAGS’s claim, the validity of Runkle’s placer claim, ownership of the land at the time the materials were dumped, or classification of the property interest conveyed to Runlde when he purchased the Black Friday claim. Boscarino, 207 Mont. at 120, 672 P.2d at 1124; Conway, 108 Mont. at 305-09, 89 P.2d at 1028-31; 6 Rocky Mountain Mineral Law Foundation, American Law of Mining § 205.07[3], 205-21 to -23 (Cheryl Outerbridge & Margo MacDonnell, eds., 2d ed. 2013). Given the variety of facts that may be relevant, and the limited bases upon which the District Court made its summary judgment order, we will not address these arguments.
CONCLUSION
¶17 The District Court erred when it granted summary judgment in Runkle’s favor. Its conclusion that TAGS’s lode claim was not a property interest sufficient to support TAGS’s causes of action was incorrect, and its decision that TAGS’s lode claim was invalid was erroneously made on an issue of which neither party had notice and to which neither party had the opportunity to respond. For these reasons, the judgment of the District Court is reversed and remanded for further proceedings in conformity with this Opinion.
CHIEF JUSTICE McGRATH, JUSTICES BAKER, COTTER and SHEA concur.
|
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Montana Health Network, Inc. (MHN) appeals from the order of the Montana Eighth Judicial District Court, Cascade County, denying its motion for summary judgment and granting summary judgment to Great Falls Orthopedic Associates (GFOA). We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 MHN maintains a multiple employer health and welfare plan and trust known as the Montana Health Network Health Insurance Plan & Trust (the Plan). MHN is the designated Sponsor and Trustee of the Plan and was its sole drafter. GFOA is a medical clinic located in Great Falls which provides medical services to residents of Great Falls and the surrounding areas.
¶3 Around October 1, 2005, GFOA and MHN executed a document entitled Montana Health Network Health Insurance Plan & Trust Adoption Agreement (the Adoption Agreement) under which GFOA would adopt the Plan for purposes of obtaining coverage for its employees and would agree to be bound by its terms. The Adoption Agreement was drafted by MHN specificallyfor GFOAandbyits terms incorporated the Plan.
¶4 The initial term of the Adoption Agreement ran from October 1, 2005 to December 31, 2008. The Adoption Agreement was then automatically renewed for a two year term beginning on January 1, 2009 and running until December 31, 2010. By the provisions of the Adoption Agreement and the Plan, the automatic term renewals would continue eveiy two years unless GFOA provided notice of its intent not to renew at least 30 days prior to the commencement of a new term.
¶5 On December 10,2010, GFOA sent MHN an e-mail stating that it did not wish to renew the plan for the 2011-2012 term. GFOA followed up on that e-mail with a letter dated December 15, 2010, wherein GFOA stated that it wished to withdraw from the Plan on January 15, 2011. At the time, the Plan covered around 30 eligible GFOA employees.
¶6 MHN denied GFOA’s attempt to withdraw from the Plan, pointing out that under the Plan GFOA was required to give notice by December 1, 2010, if it wished to avoid automatic renewal of the Adoption Agreement for the term of January 1,2011 to December 31, 2012.
¶7 GFOA did not challenge MHN’s refusal to grant a withdrawal from the Plan. Instead, GFOA submitted waivers of coverage for 27 of its covered employees, and ceased submitting premium payments for those employees. Five GFOA employees remained covered by the Plan and GFOA continued to pay premiums for their coverage.
¶8 The GFOA employee waivers were submitted pursuant to Paragraph 4 of the Adoption Agreement, which stated, in part:
[a]n employee may waive coverage for any Plan Year by executing and returning a waiver form provided by Montana Health Network, Inc. at the time provided for initial enrollment, or during the annual enrollment period.
¶9 MHN denied the waivers based on the fact that, if the waivers were granted, GFOA would not be in compliance with Section 2.1 of the Plan, which stated, in part:
Lilt shall be a continuing condition of participation by any Eligible Employer that seventy-five percent of such Eligible Employer’s Employees in each class of Eligible Employees be Participants in the Plan.
¶10 GFOA did not remit payment for the premiums of the 27 employees who submitted waivers. On March 4,2011, MHN declared GFOA in default and, under an acceleration provision in the Plan, assessed liquidated damages of $400,674.00, immediately due and payable. GFOA did not pay the assessed damages.
¶11 On May 6, 2011, MHN filed a breach of contract action against GFOA. Both parties moved for summary judgment. On September 23, 2013, the District Court issued an order denying summary judgment to MHN and granting summary judgment to GFOA. The court later amended its judgment to grant attorney’s fees to GFOA. MHN appeals.
STANDARDS OF REVIEW
¶12 We review a district court’s grant of a summary judgment motion de novo, applying the same Rule 56, M. R. Civ. P. criteria as the district court. Krajacich v. Great Falls Clinic, LLP, 2012 MT 82, ¶ 8, 364 Mont. 455, 276 P.3d 922. The interpretation of a contract, including whether the contract is ambiguous, is a question of law, which we review for correctness. Johnston v. Centennial Log Homes & Furnishings, Inc., 2013 MT 179, ¶ 25, 370 Mont. 529, 305 P.3d 781.
DISCUSSION
¶13 In granting summary judgment to GFOA, the District Court found that the waiver provision of the Adoption Agreement and the 75% provision of the Plan conflicted such that the contract as a whole was ambiguous. The court therefore interpreted the contract most strongly against the drafter, MHN, and found that GFOA did not breach the contract.
¶14 MHN argues that the District Court erred when it concluded that the contract was ambiguous. MHN further argues that, if we reverse the District Court, we should uphold the validity of the acceleration clause or, in the alternative, remand for a determination of actual damages. However, because we affirm, we need not address the enforceability of the acceleration clause. As an additional matter, we will address GFOA’s request for attorney’s fees incurred defending this appeal.
¶15 Did the District Court err when it found the contract ambiguous and granted summary judgment to GFOA?
¶16 As a preliminary matter, we note that the Adoption Agreement and the Plan must be interpreted as part of a single contract. “Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction are to be taken together.” Section 28-3-203, MCA. As explained by the District Court, “|h]ere, the Plan and Adoption Agreement are not mutually exclusive. The Plan is only enforceable through the Adoption Agreement. The Adoption Agreement binds the parties to the Plan. This Court must interpret the contracts as an integrated agreement.” We will likewise consider provisions in the Plan and in the Adoption Agreement to be part of the same document.
¶17 As stated above, Paragraph 4 of the Adoption Agreement reads in part:
[a]n employee may waive coverage for any Plan Year by executing and returning a waiver form provided by Montana Health Network, Inc. at the time provided for initial enrollment, or during the annual enrollment period.
Section 2.1 of the Plan states in part:
[i]t shall be a continuing condition of participation by any Eligible Employer that seventy-five percent of such Eligible Employer’s Employees in each class of Eligible Employees be Participants in the Plan.
¶18 The District Court concluded that these two provisions were irreconcilable and thus created an ambiguity in the contract. MHN disagreed, arguing that it was a perfectly reasonable construction of the contract to interpret Paragraph 4 as allowing employees to waive coverage while at the same time interpreting Section 2.1 as requiring the employer to pay premiums for at least 75% of eligible employees, regardless of how many had waived coverage. The District Court reasoned that this construction would create an absurd result. As the court explained, MHN’s proposed interpretation would require GFOA to pay premiums for 75% of eligible employees even if all employees waived coverage. Furthermore, the open enrollment period for employees ended on December 31 of the plan year. Thus, on its December 1 withdrawal deadline, GFOA would not necessarily have known whether MHN would meet the 75% participation requirement for the upcoming year.
¶19 The District Court pointed out that MHN was the sole drafter of both the Adoption Agreement and the Plan, but failed to include any provision that could reconcile conflicts between the two parts of the contract. As a result, the court turned to general principles of contract interpretation. The court enunciated the rule of construction that, in general, if the terms of a later contract contravene the terms of a former contract, the later contract controls. Applying this principle, and considering the fact that MHN drafted the Adoption Agreement specifically for GFOA, whereas the Plan was drafted for general application, the District Court concluded that the Adoption Agreement was adopted to modify the Plan. Thus, the court found Paragraph 4 to be controlling with respect to Section 2.1. As a result, the court found that GFOA properly submitted waivers for 27 of its employees, and there was no breach of contract.
¶20 We agree with the District Court’s analysis. A contract must be given a reasonable interpretation. Section 28-3-201, MCA. The language of a contract governs its interpretation unless that language would result in an absurdity. Section 28-3-401, MCA. In other words, interpretation must be reasonable. Section 1-3-233, MCA.
¶21 We recognize that in interpreting a contract we must endeavor to give effect to every part of the contract whenever reasonably practical. Section 28-3-202, MCA. In this case, however, giving effect to both provisions at issue is not reasonably practical. As written, the interplay between Paragraph 4 and Section 2.1 is ambiguous. Paragraph 4 of the Adoption Agreement provides the employees with the unqualified power to waive coverage, and nothing elsewhere in the Adoption Agreement requires the employer to pay premiums for employees who decide to waive that coverage. However, Section 2.1 of the earlier Plan imposes upon the employer the strict duty to maintain 75% participation. We do not see how the right granted to the employees can be plainly reconciled with the duty imposed on the employer, except, as noted by the District Court, in the absurd interpretation whereby the employer would be required to pay coverage premiums for employees who have waived coverage. Montana law compels us to reject an interpretation that would lead to absurdities. We are left to conclude that one provision must take precedence over the other. Either employees have the unqualified right to waive coverage, regardless of any effect on participation percentages, or employers have the implied right to prohibit employee waiver in order to maintain 75% participation. Each of these interpretations is reasonable, but neither is expressly favored in the contract.
¶22 Where contracts are ambiguous, we will construe the ambiguity “most strongly” against the drafter. West v. Club at Spanish Peaks L.L.C., 2008 MT 183, ¶ 53, 343 Mont. 434, 186 P.3d 1228; § 28-3-206, MCA. In this instance, it is undisputed that both the Plan and the Adoption Agreement were drafted solely by MHN. Thus, we construe the ambiguity and confusion engendered by the conflicting provisions most strongly against MHN.
¶23 Furthermore, as explained by the District Court: when the terms of a former contract are contradicted by the terms of a later contract relating to the same subject matter, the later contract controls. Bridaham v. Moore, 199 Mont. 161, 166, 648 P.2d 731, 734 (1982); Kester v. Nelson, 92 Mont. 69, 74, 10 P.2d 379, 380 (1932); see also Frank v. Cobban, 20 Mont. 168, 171, 50 P. 423, 424 (1897). The Plan was originally drafted by MHN in 1993 and — prior to GFOA adopting the Plan by executing the Adoption Agreement in October 2005 — was last amended in November 2003. Thus the doctrine that the most recent contract controls would result in Paragraph 4 being read as the controlling provision.
¶24 Additionally, the fact that the Plan was drafted to apply generically to Qualified Employers, whereas the Adoption Agreement was drafted specifically for GFOA, suggests that the Adoption
Agreement was meant to contain specific provisions that might alter or supersede provisions of the Plan. “Particular expressions qualify those which are general.” Section 1-3-225, MCA. Or, as stated by the District Court:
[i]mportantly, the Plan is generic in its application to participants like GFOA. The Adoption Agreement, on the other hand, is specific to GFOA’s adoption of the generic Plan. A reasonable interpretation is that the Adoption Agreement inherently modifies the Plan as it applies to GFOA.
¶25 Finally, the District Court noted that MHN’s conduct in failing to enforce the 75% provision supports the interpretation that the waiver clause controls. MHN’s CEO testified that MHN never treated the waiver provision as limited by the 75% provision. Furthermore, MHN admits that it never enforced the 75% provision, never rejected a waiver based on the provision, and in fact had no enforcement mechanism in place. The District Court correctly found that MHN’s conduct with respect to the 75% provision supported the conclusion that the waiver provision was meant to modify the 75% provision, not vice versa.
¶26 Is GFOA entitled to attorney’s fees under the plan for defending this appeal?
¶27 GFOA requests attorney’s fees incurred while defending this appeal. MHN does not contest GFOA’s request. The Plan and the Adoption Agreement contain nearly identical provisions requiring the Employer to indemnify MHN for all expenses, including attorney’s fees, arising out of a breach of the contract. In Montana, provisions granting attorney’s fees to one party are reciprocal by statute. Section 28-3-704, MCA, provides:
Whenever, by virtue of the provisions of any contract or obligation in the nature of a contract ... one party to the contract or obligation has an express right to recover attorney fees from any other party to the contract or obligation in the event the party having that right brings an action upon the contract or obligation, then in any action on the contract or obligation all parties to the contract or obligation are considered to have the same right to recover attorney fees and the prevailing party in any action, whether by virtue of the express contractual right or by virtue of this section, is entitled to recover reasonable attorney fees from the losing party or parties.
¶28 Applying the statute, it is clear that GFOA has the right to recover attorney’s fees under the terms of the contract if it is the prevailing party. MHN does not contest this assertion. Because we affirm the District Court, GFOA is the prevailing party in this action and is entitled to the reasonable attorney’s fees accrued while defending this appeal.
CONCLUSION
¶29 We concur with the District Court that the 75% provision of Section 2.1 of the Plan and the waiver provision of Paragraph 4 of the Adoption Agreement are incompatible and render the contract ambiguous. Interpreting the contract most strongly against the drafter, and considering the facts that the Adoption Agreement is the most recent document, that the Adoption Agreement was meant to apply specifically to GFOA while the Plan was prepared for generic use, and that MHNTs conduct demonstrated a lack of concern for enforcing the 75% provision, we conclude that the waiver provision controls. Thus GFOA properly submitted waivers for 27 employees and did not breach the contract by falling below 75% participation. The District Court did not err when it interpreted the contract thusly and granted summary judgment to GFOA. Because we determine that GFOA did not breach the contract we need not consider the enforceability of the acceleration clause in the Plan. GFOAis entitled to its attorney’s fees accrued while defending this appeal.
¶30 Affirmed.
JUSTICES SHEA, COTTER, BAKER and RICE concur.
|
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Posnien, Inc., appeals from the entry of judgment by the Eleventh Judicial District Court, Flathead County, finding that Posnien lacked “rights in the collateral” of the economic interest in the Allstate agency sold to Baird 7, and therefore cannot sustain a claim for conversion against Allstate. We reverse and remand for further proceedings, addressing the following issue:
¶2 Did the District Court err in determining that Posnien retained no security interest in the Místate agency book of business sold to Baird 7 pursuant to the terms of Allstate’s Contract Documents?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Fay MasonPosnien was an Exclusive Agent for Allstate, heroffice located in Kalispell. In 2000, Fay incorporated Posnien, Inc., after Allstate informed her it would no longer permit agencies to operate as sole proprietorships. In 2006, Fay decided to sell the agency and retire. After Allstate placed an advertisement on its website listing the agency for sale, Mary Baird, incorporated as Baird 7, offered to purchase the agency from Posnien for $450,000.
¶4 Prior to selling the agency, Posnien was required to obtain Allstate’s approval of Baird 7 as the purchaser and the terms of the agreement. The process of obtaining Allstate’s approval required the involvement of Allstate’s Montana Field Manager, Mike Brown. During the process, Brown provided Baird with documents showing the agency’s history of revenue and expenses, while Baird provided Brown with a proposed business plan. Additionally, Brown reviewed Baird’s tax returns and other financial documents. Beyond the exchange of documents, Brown conducted personal interviews with Baird to determine whether he believed she would be successful as an Allstate agent. Following the process, Brown wrote a letter to Allstate recommending approval of the transaction, and Allstate ultimately approved transfer of the agency.
¶5 Under the agreement between the parties, Baird 7 agreed to make a $150,000 down payment. To make this payment, Baird 7 obtained a loan from Kenneth and Gretchen Gose, while Posnien agreed to finance the remainder of the purchase price. The book of business, understood as an agency’s “customer accounts,” was valued at $435,000 by the Buy-Sell Agreement.
¶6 On March 1,2007, the sale closed and Baird became an Exclusive Agent for Allstate. To become an Exclusive Agent, Mary Baird executed an Exclusive Agency Agreement (Agreement) with Allstate on behalf of Baird 7, incorporating by reference the Exclusive Agency Independent Contractor Manual (Manual). Under the Agreement, an agent owns an “economic interest” in the agency’s book of business, whichmay be used as collateral for business loans, although ownership is retained by Allstate. Part of the agent’s economic interest includes the option to receive termination payments at the time an agent decides to end her affiliation with Allstate. Pursuant to the Agreement, Baird collateralized her right to receive termination payments to secure a loan from the Goses. Baird similarly granted Posnien a security interest in the book of business. Baird executed a UCC Financing Statement at the time of closing, stating that Posnien had a security interest in the book of business along with all assets owned by the Baird 7 agency. On March 2,2007, Posnien filed the statement with the Secretary of State and the Flathead County Clerk and Recorder.
¶7 The agency continued to be successful following the transfer until Baird’s termination as an agent on April 11, 2011. Under the Agreement, any agency relationship may be terminated for cause in instances of fraudulent conduct. Allstate learned Baird had falsified the date of loss on a claim for damage to her own boat under a personal Allstate policy. In response to Baird’s fraudulent claim, Allstate immediately closed the Baird 7 agency pursuant to the Agreement’s termination provisions and “parked” the book of business at the Pete Russell Allstate agency. In moving the book of business, comprised of approximately 1,400 policies, Allstate placed all of Baird 7’s paper files with the Russell agency and changed its computer system to allow access to the electronic files by Russell. Allstate made no more commission payments to Baird 7. Baird 7 made its final payment to Posnien in April 2011, still owing more than $280,000 on the debt to Posnien.
¶8 Under the Agreement, Allstate gave Baird 7 the option of either transferring its economic interest to an approved buyer or receiving a termination payment from Allstate. Baird 7 was given 90 days to sell the agency but failed to do so and subsequently opted to receive a termination payment in the amount of $148,174.69. Because Posnien and the Goses disputed whose lien had priority to the termination payment, Allstate withheld its disbursement of the funds and filed a Complaint in Interpleader on October 11,2011, to determine the rights of the parties. Posnien then filed a counterclaim against Allstate, alleging conversion (by interfering with its security interest and withholding commission payments) and interference with contractual relations. Posnien similarly counterclaimed against Baird 7, asserting Breach of Contract, Forgery, and Breach of the Covenant of Good Faith and Fair Dealing. In turn, Baird 7 filed counterclaims against Allstate, including Conversion, Intentional Interference with Prospective Advantage, Invasion of Privacy, Violation of the Montana Insurance Information and Privacy Protection Act, Intentional Infliction of Emotional Distress, and Negligent Infliction of Emotional Distress.
¶9 The Goses and Posnien subsequently entered into a settlement in which the Goses took 2/3 of the termination payment while Posnien received the remaining 1/3. As part of the settlement, Baird 7 assigned all of its claims against Allstate to Posnien, while Posnien agreed to dismiss all claims against Baird 7. Finally, while the settlement stipulated Allstate would no longer be subject to claims regarding the termination payments, Posnien retained the right to pursue any independent claims it had against Allstate, including those assigned by Baird 7. Posnien exercised this right under the settlement agreement and pursued its remaining claims against Allstate.
¶10 On March 4, 2013, Posnien filed a motion for partial summary judgment on the claim of conversion. Allstate likewise filed a motion for summary judgment seeking dismissal of Posnien’s claim. Following a hearing, the District Court entered an order denying Posnien’s motion and granting Allstate’s. Posnien appeals.
STANDARD OF REVIEW
¶11 This Court Reviews a district court ruling on summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as a district court. Pilgeram v. Green Point Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. This Court must determine whether the district court applied the law correctly. Germann v. Stephens, 2006 MT 130, ¶ 21, 332 Mont. 303, 137 P.3d 545.
DISCUSSION
¶12 Did the District Court err in determining that Posnien retained no security interest in the Allstate agency book of business sold to Baird 7 pursuant to the terms of Allstate’s Contract Documents?
¶13 As the District Court stated, the central issue in this case is the scope of the security interest that Posnien was granted when it sold its economic interest in the agency book of business to Baird 7, specifically, what secured interest, if any, survived the termination of Baird 7’s economic interest in the agency. Citing § 30-9A-203(2)(b), MCA, which provides that a debtor may grant a security interest in collateral if the “debtor has rights in the collateral or the power to transfer rights in the collateral to a secured party,” the District Court concluded that because Baird 7’s interest was limited to a termination payment, Posnien retained no further “rights in the collateral” beyond the termination payment. Beasoning that “Baird 7 never possessed the right that would have entitled it to receive commission payments after it was terminated for cause,” the court concluded that Posnien was likewise not entitled to future commission payments.
¶14 Posnien has argued that its right to secure its interest encompassed the termination payment, ongoing commissions generated by the policies, and an economic interest in the agency book of business it sold to Baird 7. Posnien offers that, under Allstate’s contractual documents, an agent such as Baird 7 had rights in the book of business for use as collateral for a business loan from a lender, or to grant a security interest, as purchaser, to the seller of the book of business. During oral argument, Posnien slightly altered, or at least placed a different emphasis on, its position, conceding that the right to a security interest in renewal commission payments ended when Baird 7 lost the right to those payments upon termination of Baird 7’s agency. However, Posnien continues to argue that its security interest in the economic interest of the book of business was more expansive than those commissions alone or the termination payment Baird 7 received, arguing that “Posnien has a security interest, not just in the collateral, but in any proceeds generated from the collateral,” citing the UCC. Section 30-9A-315(l)(aXb), MCA, provides that a secured parly’s interest “continues in collateral notwithstanding sale, lease, exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest,” and also “attaches to any identifiable proceeds” from the collateral. See also § 30-9A-315, MCA. Posnien thus argues that its lien attached to the revenue Allstate is receiving from the proceeds that are being generated by the policies that have been parked by Allstate with a different agency.
¶15 Central to the resolution of this case are Allstate’s contractual documents controlling the parties’ legal relationships. While the question presented initially appears to sound in secured transactions, it is more appropriately characterized as one of contract. Allstate created an alternate universe of finance to govern the relationships between itself and its agents, as well as between agents, with its own guarantees, terminology and restrictions. It retained the ownership of the agency book of business, but permitted agents to hold an economic interest in the book of business, and incorporated selected legal principles regarding secured sales to govern agency-related financial transactions. Thus, usual principles governing secured transactions are circumscribed by the limited fashion in which they were incorporated into this contractual world. To “sell” an agency or an agency book of business is a relative term premised upon Allstate’s actual ownership of the book of business. Posnien, Baird, and Allstate were bound together through various contractual documents, most prominently the previously-mentioned Exclusive Agency Agreement (Agreement), the Exclusive Agency Independent Contractor Manual (Manual), and their Supplements, generally referred to herein collectively as the “Contract Documents,” which must be examined holistically to determine the parties’ rights.
¶16 Of primary importance is the Manual’s section entitled “Economic Interest in the Book of Business,” which defines an agent’s economic interest in her business as comprised of two elements:
You have an economic interest in the Allstate customer accounts developed under [the Contract Documents]. That economic interest is a specifically defined, limited interest. Subject to the terms and conditions set forth in [the Contract Documents], your economic interest in the business is comprised of only two elements:
First, the economic interest includes the option, where applicable, of Receiving a Termination Payment according to the terms of [the Contract Documents].
Second, the economic interest includes the ability, subject to approval of the company and other provisions of [the Contract Documents], to transfer your interest as provided in the [Agreement].
No other rights are included within the terms “your economic interest” or “economic interest in the book of business”.... You do not have any right to renewals or renewal commissions of any kind after termination of [the Agreement].
Of note, this definition of an agent’s economic interest in the book of business was provided by Allstate to both Posnien and Baird 7.
¶17 Readily apparent from a reading of this provision is that the economic interest in the book of business does not include “renewals or renewal commissions of any kind after termination” A similar provision is included in the termination for cause provisions of the Manual. Posnien’s argument, as refined, acknowledges that commissions are designed, as provided in the Agreement, to compensate the agent “for services rendered,” and therefore terminate upon termination of the agent’s Agreement with Allstate. Although commissions are included within the economic interest of the book of business while the Agreement is in effect, and an agent may then “assign a portion of his commission to a lender” under separate Manual provisions governing the assignment of commissions, the right to receive commissions ends upon termination of the agency Agreement. Thus, according to the Manual, Posnien’s right to receive commissions as compensation ended with the termination of Posnien’s Agreement upon the sale of the book of business to Baird 7, and Baird 7’s right to receive commissions, as well as Posnien’s right to lien Baird 7’s commissions, ended upon termination of Baird 7’s Agreement. Under these clear terms, Posnien has no security interest in the commission stream.
¶18 We return to the question of what Posnien’s economic interest in the book of business consisted of under the Contract Documents. Subject to Allstate’s approval of each transaction, the Agreement authorized agents to initiate a “sale, merger, or assignment” as well as a “conveyance, or the granting of [a] lien, security interest, pledge, or mortgage” of the economic interest. See also, Manual, p. 39 (“you may sell your economic interest in the book of business serviced by your agency at any time provided the Company approves the buyer.”). The authorization to assign the economic interest in the book of business also includes, under separate contract provisions, the ability to collaterally assign the agent’s commissions, the termination payment, and the proceeds of a sale of the economic interest in the book of business. These provisions are followed by further statements applicable to loan collateralizations. They provide that “[tjhe Company will not approve an assignment of your entire agreement as security for a loan,” and that, “if you assign your rights to the termination payments in order to secure a loan, you must disclose any such assignment, in writing, to any buyer of your economic interest in the book of business.” (emphasis added). Another section similarly provides, “if you assign your rights to your Termination Payment or commissions, you must disclose any such assignment to any buyer of your economic interest in the book of business.” (emphasis added). This language demonstrates that an agent’s entire economic interest in the book of business is more expansive than the right to receive commissions or the right to receive a termination payment. An agent can collateralize either her commissions or termination payment, and still sell her economic interest in the book of business, although she is required to notify the buyer of those outstanding liens. This demonstrates that, as argued by Posnien, the economic interest in the book of business is an asset that, while owned by Allstate, can provide value for the agent beyond sales commissions or a termination payment. While all of these options are not necessarily cumulative, it is clear that an agent is given the option under the Contract Documents of securing the value of her book of business upon sale to a willing buyer by taking a security interest in the book of business, which Posnien did, and which Allstate approved. Under the Contract Documents, Posnien thereby surrendered her rights to further commissions, as noted above, and a termination payment. See Manual, p. 39 (“If you elect to sell, you do not receive the termination payment from Allstate.”); p. 44 (“The termination payment will not apply if you sell your economic interest in the book of business.”).
¶19 Intervening in this transaction was the fraudulent action committed by Baird a few years later, and Allstate’s termination of Baird 7’s agency Agreement, in which Baird 7 exercised its option to receive a termination payment. Like the District Court, Allstate relies on § 30-9A-203(2), MCA, which provides that a security interest is enforceable only if “the debtor has rights in the collateral,” and argues that “any security interest that Baird 7 granted to Posnien was limited to the extent of Baird 7’s rights” in the book of business. Because Baird 7’s right was limited by the Contract Documents to the options of selling the book of business to a buyer approved by Allstate or accepting a termination payment, which right was satisfied by the termination payment, Allstate argues that Posnien was left without recourse to secure payment of the balance of its secured debt. Allstate offers that it “bears no responsibility for Baird 7’s failure to make the required loan payments or Posnien’s poor business decision.” Allstate thus takes the position that Baird 7’s acceptance of a payment from Allstate terminated not only Baird 7’s economic interest in the book of business, but also Posnien’s remaining economic interest in the book of business. Allstate’s argument is flawed for several reasons.
¶20 Allstate’s argument may be persuasive if this were an arm’s-length transaction within a free market. However, this transaction occurred within Allstate’s closed contract world wherein it had placed limitations upon, and made promises to, the agents. In the Manual, Posnien was promised that “[y]ou will have an economic interest in the Allstate customer accounts you develop” and “[y]ou are able to realize such interest upon the termination of your [Agreement].” To “realize” her interest as promised by Allstate, Posnien surrendered her rights to ongoing commissions and to a termination payment and instead chose another option granted by Allstate, as discussed above, to sell and take a security interest in her economic interest in the book of business. As stated in the defined economic interest provision, Posnien’s interest “include[d] the ability, subject to [the Contract Documents], to transfer your interest....” That “ability” included the right to secure her interest in the book of business.
¶21 This “ability” was made subject to the Contract Documents, which Allstate argues limited Baird 7’s interest under the termination procedure commenced for the fraud and thereby likewise limited Posnien’s secured interest in Baird 7’s interest. However, in stark contrast to the provisions clearly stating that the right to receive commissions and the option to receive a termination payment end upon termination of an agent’s economic interest, nothing in the Contract Documents remotely suggests that a selling agent’s broader secured interest in a book of business was subject to forfeiture upon a subsequent decision by Allstate to terminate the buying agent’s interest in the book of business or, in other words, that the termination of Baird 7’s defined economic interest by way of the termination procedure would also extinguish Posnien’s defined economic interest. Indeed, Posnien had every reason to understand just the opposite.
¶22 First, as mentioned above, the Contract Documents clearly provided Posnien a defined economic interest and promised that she would be able to “realize” this interest. This was a contractual promise to Posnien that was separate from Allstate’s contractual promise to Baird 7. Both were given the limited options by Allstate of either taking a termination payment or selling their interest to another approved buyer while retaining a secured interest. Baird 7 took the payment, while Posnien took the secured interest. Then, as Posnien notes, § 30-9A-315(l)(a), MCA, provides that a security interest “continues in collateral notwithstanding sale, lease, license exchange, or other disposition thereof unless the secured party authorized the disposition free of the security interest... .” (emphasis added). As a general rule of law, Posnien’s secured interest followed the collateral. There was particularly no concern over the collateral’s disposition here, where the book of business, though retaken by Allstate from Baird 7, was part of a closed contractual system and remained in Allstate’s ownership and possession — the accounts weren’t going anywhere. It was incumbent upon Allstate, if it intended Baird 7’s termination payment to extinguish Posnien’s security interest, to either contractually provide for the same, or to obtain Posnien’s release of her interest under § 30-9A-315(l)(a), MCA. Lastly, the Contract Documents provided that secured interests would be honored. The Manual’s section entitled “Transfer of Economic Interest” requires that “any business loan secured by your rights and economic interest in the business” must be repaid before an economic interest can be transferred. This is consistent with the provisions, discussed above, that any secured interests in the economic interest of the agent must be disclosed to a buyer. Clearly, Posnien’s interest was not exclusively hitched to Baird 7’s wagon.
¶23 These provisions did not make Allstate the guarantor of the debt owed to Posnien by Baird 7. Posnien took the risk that the book of business she had sold would have sufficient value to generate proceeds to pay the debt, a risk taken upon the promise of Allstate, as owner of the book of business, that Posnien could maintain a security interest in the book of business, and upon Allstate’s approval of the transaction. Posnien also took the risk that Baird 7 would not be a successful agent, but that risk, including the possibility of Baird 7’s contractual termination, was likewise balanced by the legal right to maintain a secured interest in the collateral in the event Baird 7 failed.
¶24 Posnien’s rights upon disposition of the collateral under § 30-9A-315(l)(a), MCA, were not honored by Allstate and, as explained in the Official Comments to that section, the remedies for this violation include:
[This section] contains the general rule that a security interest survives disposition of the collateral. In these cases, the secured party may repossess the collateral from the transferee or, in an appropriate case, maintain an action for conversion. The secured party may claim both any proceeds and the original collateral but, of course, may have only one satisfaction.
Official Comment 2, § 30-9A-315(l)(a), MCA. Here, Posnien has pursued a conversion action.
¶25 “Proof of a claim for conversion requires that plaintiff own the property; that plaintiff have the right to possess the property; that defendant exercise unauthorized control over the property; and that plaintiff suffer damages.” Salminen v. Morrison & Frampton, PLLP, 2014 MT 323, ¶ 21, 377 Mont. 244, 339 P.3d 602. Posnien’s position in holding an economic interest in the book of business, having the right, as secured creditor, to possess, upon default of its agreement with Baird 7, the book of business, and Allstate’s unauthorized control over the book of business by excluding it from Posnien after Baird 7’s default, satisfies the liability elements of conversion.
¶26 Allstate’s termination payment made to Baird 7 was potentially applicable to Posnien’s lien, but Allstate chose not to honor the hen and, in any event, the payment was of insufficient amount to satisfy the hen. However, this payment may be credited to Allstate in a calculation of damages for conversion.
¶27 The District Court concluded that, even if Allstate had not prevailed on its motion for summary judgment on conversion, Posnien’s motion would be denied because genuine issues of material fact exist regarding “whether Goses or Posnien had the superior security interest, and thus the priority position to receive any assets from Baird 7.” It appears from the record that Groses claimed only entitlement to the termination payment, and that their claim was resolved by the settlement providing for distribution of that payment. Further, both Allstate and Posnien have indicated in their briefing that all claims of all parties, with the exception of Posnien’s counterclaim for conversion, have been settled.
¶28 Therefore, the entry of summary judgment in favor of Allstate is reversed and this matter is remanded for entry of partial summary judgment on liability in favor of Posnien, and for further proceedings consistent with this opinion for calculation of damages.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, BAKER, SHEA, McKINNON and WHEAT concur.
Allstate does not contest that Posnien’s security interest was properly perfected and attached at the time of sale. The dispute concerns the validity of Posnien’s interest following Baird 7’s termination as an agent.
Posnien and Baird 7 entered a Buy-Sell Agreement that provided for sale of Posnien’s “entire book of insurance business,” valued at $435,000, to Baird 7, and the granting of a security interest therein to Posnien. Baird 7, as buyer and debtor, executed a UCC Financing Statement indicating that seller Posnien had a security interest in “Debtor’s book of insurance business pertaining to Debtor’s Allstate insurance agency in Kalispell, Montana.” At oral argument, Allstate acknowledged that the book of business referenced in the Posnien-Baird 7 sales documents equated to the “economic interest in the book of business” referenced in the Contract Documents.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Taylor Nelson Pinder (Pinder) appeals from the order of the Second Judicial District Court, Silver Bow County, denying his motion to dismiss the Driving Under the Influence (DUI) charge against him. We affirm.
FACTUAL AND PROCEDURAL HISTORY
¶2 On February 14, 2013, Pinder crashed a truck into a light post outside the Super 8 Motel on Harrison Avenue in Butte, Montana. Butte-Silver Bow County police officers responded to the scene and, with the help of witnesses, located Pinder exiting a bathroom in the dining room of the motel. Pinder appeared intoxicated and was having difficulty standing, walking, speaking, or following verbal commands. The officers called for an ambulance to take Pinder to the hospital.
¶3 Shortly thereafter, a motel employee gave the officers a can of aerosol dust-remover that had been discovered in the same bathroom Pinder had exited earlier. The officers knew that dust-remover can be used as an inhalant.
¶4 At the hospital, Pinder was arrested for DUI. Pinder then consented to a blood draw for toxicological testing. The toxicology report revealed that Finder's blood contained 6.2 mcg/ml of 1,1-Difluoroethane (DFE), a chemical found in dust-remover.
¶5 Because Pinder had three prior DUI convictions, he was charged with felony DUI in violation of § 61-8-401(c), MCA, and misdemeanor reckless driving in violation of § 61-8-301(l)(a), MCA. He pled not guilty to both counts.
¶6 On September 30,2013, Pinder filed a motion to dismiss the DUI charge. An evidentiary hearing was held on October 31,2013. At the hearing, the court heard evidence that DFE is a recognized substance of abuse and its use can result in symptoms including lightheadedness, disorientation, loss of inhibition, dizziness, hallucinations, delusions, impaired judgment, cardiac arrest, and death. However, Pinder argued that Montana’s DUI statutes do not define “drug,” and therefore the District Court should have used use the definition of drug from §37-7-101(16), MCA, (the “Pharmacy” chapter of Title 37, “Professions and Occupations”) because it is the only section in the MCA that defines the term “drug.” According to Pinder, DFE does not fit within that definition of “drug” and thus the DUI charge against him should be dismissed. The court denied Finder’s motion in a written order on November 6, 2013.
¶7 Pinder entered into a plea agreement with the State and the court accepted his guilty plea on November 15, 2013. As part of the agreement, Pinder reserved his right to appeal the District Court’s denial of his motion to dismiss. Though Pinder later violated the terms of the plea agreement by failing to comply with conditions of his bail, the State does not contest Finder’s right to appeal the District Court’s decision.
¶8 Pinder now appeals the District Court’s denial of his motion to dismiss.
STANDARD OF REVIEW
¶9 We review a district court’s decision on a motion to dismiss a criminal case, and its decision on the interpretation of a statute, de novo for correctness. State v. Madsen, 2013 MT 281, ¶ 6, 372 Mont. 102, 317 P.3d 806.
DISCUSSION
¶10 Section 61-8-40K l)(c), MCA, states that it is unlawful for a person who is under the influence of “any other drug to drive or be in actual physical control of a vehicle within this state.” “ “Under the influence’ means that as a result of taking into the body alcohol, drugs, or any combination of alcohol and drugs, a person’s ability to safely operate a vehicle has been diminished.” Section 61-8-401(3)(a), MCA.
¶11 Pinder argues that, because the term “drug” is not specifically defined in Montana’s DUI statutes or elsewhere in the criminal code, the District Court should have applied the definition of “drug” from § 37-7-101( 16), MCA, which provides definitions related to the licensing and regulation of pharmacies. That statute states:
As used in this chapter, the following definitions apply:
(16) “Drug” means a substance:
(a) recognized as a drug in any official compendium or supplement;
(b) intended for use in diagnosis, cure, mitigation, treatment, or prevention of disease in humans or animals;
(c) other than food, intended to affect the structure or function of the body of humans or animals; and
(d) intended for use as a component of a substance specified in subsection [(a), (b), or (c)].
Sections 37-3-101(16)(a)-(d), MCA. According to Pinder, DFE does not meet this definition and should not be considered a “drug” for the purposes of § 61-8-401, MCA. Therefore, Pinder was not driving under the influence of a “drug” and the DUI charge against him should have been dismissed by the District Court.
¶12 In denying Finder’s motion to dismiss, the District Court reasoned that it would be illogical and counter to legislative intent to use the pharmaceutical definition of “drug” in applying the DUI statute. Instead, the court used a plain meaning definition of “drug” taken from Black’s Law Dictionary, “[a] natural or synthetic substance that alters one’s perception or consciousness.” 571, (Bryan A. Gamer ed., 9th ed. 2009). The court concluded that DFE qualified as a “drug” under that definition and therefore did not dismiss the DUI charge.
¶13 Pinder argues that we are compelled to use the pharmacy definition of “drug” defined by § 1-2-107, MCA, which states:
[w]henever the meaning of a word or phrase is defined in any part of this code, such definition is applicable to the same word or phrase wherever it occurs, except where a contrary intention plainly appears.
The State counters that the legislature’s use of the phrase “[a]s used in this chapter” prefacing the pharmacy definition section plainly shows the legislature’s contrary intention to use of the pharmacy definition of “drug” in the DUI statute.
¶14 In the past we have taken disparate approaches to whether prefatory phrases in statutory definitions such as “for the purposes of this section” or “as used in this Title,” satisfy the “contrary intention” language of § 1-2-107, MCA. In one line of cases we stated that such application phrases constitute contrary intentions and preclude the use of those definitions in sections not mentioned. In other cases we have held that the phrases indicate only that the legislature intended the particular application of the definitions in those parts of the code without preventing use of those definitions in other parts of the code.
¶15 As an example of the exclusionary approach, in Richter v. Rose, 1998 MT 165, 289 Mont. 379, 962 P.2d 583, we refused to apply the definition of “farm” given in the Montana Probate Code to the MCA sections covering eminent domain, because that “farm” definition was specifically applied to the Probate Code. Richter, ¶¶ 17-19. Similarly, in Billings Firefighters Local 521, Int’l Ass’n of Firefighters v. City of Billings, 1999 MT 6, 293 Mont. 41, 973 P.2d 222, we refused to apply to Title 7, chapter 3, MCA, a definition of “structure” that was applied to certain sections of Title 7, chapter 1, MCA. Billings Firefighters, ¶ 19. In State v. Merry, 2008 MT 288, 345 Mont. 390, 191 P.3d 428, while attempting to define “supervision and direction” (as used in the statutes regulating the administration of blood tests in DUI cases) we refused to apply definitions for “direct supervision,” “general supervision,” or “qualified medical direction” given in the sections regulating dental hygienists, hearing aid dispenser trainees, and respiratory care. We reasoned that the inclusion of the phrases “[for] the purposes of this section,” and “[a]s used in this chapter,” demonstrated that the legislature “plainly has limited the reach of these definitions, and thus, they cannot properly define the terms of [the DUI blood test section].” Merry, ¶ 15. Thus, under this line of cases, application phrases on definitions are seen as exclusionary, precluding application of the definition to other code sections.
¶16 On the other hand, the inclusionary approach is found in Mountain View Educ. Ass’n v. Mountain View Sch., 227 Mont. 288, 738 P.2d 1288 (1987), where we held that educators at Mountain View School were eligible to receive state benefits under Title 2, chapter 18, because they did not qualify as “schoolteachers” as used in that chapter. We reached that conclusion by determining that the Mountain View School employees did not fit the definition of “teacher” given in Title 20. We applied that definition in spite of the language “as used in this title” prefacing the Title 20 definition section. Mountain View Educ. Ass’n, 227 Mont. at 290-291, 738 P.2d at 1289-1290. Likewise, in Dept. of Rev. v. Gallatin Outpatient Clinic, (“Gallatin”) 234 Mont. 425, 763 P.2d 1128 (1988), we allowed the definition of “hospital” given in Title 50 to be applied to a tax statute under Title 15, despite limiting prefatory language in the definition. We stated:
“[t]he use by the legislature in Section 50-5-101, MCA, of the phrase ‘as used in parts 1 through 4 of this chapter’ does not show the legislature’s plain intent that the definitions were only to he applied in those parts of the code. Those words only indicate that the legislature intended the particular application of the definitions in those parts of the code, without limitation to the general use of the definitions in other parts of the code, pursuant to Section 1-2-107, MCA.”
Gallatin, 234 Mont. at 430, 763 P.2d at 1131.
¶17 More recently, in Judicial Stds. Comm’n v. Not Afraid, 2010 MT 285, 358 Mont. 532, 245 P.3d 1116, we applied the definition of “public office” given in Title 13 to issues involving the Montana Constitution and the Code of Judicial Conduct. We applied the definition despite the phrase “[a]s used in this title” prefacing the definition section. In doing so, we cited § 1-2-107, MCA, and Gallatin, and stated “[w]e see no clear indication that the statutory definition of ‘public office’ cannot be referenced for issues arising outside of Title 13.” Judicial Stds., ¶ 20. Under this line of cases, limitation clauses are seen as inclusionary, specifically applying the given definition to the listed sections, but not precluding application of the definition to other sections where appropriate.
¶18 In this case, however, we need not delve into the use of the phrase “as used in this chapter” in order to see that the legislature did not intend the pharmacy definition of “drug” to apply to the DUI statute. Words and phrases used in the statutes of Montana are construed according to context. Section 1-2-106, MCA. Thus, whether or not a “contrary intention” to using a given definition plainly appears must be considered according to context.
¶19 The context of the locations of the two uses of the term “drug” in the MCA at issue here makes it clear that the legislature did not intend to apply the pharmacy definition of “drug” to the DUI statute. The purpose of the pharmacy statutes is to regulate the administration of legal substances of clinically recognized medical value by licensed professionals. The purpose of the DUI statutes is to protect public safety by punishing individuals who choose to drive after ingesting “alcohol, drugs, or any combination of alcohol and drugs” that causes their “ability to safely operate a vehicle [to be] diminished.” Section 61- 8-401(3), MCA. Though some substances that would qualify as a “drug” under the pharmacy statute are intoxicating, many intoxicating substances that would impair a person’s ability to drive fall outside that definition. We do not think the legislature intended to limit the scope of the DUI statute by applying it only to drivers who may have diminished their driving ability by ingesting a substance regulated by pharmacists. The language of the statute plainly shows that the legislature intended to punish individuals who drive after ingesting “any” substance that diminishes their driving ability. Sections 61-8-401(lXc) and -401(3), MCA. Here, because “a contrary intention plainly appears,” § 1-2-107, MCA, does not compel us to apply the pharmacy definition of “drug” to the DUI statute. The District Court did not err when it refused to do so.
¶20 Having determined that the pharmacy definition does not apply to the DUI statute, we turn to whether the District Court used an appropriate definition for the term “drug.” We conclude that the court was correct. We recently stated that:
[a] judge’s role in statutory interpretation is to “ascertain and declare what is in terms or substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA. A court’s function is to determine legislative intent, and where that can be determined from the plain meaning of the words used, the plain meaning controls and a court need not go further or apply other means of interpretation. Statutory terms must be interpreted reasonably and logically, and given the natural and popular meaning in which they are usually understood.
The Legislature need not define every term it employs in a statute. If a term is one of common usage and is readily understood, a court should presume that a reasonable person of average intelligence can understand it. The failure to include definitions of all terms does not automatically make a statute vague as long as the meaning is clear and provides a defendant with adequate notice of the proscribed conduct.
Madsen, ¶¶ 8-9 (citations omitted).
¶21 The common and readily understood meaning of the word “drug” in the context of traffic regulations is a substance that alters one’s perception, consciousness, or impairs physical or mental abilities. This meaning is clear and provides adequate notice that driving a vehicle while under the influence of such a substance is prohibited. Furthermore, the definition comports with the legislature’s definition of “under the influence,” that is, “as a result of taking into the body alcohol, drugs, or any combination of alcohol and drugs, a person’s ability to safely operate a vehicle has been diminished.” Section 61-8-401(3)(a), MCA. As stated above, the legislature’s intent in enacting the DU1 statutes was plainly to protect public safely by punishingindividuals who drive after ingesting substances that impair their ability to operate motor vehicles. The District Court’s definition of “drug” is consistent with the legislature’s objectives in that regard.
CONCLUSION
¶22 The District Court was correct when it did not apply the pharmacy definition of “drug” and instead used a commonly understood plain meaning definition. Under that definition, DFE could be considered a drug and driving while under the influence of DFE a violation of § 61-8-401(l)(c), MCA.
¶23 Affirmed.
CHIEF JUSTICE McGRATH, JUSTICES BAKER, COTTER and RICE concur.
The “any other” in the statute is a reference to § 61-8-401(l)(b), MCA, which specifically prohibits driving wider the influence of a drug that is designated a “dangerous drug” by the board of pharmacy under § 50-32-202, MCA. DFE! is not currently designated a “dangerous drug” in Montana.
It also bears mentioning that the legislature is fully capable of expressly limiting definitions to apply only to a specified portion of the MCA. See, e.g. § 75-15-203, MCA (“As used in this part only, the following definitions apply:...§ 17-5-1302(15), MCA (“For this part only, the Montana higher education student assistance corporation... is considered a state issuer."); § 82-4-203(50)(b), MCA (“For the purposes of this part only, strip mining also includes remining and coal preparation").
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Shannon Amour sued Collection Professionals, Inc. (CPI) and Nancy Smith after CPI sought to collect Amour’s bill for Smith’s services as guardian ad litem (GAL) during Amour’s marriage dissolution proceedings. The Fourth Judicial District Court, Mineral County, entered summary judgment in favor of CPI and Smith. Amour appeals. The dispositive issues on appeal are:
1. Whether the District Court correctly awarded summary judgment to CPI on Amour’s Fair Debt Collection Practices Act claim because CPI was not attempting to collect a debt regulated by that statute.
2. Whether the District Court correctly awarded summary judgment to Smith.
3. Whether the District Court correctly awarded CPI $7,408.70 in damages plus interest.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In 2007, Amour filed for dissolution of her marriage. On January 24,2008, the court handling the action entered an order naming Smith as GAL for Amour’s children during the pendency of the dissolution proceedings. The order specified Smith’s duties, granted Smith judicial immunity, and specified that the gross marital estate was responsible for paying Smith for her work.
¶4 On February 4, 2008, Amour entered a contract with Smith specifying that Smith would be paid $90 per hour for her work, plus expenses. Smith billed Amour half the account and billed Amour’s ex- husband the other half. Amour paid some of the bills but stopped paying in May 2010. In November 2011, Smith assigned $6,975.60 in unpaid bills to CPI, which then notified Amour that she owed $7,511.74, including interest. On January 20, 2012, the dissolution corut entered an order stating that the “individual debts to the GAL are solely the responsibility of the individuals and are not a debt of the marital estate,” and that the “Parties’ individual debts including ... their individual debt to the GAL are the responsibility of each party individually.”
¶5 In March 2012, CPI filed a complaint injustice court to collect the debt. Amour filed a counterclaim exceeding the justice court’s jurisdictional limit and the case was dismissed. Amour then filed a complaint in the District Court alleging that CPI violated the Fair Debt Collection Practices Act (FDCPA) through attempting to collect a false debt; that Smith committed defamation by falsely publishing to third parties that Amour owed a debt; and that Smith violated the Montana Consumer Protection Act through her actions. CPI counterclaimed for the amount owed for Smith’s services under theories of breach of contract and breach of a court order. Later that year, CPI and Smith filed motions for summary judgment.
¶6 In November 2013, the District Court awarded Smith summary judgment in lull and CPI summary judgment in part, reserving the issue of the amount of damages due to CPI for Amour’s failure to pay her account. In July 2014, the District Court entered judgment in favor of CPI in the amount of $7,408.70 in principal plus interest from the date of Smith’s assignment of the account to CPI. Amour appeals the District Court’s entries of summary judgment in favor of CPI and Smith.
STANDARD OF REVIEW
¶7 We review summary judgment orders de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. After the moving party meets its initial burden to show the absence of a genuine issue of fact and entitlement to judgment, the burden shifts to the party opposing summary judgment either to show a triable issue or to show why the undisputed facts do not entitle the moving party to judgment. Phelps v. Frampton, 2007 MT 263, ¶ 16, 339 Mont. 300, 170 P.3d 474.
DISCUSSION
¶8 1. Whether the District Court correctly awarded summary judgment to CPI on Amour’s FDCPA claim because CPI was not attempting to collect a debt regulated by that statute.
¶9 The FDCPA regulates the collection of debts, but only the collection of those debts that fall under the terms of the statute. Hawthorne v. Mac Adjustment, 140 F.3d 1367, 1371 (11th Cir. 1998) (“By the plain terms of the statute, not all obligations to pay are considered ‘debts’ subject to the FDCPA.”). The FDCPA defines “debt” as “[AJny obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services, which are the subject of the transaction, are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.” 15 U.S.C. § 1692a(5). A “transaction” under the FDCPAmust be a consensual arrangement. Hawthorne, 140 F.3d at 1371. Thus, “[w]hen determining whether an obligation is a ‘debt’ under the statute, courts focus on whether it arose from a consensual consumer transaction for goods or services.” Omran v. Beach Forest Subdivision Ass’n, Inc., No. 12-10116, 2012 U.S. Dist. LEXIS 66277, at *7 (E.D. Mich.) (concluding that fines for breaking subdivision deed restrictions are not debts under the FDCPA); see Gulley v. Markoff & Krasny, 664 F.3d 1073, 1075 (7th Cir. 2011) (per curium) (concluding that the FDCPA does not apply to efforts to collect city real estate fines); Hickenv. Arnold, Anderson & Dove, P.L.L.P., 137 F. Supp. 2d 1141, 1143 (D. Minn. 2001) (concluding that a debt arising out of a marital settlement agreement does not fall within the FDCPA).
¶10 CPI asserts, and the District Court concluded, that Amour’s debt to Smith did not arise out of a consensual transaction. Amour contests this conclusion, arguing that her debt to Smith arose out of the contract that Amour and Smith entered into in February 2008 specifying the amount that Amour would pay Smith for her services. Amour fails to recognize, however, that the February 2008 contract followed the dissolution court’s January 2008 order appointing Smith as GAL and directing that the marital estate would be responsible for paying Smith for her services. In its January 2012 order, the court then assigned half that debt to Amour personally. With or without the contract between Amour and Smith, Amour still would have been under court order for Smith’s services. Indeed, in response to a request for admission, Amour stated that her contract with Smith was “a document I was ordered to sign” by the dissolution court. Amour also stated in her complaint that the dissolution court ordered Smith appointed as GAL, and that Amour “did not want the services of Smith and did not request them.” Under these circumstances, it is clear that Amour's debt to Smith did not arise out of a consensual transaction and therefore that the FDCPA does not apply.
¶11 Amour also argues that CPI effectively admitted that the FDCPA regulates its debt collection efforts by sending Amour a letter referring to Amour’s account as a “debt.” But the question is not whether Amour was indebted to Smith; the question is whether the debt is the type of debt that the FDCPA regulates. It is not, because the debt did not arise out of a consensual transaction.
¶12 The District Court correctly awarded CPI summary judgment on Amour’s FDCPA claim.
¶13 2. Whether the District Court correctly awarded summary judgment to Smith.
¶14 The District Court granted summary judgment to Smith on Amour’s state law claims on two grounds, first, the court determined that Amour failed to raise a genuine issue of material fact about those claims, and that, in the absence of such a dispute, Smith was entitled to judgment. Second, the court determined that Smith was due quasi-judicial immunity for her actions as GAL. Amour contests both of these determinations.
¶15 Amour alleged two claims against Smith: defamation and violation of the Montana Consumer Protection Act. The District Court held that, as a court-appointed GAL, Smith was entitled to absolute quasi-judicial immunity under § 2-9-112(2), MCA. That section provides in pertinent part that an “agent of the judiciary is immune from suit for damages arisingfrom the lawful discharge of an official duly associated with judicial actions of the court.” We have extended immunity to participants in the judicial process when they are acting in a quasi-judicial capacity. Steele v. McGregor, 1998 MT 85, ¶¶ 25-30, 288 Mont. 238, 956 P.2d 1364.
Like judicial immunity, quasi-judicial immunity benefits the public — not the person being sued — by ensuring that quasi-judicial officers exercise their functions unfettered by fear of legal consequences; also like judicial immunity, quasi-judicial immunity extends only to acts within the scope of the actor’s jurisdiction and with the authorization of law.
Steele, ¶ 26. Though we have not addressed the application of quasi-judicial immunity to a GAL, other courts have determined that GALs are entitled to absolute quasi-judidal immunity. See Surprenant v. Mulcrone, 44 A.3d 465, 468 (N.H. 2012) (“Absolute judicial immunity attaches when a GAL performs certain delegated duties because of the intimate relationship between the GAL and the court in the judicial process.”) (quoting Marr v. Me. Dept. of Human Servs., 215 F. Supp. 2d 261, 268 (D. Me. 2002)). Courts recognize that judicial immunity protects against harassment by disgruntled parents and ensures the GAL’s independence. See Carrubba v. Moskowitz, 877 A.2d 773, 784 (Conn. 2005). “A guardian must be free, in furtherance of the goal for which the appointment was made, to engage in a vigorous and autonomous representation of the child.” Tindell v. Rogosheske, 428 N.W.2d 386, 387 (Minn. 1988).
¶ 16 The District Court’s January24,2008 order appointing Smith as GAL explicitly stated that she was an “agent” of the court “and as such is granted judicial immunity.” The statute authorizing appointment of a GAL in a parenting proceeding makes clear that the GAL is an officer of the court, tasked with conducting investigations, making reports and recommendations to the court, and performing other duties as the court directs. Section40-4-205, MCA. Amour argues that Smith did not act as an agent of the court when she sent Amour a bill and sought to enforce collection. But the law requires the court to “enter an order for costs and fees in favor of the child’s guardian ad litem,” and directs the order to be made “against either or both parents.” Section 40-4-205(4), MCA. Judicial immunity extends to the GAL’s “performance of duties which are within the scope of such guardian’s authority.” Billups v. Scott, 571 N.W.2d 603, 607 (Neb. 1997). Smith’s attempt to enforce collection of payment from Amour was within the scope of her authority as GAL. We agree with the District Court that she is protected by quasi-judicial immunity under § 2-9-112(2), MCA, from Amour’s Montana Consumer Protection Act claim.
¶17 Under the circumstances of this case, we find it unnecessary to analyze whether judicial immunity would protect Smith from suit for Amour’s defamation claim, which alleges an intentional tort. Truth is a complete defense against a defamation claim. Citizens First Nat’l Bank of Wolf Point v. Moe Motor Co., 248 Mont. 495, 501, 813 P.2d 400, 404 (1991). Smith attached detailed billing statements withher motion for summary judgment. She also attached an affidavit attesting to the accuracy of those statements, to the duties she performed as GAL, and to the fact that Amour never disputed Smith’s services or disputed that she was required to pay for those services until the current litigation. Through this evidence, Smith met her “initial burden” of establishing the absence of any genuine issue of material fact and entitlement to judgment as a matter of law. Phelps, ¶ 16.
¶18 The burden accordingly shifted to Amour to respond with evidence showing a triable issue on her defamation claim. Phelps, ¶ 16. Amour responded with interrogatory responses that explained the basis for her claim that Smith misstated Amour’s debt and acted unfairly and deceptively. But these interrogatory responses were not signed. M. R. Civ. P. 33(b)(5) requires that interrogatory responses be signed. “[A] party opposing a motion for summary judgment may not rest upon his pleadings but has an affirmative duty to bring forth sworn testimony or affidavits [that] show a genuine issue.” Wright v. State, 231 Mont. 324, 327, 752 P.2d 748, 750 (1988) (emphasis added). We require “strict compliance” with M. R. Civ. P. 56’s evidentiary requirements. Smith v. Burlington N. & Santa Fe. Ry. Co., 2008 MT 225, ¶ 41, 344 Mont. 278, 187 P.3d 639. Courts do not consider unsworn or unsigned evidence at the summary judgment stage. See Alfson v. Allstate Prop. & Cas. Ins. Co., 2013 MT 326, ¶¶ 11-13, 372 Mont. 363, 313 P.3d 107; Silver v. Foster Wheeler LLC, No. 2:11-CV-64218-ER, 2012 U.S. Dist. LEXIS 29076, at *9-10 (E.D. Pa. Jan. 25,2012); Overton v. City of Harvey, 29 F. Supp. 2d 894, 901 (N.D. Ill. 1998). There was no evidence in the record that the District Court appropriately could consider that raised a triable issue on Amour’s defamation claim. The District Court therefore acted correctly in concluding that Smith was entitled to judgment.
¶19 On appeal, Amour admits that her interrogatory responses were not signed, but argues that she corrected that mistake by later submitting signed versions of those responses. By that time, however, the District Court already had granted Smith summary judgment. A court “need not consider untimely filed documents in proceedings for summary judgment.” Wright, 231 Mont. at 327, 752 P.2d at 750. Further, Amour challenged the performance of Smith’s duties as GAL for the first time after being sued for collection of the debt. The proper time to raise those challenges was in the underlying dissolution proceedings. Amour failed to present substantial evidence essential to her claims. See Smith, ¶ 55.
¶20 The District Court correctly awarded summary judgment to Smith.
¶21 3. Whether the District Court correctly awarded CPI $7,408.70 in damages plus interest.
¶22 In its November 2013 summary judgment order, the District Court, mindful that CPI and Smith had provided several different figures for the amount of debt that Amour owed, reserved the issue of the amount of damages due to CPI. A few months later, CPI moved for summary judgment on the amount of damages, attaching an affidavit from Smith stating that the amount owed was $7,408.70, and including billing statements accounting for that figure. The District Court then entered judgment in CPI’s favor in that number, plus interest, and appropriate costs.
¶23 On appeal, Amour argues that the District Court improperly resolved a factual dispute by determining that Amour owed $7,408.70 in principal. We disagree. CPI met its initial burden by submitting Smith’s affidavit and billing statements showing that $7,408.70 was due. The burden then shifted to Amour to identify evidence calling into question the accuracy of the amount billed. Amour instead submitted interrogatory responses that baldly alleged that Smith ran up charges without providing evidence to support that allegation. Additionally, the interrogatory responses attacked the competency with which Smith performed her actions as GAL, but Amour did not provide evidence that Smith did not in fact perform the actions that accounted for the debt of $7,408.70.
¶24 Amour also appeals the District Court’s award of interest on the principal amount. However, § 27-1-211, MCA, states:
Each person who is entitled to recover damages certain or capable of being made certain by calculation and the right to recover that is vested in the person upon a particular day is entitled also to recover interest on the damages from that day except during the time that the debtor is prevented by law or by the act of the creditor from the debt.
Section 27-1-211, MCA, has three requirements: (1) an underlying monetary obligation, (2) an amount of recovery that is certain or capable of being made certain by calculation, and (3) a right to recover that vests on a particular day. LHC, Inc. v. Alvarez, 2007 MT123, ¶ 29, 337 Mont. 294, 160 P.3d 502. All three requirements are met in this case. The District Court determined that there is an underlying monetary obligation, and that the right to recover vested in CPI after Smith assigned her account to CPI in November 2011. All of the billed-for actions occurred before November 2011. Amour disputes the amount that CPI should recover, but “ ‘the fact that a claim is disputed does not make it uncertain,’ as long as the damage amount is reduced to certainty on a particular day.” LHC, ¶ 29 (quoting Safeco Ins. Co v. Lovely Agency, 215 Mont. 420, 425, 697 P.3d 1354, 1357 (1985)).
CONCLUSION
¶25 The District Court’s November 2013 summary judgment order and July 2014 judgment in favor of CPI are affirmed.
CHIEF JUSTICE McGRATH, JUSTICES RICE, McKINNON and COTTER concur.
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JUSTICE McKINNON
delivered the Opinion of the Court.
¶1 M.KS. appeals from an Involuntary Mental Health Commitment Order entered by the Fourth Judicial District, Missoula County, committing her to the Montana State Hospital (MSH) for a period of not more than three months. We affirm.
¶2 We restate the issue on appeal as follows:
Whether the failure of the professional person to file a statutorily-required written report in M.K.S.’s civil commitment proceeding was plain error.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 M.KS. has a long history of treatment for schizophrenia and other mental health illnesses. In addition to being regularly subject to community commitments, primarily at the Western Montana Mental Health Center (WMMHC), M.K.S. has been hospitalized at the MSH on numerous occasions. District Court Judge Robert L. Deschampe has presided over M.KS.’s proceedings since June of 2007, although it appears M.K.S. has received treatment from WMMHC since 1999.
¶4 In November 2013, M.KS. stipulated to a six-month community commitment that would expire May 19,2014. The Community-Based Commitment Order provided that M.KS. would remain at the Neurobehavioral Unit at St. Patrick Hospital until she was stabilized and could be discharged to Dakota Place; that M.KS. would keep all of her appointments and follow the recommendations of her treating professionals; and that M.KS. would take all of her medications, including injectable medications.
¶5 On January 27, 2014, the State filed a “renewed” petition for commitment, stating that law enforcement had taken M.KS. to the Emergency Room at St. Patrick Hospital after she contacted the WMMHC crisis line and informed them she was suicidal and not safe in her home. WMMHC requested immediate assistance from law enforcement. When law enforcement arrived at M.K.S.’s home, she had laid all of her belongings out on the floor, was holding a knife, and said that she planned to cut her wrists. Emergency room staff requested a mental health evaluation. Thomas Hodgetts, LCSW, a member of the WMMHC crisis response team, evaluated M.KS. in the emergency room. M.K.S. was uncooperative and belligerent throughout the evaluation, insisting that she had not slept in five years. Based on M.KS.’s speech and behavior, Hodgetts opined that M.K.S.’s insight, judgment, and impulse control were negligible. Additionally, M.K.S. was respondingto internal stimuli. Hodgetts recommended emergency detention at MSH.
¶6 At an initial hearing held on January 27, 2014, M.K.S. was advised of her rights and detained by the court pursuant to § 53-21-122, MCA. A hearing on the State’s petition was scheduled for January 30,2014. The court appointed Jay R. Palmatier, Ph.D., a psychologist with WMMHC, as the professional person to examine M.K.S. prior to the commitment hearing. M.K.S. declined to speak with Palmatier during his evaluation. Palmatier informed M.K.S. that his recommendation to the court would be based on her most recent history if she chose not to speak with him. M.K.S. continued to refuse to cooperate with the evaluation. Palmatier did not file a written report of his findings and recommendations with the court as required by § 53-21-123, MCA.
¶7 At the commitment, hearing on January 30, 2014, Palmatier testified that M.K.S. had not been abiding by the terms of her community commitment and had failed to keep numerous appointments. Based on a review of M.KS.’s records, Palmatier testified that M.KS. was not taking her oral medications, and that her last injectable medication had been administered ten days late. Palmatier also explained that M.KS. had refused any in-home assistance, which was significant because M.KS. had a history of not cooking or eating well on her own. Palmatier explained that M.K.S. had been malnourished in the past.
¶8 Palmatier testified that M.KS. had largely remained silent dining his evaluation, but that he had evaluated M.KS. numerous times in the past. He testified that his findings and recommendations were based on her recent suicide threat as well as a review of her records from WMMHC and MSH. He stated that MSH was the only available treatment option, and that he believed M.KS. should remain there for a term of 90 days. Although Palmatier did not provide a written report of his findings and recommendations as required by § 53-21-123(1), MCA, M.K.S. did not object to the absence of a written report. M.K.S. proceeded with the hearing and conducted cross-examination of Palmatier.
¶9 M.K.S. testified on her own behalf, stating that she was no longer suicidal, that she was not a criminal, and that she had not harmed nor was a danger to anyone else. At the end of the proceeding, the District Court found that M.K.S. posed a danger to herself based on her recent suicidal threats, and that a commitment to MSH was necessary to guarantee her safety. The court found that MSH was the least restrictive and most appropriate environment for M.K.S. to receive effective treatment, until she could be discharged to a less restrictive care facility. M.K.S. timely appealed to this Court.
STANDARD OF REVIEW
¶10 This Court reviews a district court’s civil commitment order “to determine whether the court’s findings of fact are clearly erroneous and its conclusions of law are correct.” In re Mental Health of L.K.-S., 2011 MT 21, ¶ 14, 359 Mont. 191, 247 P.3d 1100. Issues of due process in an involuntary commitment proceeding are subject to plenary review. In re Mental Health of L.K., 2009 MT 366, ¶ 11, 353 Mont. 246, 219 P.3d 1263.
DISCUSSION
¶11 We note, preliminarily, that an appeal from an order of involuntary commitment is not rendered moot if the 90-day commitment period has ended or the individual has been released, as there is a reasonable expectation that the individual could be subject to the same action again, and the time period is too short to allow full litigation of the appeal. In re Mental Health of D. V., 2007 MT 351, ¶ 32, 340 Mont. 319, 174 P.3d 503. The matter therefore falls within an exception to the mootness doctrine for issues that are “ ‘capable of repetition, yet evading review.’ ” In re J.S.W., 2013 MT 34, ¶ 11, 369 Mont. 12, 303 P.3d 741 (quoting In re D.K.D., 2011 MT 74, ¶ 14, 360 Mont. 76, 250 P.3d 856).
¶12 Whether the failure of the professional person to file a statutorily-required written report in M.K.8.’s civil commitment proceeding was plain error.
¶13 Although we generally will not review issues raised for the first time on appeal, State v. Longfellow, 2008 MT 343, ¶ 19, 346 Mont. 286, 194 P.3d 694, we have determined that if a constitutional or substantial right is at issue, we may review an unpreserved claim under the plain error doctrine. State v. Gunderson, 2010 MT 166, ¶ 99, 357 Mont. 142, 237 P.3d 74. In an involuntary commitment proceeding, we may use plain error review to consider unpreserved error “because the respondent’s substantial right — liberty—is at stake....” In re B.O.T., 2015 MT 40, ¶ 22, 378 Mont. 198, 342 P.3d 981 (quoting/n re Mental Health of J.D.L., 2008 MT 445, ¶ 9,348 Mont. 1, 199 P.3d 805). We invoke plain error review “ ‘where failing to review the claimed error may result in a manifest miscarriage of justice, may leave unsettled the question of the fundamental fairness of the trial or proceedings, or may compromise the integrity of the judicial process.’ ” In re J.S.W., ¶ 15 (quoting Gunderson, ¶ 99). We have repeatedly stated that we will use plain error review sparingly and on a case-by-case basis. In re D.K.D., ¶ 16.
¶14 When an individual invokes the plain error doctrine to request review of issues that were not objected to at trial, our review is discretionary. In re J.S.W., ¶ 16; Gunderson, ¶ 99. The plain error doctrine establishes a two-part test, with the burden on the person facing involuntary commitment to meet both parts of the test. In re J.S.W., ¶ 17. Thus, M.K.S must establish that (1) the alleged error implicates a fundamental right; and (2) failure to review the alleged error would result in one of the three consequences stated above. In re J.S. W., ¶ 17. A mere assertion that a constitutional right is implicated or that failure to review the claimed error may result in a manifest miscarriage of justice is insufficient to implicate the plain error doctrine. In re J.S.W., ¶ 17 (quoting Gunderson, ¶ 100).
¶15 In these proceedings, M.KS. maintains that her constitutional right not to be deprived of her liberty absent due process of law was violated. M.K.S. argues that because the statutory requirement for filing a written report was not satisfied, her procedural due process rights were violated, and the judgment of commitment should be vacated. More specifically, M.K.S. asserts that the written report was essential to her ability to defend against the State’s petition, and to the District Court’s ability to be adequately informed about why Palmatier believed it appropriate to recommend commitment to MSH when, in the past, commitment to a community program had been sufficient. The State argues that although Palmatier did not provide the court with a written report prior to the commitment hearing, Palmatier testified at the hearing, providing the court and the parties ample time to hear his findings and recommendation. The State argues that because M.K.S. failed to object to the lack of a written report, and because the lack of a written report did not cause substantial prejudice or affect her liberty interest, this Court should decline to exercise its discretion under the plain error doctrine to review M.KS.’s claim.
¶16 “No person shall be deprived of life, liberty, or property without due process of law.” Mont. Const, art. 13, § 17. An individual facing involuntary commitment has all the rights guaranteed by both the United States Constitution and the Montana Constitution. Section 53-21-115, MCA. Montana’s statutory scheme governing involuntary commitment proceedings contains multiple safeguards to protect the due process rights of individuals facing the possibility of being involuntarily committed. Consequently, we have consistently emphasized that our civil commitment laws are to be strictly adhered to in such proceedings. In re L.L.A., 2011 MT 285, ¶ 9, 362 Mont. 464, 267 P.3d 1; In re Mental Health ofJ.D.L., ¶ 8. The statutes authorizing involuntary commitment are to be applied to ensure that the “ ‘government does not invade an individual’s freedom or liberty without due notice, cause and process.’ ” In re Mental Health of J.D.L., ¶ 8 (quoting In re the Mental Health of R.M., 270 Mont. 40, 45-46, 889 P.2d 1201, 1205 (1995)).
¶17 Section 53-21-123, MCA, provides that a respondent in a civil commitment proceeding must have a mental health examination conducted by a professional person after the initial hearing, and that the professional person must make a written report of the examination to the court and provide copies to both parties. The statutory requirement to file a written report setting forth the findings and recommendations of the professional person guarantees that the person who is the subject of the petition will be provided notice of the medical basis for the petition and have an opportunity to prepare a defense. The requirement is a procedural protection designed to insure that a person is not deprived of his or her liberty without adequate process. We conclude that M.K.S. has identified a constitutional right of due process that has been implicated in these proceedings and has therefore met her burden of establishing the first prong of the test for exercising plain error review.
¶18 In addressing the second prong of the test — whether the claimed error may result in a manifest miscarriage of justice, leave unsettled questions of the fundamental fairness of the proceedings, or compromise the integrity of the judicial process — we must “weigh[ ] the risk of depriving an individual’s liberty against the probable value of the procedure in question,” in this case, the filing of a written report. In re N.A., 2013 MT 255, ¶ 23, 371 Mont. 531, 309 P.3d 27. “[N]ot all errors of state law amount to deprivation of procedural due process; rather, we employ a flexible balancing test to determine whether a particular safeguard is required in a specific circumstance.” In re NA., ¶ 23 (citing Engle v. Isaac, 456 U.S. 107, 121 n.21, 102 S. Ct. 1558, 1568 n.21 (1982) and Mathews v. Eldridge, 424 U.S. 319, 334-35, 96 S. Ct. 893, 902-03 (1976)). We have held that when a procedural error results in no substantial prejudice to a party, the error is de minimus and does not affect an individual’s liberty interest. In re Mental Health of O.R.B., 2008 MT 301, ¶ 30, 345 Mont. 516, 191 P.3d 482. M.KS. argues that the value of the written report in this instance lies both in her “ability to defend” and in the court’s ability to be adequately informed regarding Palmatier’s recommendation of a MSH commitment rather than, as in previous proceedings, a community commitment.
¶19 In NA., this Court held that a professional person’s failure to file a report did not amount to plain error where the parties had “effective and sufficient notice of [the professional person’s] findings” and the court had “ample opportunity to hear [the professional person’s] findings and conclusions about N.A.’s mental health.” In re N.A, ¶ 24. Similarly, this Court concluded in O.R.B., ¶ 30, that a professional person’s failure to include a statement of recommendations was harmless error. We determined that “the testimony at the initial hearing, O.R.B.’s emergency detention, and the written report’s conclusions were together sufficient to put O.R.B. ‘on notice’ that the recommendation would be for her commitment.” In re O.R.B., ¶ 31. We distinguished the case of R.M., 270 Mont. at 45-46, 889 P.2d at 1205, where we reversed a civil commitment, because the district court never appointed a professional person and no evaluation was conducted after the initial probable cause determination. In re O.R.B., ¶ 30.
¶20 Based on our review of the record, we conclude that the failure to file a written report with the court did not prejudice M.KS.’s ability to defend against allegations contained in the petition or presented by Palmatier’s testimony. Palmatier was present for and testified at the hearing. M.KS. had notice prior to the hearing that Palmatier was the appointed professional person who would evaluate her and testify at trial; Palmatier had evaluated M.KS. numerous times in the past; Palmatier was familiar with M.KS.’s treatment at WMMHC; and Palmatier gave his assessment of M.KS.’s mental condition, the factual basis for his assessment, and his professional recommendation regarding treatment. M.KS.’s counsel had the opportunity to cross-examine Palmatier, and did so without any objection to the absence of a written report. If M.K.S.’s counsel believed the failure to file a written report inhibited her defense or preparation, counsel could have objected to the lack of a report and the defect could have been remedied.
¶21 Moreover, after acknowledging that the information gained from his evaluation was “almost nonexistent,” Palmatier proceeded to detail the various sources of information used in developing his findings and recommendation. The most recent history, as detailed in the district court record, included not only a threat of suicide by M.K.S., in which law enforcement reported that she had a knife in hand, but also the fact that MSH had been conducting safety checks on M.K.S. every fifteen minutes. Palmatier testified that there were no local hospital alternatives. Indeed, the Neurobehavioral Unit at St. Patrick refused to accept M.K.S. into their facility due to her uncooperative behavior.
¶22 The failure to file a report with the court as statutorily directed does implicate M.KS.’s procedural right to due process. However, M.KS. has failed to meet her burden to demonstrate the second prong of the plain error test — that failing to review the claimed error would result in a manifest miscarriage of justice, leave unsettled questions regarding the fundamental fairness of the proceedings, or compromise the integrity of the judicial process. In re J.S.W., ¶ 15; Gunderson, ¶ 99. The court was adequately informed as to the history and evolution of M.KS.’s illness and the prior recommendations of treatment providers. Counsel for M.KS. had the opportunity — and exercised that opportunity — to examine Palmatier regarding his findings and recommendations.
¶23 We realize that management of mental health proceedings such as these is difficult, especially given statutory deadlines. M.K.S. has had proceedings before Judge Deschamps since 2007, including fora* petitions for commitment and ten petitions to extend commitment. Although the parties and the court are likely very familiar with M.KS., familiarity does not satisfy statutory requirements. We decline to find plain error under the circumstances presented here, but we recognize the possibility that failure to file a written report with the court as statutorily required may constitute prejudicial error.
CONCLUSION
¶24 Although we find that M.KS.’s fundamental right to procedural due process was implicated in these proceedings, we conclude M.KS. has failed to demonstrate that the absence of a written report substantially impacted this right in a manner that would leave unsettled the fundamental fairness of the proceedings, compromise the integrity of the judicial process, or create a manifest miscarriage of justice. We therefore decline to reverse the judgment of commitment based on the plain error doctrine.
¶25 Affirmed.
CHIEF JUSTICE McGRATH, JUSTICES WHEAT, SHEA and RICE concur.
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Appellants Riverstone Residential Group, LLC (Riverstone), HSC Real Estate, Inc. (HSC), Creekside ICG Apartment Portfolio HI, LLC (Creekside), NW Apartment Portfolio II Wildflower, LLC (Wildflower), NW Apartment Portfolio II Shiloh Glen, LLC (Shiloh Glen), and 4000 Mullan Road, LLC (Mullan) appeal a Fourth Judicial District Court, Missoula County, order certifying as a class action claims against them by named Plaintiffs Victor Worledge, Ana Vlahovich, and Lynne Kelly. We restate the issues on appeal as follows:
1. Whether the District Court abused its discretion by admitting new evidence submitted with Plaintiffs’ reply brief.
2. Whether the District Court abused its discretion in determining that the proposed class satisfied M. R. Civ. P. 23(a)’s prerequisites to class certification.
3. Whether the District Court abused its discretion by certifying the class under M. R. Civ. P. 23(b)(3).
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Appellants Creekside, Wildflower, Shiloh Glen, and Mullan (collectively, “Owners”) are owners of multi-unit apartment buildings located in Montana: Creekside, Wildflower, and Mullan own apartment complexes in Missoula, and Shiloh Glen owns an apartment complex in Billings. Appellant Riverstone and its predecessor, HSC (collectively, “Riverstone”), are property management companies that collectively managed Owners’ apartment complexes during times relevant to the complaint. Appellees are current or former tenants of Owners’ apartment complexes who signed leases for those apartments through Riverstone: Worledge resides at Creekside, Kelly resides at Wildfilower, and Vlahovich formerly resided at Creekside.
¶4 On June 11, 2013, Worledge, Vlahovich, and Kelly filed a complaint on behalf of themselves and other unnamed plaintiffs (collectively, “Tenants”) who entered into rental agreements with Riverstone to rent apartments at Owners’ apartment complexes. On October 21, Tenants filed a First Amended Complaint, Statement of Class Action, and Jury Demand. Tenants’ First Amended Complaint alleged that rental agreements at all four apartment complexes were almost identical and contained provisions that violated the Montana Residential Landlord and Tenant Act (Landlord-Tenant Act), §§ 70-24-101 through 442, MCA, and the Montana Security Deposit Act (Security Deposit Act), §§ 70-25-101 through 206, MCA. To support these allegations, Tenants filed as exhibits several of the named parties’ leases with Riverstone. Between November 2013 and February 2014, Riverstone and Owners filed their answers to the complaint.
¶5 On March 13,2014, Tenants moved to certify a class action under M. R. Civ. P. 23. Tenants alleged that the following provisions included in Riverstone leases are prohibited by law: cancellation fees and liquidated damages clauses; provisions requiring the complete forfeiture of security deposits instead of qualified deductions; provisions requiring payment of non-refundable fees; provisions requiring non-refundable pet deposits; provisions exonerating Riverstone and Owners from any risk associated with Tenants’ loss of personal property; provisions requiring Tenants to pay all of Owners’ and Riverstone’s attorney’s fees, regardless of fault; and provisions requiring Tenants to indemnify Riverstone and Owners for any injuries to guests.
¶6 Under the Landlord-Tenant Act,
A rental agreement may not provide that a party: (1) agrees to waive or forego rights or remedies under [the Landlord-Tenant Act]; (2) authorizes any person to confess judgment on a claim arising out of the rental agreement; or (3) agrees to the exculpation or limitation of liability resulting from the other party’s purposeful misconduct or negligence to indemnify the other party for the liability or the costs or attorney’s fees connected therewith.
Section 70-24-202, MCA. Provisions prohibited under § 70-24-202 are unenforceable, and, “If a party purposefully uses a rental agreement containing provisions known by the party to be prohibited, the other party may recover, in addition to ... actual damages, an amount up to 3 months’ periodic rent.” Section 70-24-403, MCA. The Security Deposit Act contains a list of deductions that a landlord may make from a tenant’s security deposit and provides, “A person may not deduct or withhold from the security deposit any amount for purposes other than those set forth [in that list].” Section 75-25-201, MCA.
¶7 Tenants sought class certification under M. R. Civ. P. 23(b)(3). Rule 23(a) sets forth four threshold requirements to class certification: numerosity, commonality, typicality, and adequate representation. M. R. Civ. P. 23(a). Rule 23(b)(3) requires a court to find that “the questions of law or fact common to the class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” M. R. Civ. P. 23(b)(3). Thus, Rule 23(b)(3) adds two requirements — predominance and superiority — to the prerequisites under Rule 23(a).
¶8 In their motion to certify, in addition to the named parties’ Riverstone leases, Tenants filed as exhibits four letters from Riverstone to residents of each apartment complex. The letters, dated May 1 and May 3,2013, purported to change certain provisions of the Riverstone leases to “better comply with Montana Law.” The letters were written on Mullan, Shiloh Glen, Wildflower, and Creekside letterhead and were signed “Mullan Reserve Management,” “Shiloh Glen Management,” “Wildflower Management,” and “Creekside Apartments Management,” respectively. Otherwise, the letters were substantively identical.
¶9 In their responses to Tenants’ motion to certify, Riverstone and Owners argued that Tenants had not submitted sufficient evidence to meet their burden of proof and thus had not met any of the Rule 23 requirements. Riverstone and Owners argued that, among other issues, Tenants did not submit evidence to support their claim that there were over 1,000 class members (numerosity); Tenants did not prove that class members had substantially similar lease agreements (commonality); the named plaintiffs could not represent tenants for apartment complexes where they had never lived (typicality and adequate representation); and the court could not resolve whether Riverstone and Owners violated the Security Deposit Act without performing an individual analysis for each class member (predominance).
¶10 On April 11, 2014, Tenants filed a motion to amend their first amended complaint by removing Vlahovich and adding named Plaintiffs Hall, a former resident at Mullan, and Bartholic, a former resident at Shiloh Glen. Also on April 11, Tenants filed a reply brief regarding their motion to certify, attaching four additional exhibits — Exhibits H, I, J, and K — to rebut Owners’ and Riverstone’s assertions that Tenants did not meet the Rule 23 requirements. Exhibit H was a spreadsheet identifying each potential class member, his or her move-in and move-out dates, the name of the apartment complex in which he or she resided, and which of the seven allegedly prohibited provisions his or her lease contained. Exhibit I was an affidavit by Susan Mayer, president and CEO of Litigation Abstract, Inc., the company that generated the spreadsheet. Exhibit J was an affidavit by attorney Klaus Sitte, testifying to the legislative intent of the committee, of which he was a member, that drafted the Landlord-Tenant Act. Exhibit K consisted of several filings in lawsuits brought by Owners against Tenants in which Owners sought to enforce allegedly prohibited attorney’s fees provisions in the leases.
¶11 Riverstone and Owners opposed Tenants’ motion to amend and moved to strike Tenants’ Exhibits H, I, J, and K, arguing that the exhibits presented new, inadmissible evidence that Tenants could not present for the first time in a reply brief. Riverstone and Owners noted that courts are hesitant to admit such evidence because it deprives the opposing party of an opportunity to respond. On June 11, 2014, the District Court denied the motions to strike, finding the exhibits admissible. The court reasoned that, though parties may not include new arguments in a reply brief, Tenants merely had submitted new evidence in direct rebuttal to Riverstone’s and Owners’ response briefs. Additionally, the court allowed Riverstone and Owners fourteen days to file sur-replies, supplemental briefing, or supporting evidence to address Tenants’ new exhibits, and twenty-one days to request further hearings. On June 25, 2014, Riverstone and Owners all filed surreplies. Neither Riverstone nor Owners requested hearings or additional time.
¶12 On July 30,2014, the District Court issued a memorandum and order granting Tenants’ motion for class certification. The court defined the class as follows:
All persons who had apartment rental agreements with Riverstone Residential Group, or its predecessor, acting as agents for apartment owners Creekside, Wildflower, Shiloh Glen, and 4000Mullan Road apartments between June 11,2011, to present, where the rental agreements contained illegal rental provisions in violation of the Montana Residential Landlord Tenant Act and/or the Montana Security Deposit Act.
On the same day, the court issued an order granting Tenants’ motion to amend their first amended complaint. The court determined that whether Tenants could add new named plaintiffs did not impact class certification because the court had certified the class based on Tenants’ first amended complaint, which satisfied Rule 23 without naming a plaintiff that was a resident of either Mullan or Shiloh Glen. In spite of making this determination, the court noted that adding two new plaintiffs did not prejudice Riverstone or Owners because Tenants did not assert any new legal theory, there was no dispositive motion pending, Tenants did not act in bad faith, and the amendments were submitted before the deadline set by a joint scheduling order.
¶13 Riverstone and Owners appeal the District Court’s class certification.
STANDARDS OF REVIEW
¶14 “Trial courts have the broadest discretion when deciding whether to certify a class,” Sieglock v. Burlington N. & Santa Fe Ry. Co., 2003 MT 355, ¶ 8, 319 Mont. 8, 81 P.3d 495, because they are in the “best position to consider the most fair and efficient procedure for conducting any given litigation,” Chipman v. Nw. Healthcare Corp., 2012 MT 242, ¶ 17, 366 Mont. 450, 288 P.3d 193. Accordingly, we will not upset the District Court’s decision to certify a class unless we determine that the court abused its discretion. Mattson v. Mont. Power Co., 2012 MT 318, ¶ 17, 368 Mont. 1, 291 P.3d 1209. A court abuses its discretion when it acts “arbitrarily without conscientious judgment or exceed[s] the bounds of reason.” Mattson, ¶ 17. “To the extent that the ruling on a Rule 23 requirement is supported by a finding of fact, that finding ... is reviewed under the ‘clearly erroneous’ standard.” Mattson, ¶ 17 (quoting Miles v. Merrill Lynch & Co., 471 F.3d 24, 40-41 (2d Cir. 2006) (internal quotation marks omitted)). Rulings on issues of law are reviewed de novo. Mattson, ¶ 17 (citing Miles, 471 F.3d at 40-41).
DISCUSSION
¶15 1. Whether the District Court abused its discretion in admitting new evidence submitted with Plaintiffs’ reply brief.
¶16 Riverstone and Owners argue that the District Court abused its discretion by considering material first submitted with Tenants’ reply brief. We have held many times that we "will not address the merits of an issue presented for the first time in a reply brief.” State v. Makarchuk, 2009 MT 82, ¶ 19,349 Mont. 507, 204 P.3d 1213 (quoting Pengra v. State, 2000 MT 291, ¶ 13, 302 Mont. 276, 14 P.3d 499) (emphasis added and internal quotation marks omitted). However, we have not addressed a case where, as here, a plaintiff presents new evidence in response to a defendant’s challenge that the plaintiff has not met her evidentiaiy burden.
¶17 Courts that strike new evidence offered for the first time in a plaintiffs reply brief are typically driven by fairness to the parties, reasoning that admitting such evidence "deprives a defendant of an opportunity to meaningfiilly respond.” Bennett v. Sprint Nextel Corp., No. 09-2122-EFM, 2013 U.S. Dist. LEXIS 41161, at *6-7 (D. Kan. Mar. 25, 2013); see also Tovar v. U.S. Postal Serv., 3 F.3d 1271, 1273 n.3 (9th Cir. 1993) (striking new evidence presented in a reply brief after the defendant argued that "the new information was outside the record and that including it in a reply brief deprived the [defendant] of an opportunity to respond”); In re Taco Bell Wage & Hour Actions, No. l:07-cv-01314-OWW-DLB, 2011 U.S. Dist. LEXIS 109169, at *19 (E.D. Cal. Sept. 26, 2011) (“New evidence or analysis presented for the first time in a reply will not be considered.”) (citations omitted). Courts also have stricken new evidence offered in a reply brief when it was available to the plaintiff before she submitted a motion to certify. See Armstrong v. Genesh, Inc., No. 11-1161-CM, 2011 U.S. Dist. LEXIS 142722, at *2 (D. Kan. Dec. 12,2011) (noting, “The court could consider the newly-submitted evidence and give defendant an opportunity to respond, but the court believes this measure is unnecessary”); Lang v. Kan. City Power & Light Co., 199 F.R.D. 640, 651 (W.D. Mo. 2001) (granting a defendant’s motion to strike expert testimony offered in a reply brief when the plaintiffs, in interrogatories and in discussions with the court, had indicated that they would not use expert testimony).
¶18 Neither of these concerns applies to the evidence at issue here: Tenants did not have access to the spreadsheet and testimony providing its foundation before submitting their motion to certify, and the District Court gave Riverstone and Owners an opportunity to file sur-replies and to request a hearing. Riverstone and Owners argue that the District Court abused its discretion by admitting the new evidence without allowing them an opportunity to conduct discovery regarding that evidence or to obtain an expert of their own, and that fourteen days was insufficient time to file a sur-reply. However, Riverstone and Owners filed sur-replies without ever requesting additional time or hearings, and agreed that they had had a sufficient opportunity to respond.
¶19 In its order denyingthe Defendants’ motions to strike, the District Court pointed out that, if it granted the motions, it could deny Tenants’ motion to certify without prejudice because the motions to strike were based on lack of evidence, rather than a failed legal argument. Accordingly, the court concluded, “The only result of Defendants’ tactical maneuver here would be to delay these proceedings by several months, multiply fees on both sides, and make this Court revisit the exact issues that are currently before it with the same or similar evidence.” The court determined that, because it gave Riverstone and Owners an opportunity to respond and to request additional hearings, Riverstone and Owners would not be prejudiced by the new evidence.
¶20 The District Court preempted concerns about accepting the new evidence by allowing Riverstone and Owners the opportunity to file sur-replies and to request further hearings. Although Riverstone and Owners argue that they were unable to rebut Mayer’s statement that Tenants’ damages are easy to ascertain, Riverstone and Owners have not demonstrated what they would have gained from additional discovery on the contents of the spreadsheets that may have affected the class certification ruling. Tenants do not seek actual damages, but seek only the statutory damages available under § 70-24-403, MCA. Tenants claim that Riverstone’s inclusion, rather than enforcement, of allegedly prohibited provisions in Riverstone leases violated the Landlord-Tenant Act and the Security Deposit Act. Further, Riverstone’s form letter to residents of all four apartment complexes purporting to eliminate the allegedly prohibited lease provisions implicitly acknowledges that those provisions are easily identified and uniform across all Riverstone leases. The court did not act arbitrarily, without conscientious judgment, or exceed the bounds of reason by admitting Tenants’ evidence in these circumstances. The District Court did not abuse its discretion in denying Riverstone’s and Owners’ motions to strike.
¶21 2. Whether the District Court abused its discretion in determining that the proposed class satisfied M. R. Civ. P. 23(a)’s prerequisites to class certification.
¶22 Class actions are “an exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Mattson, ¶ 18 (quoting Califano v. Yamasaki, 442 U.S. 682, 700-01, 99 S. Ct. 2545, 2557 (1979)). “Departure from the usual rule is justified if the class representative is part of the class and has the same interest and injury as the class members.” Sangwin v. State, 2013 MT 373, ¶ 12, 373 Mont. 131, 315 P.3d 279 (citation omitted). Discussed above, Rule 23 of the Montana Rules of Civil Procedure governs class certification in Montana.
¶23 Under Rule 23(a) the party seeking certification must establish that the class meets the requirements of numerosity, commonality» typicality, and adequate representation. Chipman, ¶ 43. A district court may certify a class only if it is satisfied, after conducting a “rigorous analysis,” that each of these requirements is met. Chipman, ¶ 44 (citations omitted). Conducting a “rigorous analysis” may entail analyzing some merits issues, but only to the extent that those issues are relevant to determining whether the Rule 23 requirements are satisfied. Chipman, ¶ 44.
¶24 Riverstone and Owners dispute the District Court’s determination that the proposed class satisfied Rule 23(a)’s commonality» typicality, and adequate representation standards; they do not dispute numerosity.
A. Commonality
¶25 To meet the commonality requirement, Tenants must show that “there are questions of law or fact common to the class.” M. R. Civ. P. 23(a)(2). Historically, Montana followed federal jurisprudence imposing a “relatively low,” easily satisfied burden on plaintiffs to prove commonality. Chipman, ¶ 47. That standard required plaintiffs to demonstrate a “common nucleus of operative facts” — that “a single issue was common to all class members, regardless of differences among the class.” Chipman, ¶ 47 (internal quotations and citations omitted). However, in Wal-Mart Stores, Inc. v. Dukes, 564 U.S._, 131 S. Ct. 2541 (2011), the U.S. Supreme Court “significantly tightened” the federal commonality requirement. Sangwin, ¶ 18 (quoting Chipman, ¶ 47). Under Wal-Mart, claims by class members and their representatives “must depend upon a common contention of such a nature that it is capable of classwide resolution — which means that determination of its truth or falsity will resolve an issue that is central to the validity of each one of the claims in one stroke.” WalMart, 564 U.S. at_, 131S. Ct. at 2545.
¶26 The District Court determined that the class in this case satisfied Rule 23(a)(2)’s commonality requirement even under Wal-Marts more stringent standard because the validity of the prospective class members’ claims hinged on a single issue: whether Tenants all had leases through Riverstone that contained at least one prohibited provision entitling them to statutory damages under Montana law. In reaching its decision, the court conducted a rigorous analysis of the facts and relied on our recent precedent construing the commonality requirement.
¶27 In Chipman, we considered a district court’s certification of a class of employees who sued their employers, a parent healthcare company and its subsidiaries, over benefit buy-back programs. Chipman, ¶¶ 5-6. Although the employers contended that each employee had different circumstances requiring a fact-specific, individual analysis, the district court found that the employers implemented a uniform buy-back policy with respect to all employees. Chipman, ¶¶ 51-52. We affirmed, recognizing that although dissimilarities within the proposed class existed, “common facts connect all class members in relation to the ultimate resolution” of the dispute. Chipman, ¶ 52 (“A court’s determination of whether a standardized group contract exists and the legal obligations of the parties will generate common answers applicable to all class members.”).
¶28 Like the plaintiffs in Chipman, Tenants allege that Riverstone and Owners participated in a “uniform course of conduct” that was prohibited by Montana law. Although Riverstone and Owners contend that not every prospective class member’s lease had the same allegedly prohibited provisions, the District Court pointed out:
Defendants considered the leases so similar that a uniform letter was sent to all ‘residents’ at each of the four buildings ... purportedly striking certain provisions from the leases, stating that provisions would not be enforced, or unilaterally changing the language of the contracts. The letters acknowledged that there were differences in the leases, but implied that the single generic letter was sufficient to address any of the problems in lease language.
¶29 Riverstone and Owners do not dispute that all of the leases for the putative class members contained at least one of the seven challenged provisions. Because Tenants’ allegations concern the general business practice of Riverstone and Owners to use leases with allegedly prohibited provisions, the court determined that slight differences in the leases did not preclude commonality. Following our reasoning in Chipman, we agree that, although “[dissimilarities within the proposed class exist, ... common facts connect all class members in relation to the ultimate resolution of this dispute.” Chipman, ¶ 52. Determining in a class-wide proceeding whether the standard form leases used by Riverstone violate the Landlord-Tenant Act will “generate common answers apt to drive the resolution of the litigation.” Chipman, ¶ 48 (quoting Wal-Mart, 564 U.S. at_, 131 S. Ct. at 2551) (emphasis removed). Further, Tenants are not requesting actual damages, but only those set pursuant to the statutory formula, which the District Court noted easily could be calculated based on each class member’s monthly rent. That Tenants did not all pay the same amount of rent is not an obstacle to this determination. Such individualized damage inquiries generally do not preclude class certification. See Mattson, ¶ 38 (citations omitted).
¶30 The District Court also rejected Riverstone’s and Owners’ argument that Tenants’ Security Deposit Act claims rendered the class inappropriate. The court reasoned that, although enforcement of the security deposits provisions determines whether a landlord has violated the Act, Tenants’ filings in this case concerned only the inclusion of allegedly unlawful provisions in the leases, not specific wrongful deductions from security deposits. Riverstone argues that Tenants impermissibly attempted to bootstrap their Security Deposit Act claims into the rental agreement prohibitions of the Landlord-Tenant Act. Riverstone faults the District Court for failing to analyze whether the mere inclusion of provisions in a lease that could authorize deductions in violation of the Security Deposit Act is a violation of the Landlord-Tenant Act. The Tenants’ First Amended Complaint seeks a declaratory ruling that leases with the allegedly prohibited provisions are unenforceable. Whether a lease may violate the Security Deposit Act without an attempt to enforce an allegedly prohibited provision is an issue of law at the heart of the Tenants’ complaint. Likewise, the issue whether the inclusion of certain security deposit provisions in violation of the Security Deposit Act violates the Landlord-Tenant Act is an issue of law that can be decided by a court at one time for all class members. Accordingly, the District Court correctly concluded that it was inappropriate to rule on those issues at the certification stage.
¶31 Additionally, the fact that not all class members have Security Deposit Act claims does not preclude class certification. As with provisions that allegedly violate the Landlord-Tenant Act, certain leases contained certain of the allegedly prohibited provisions while others did not, but the slight differences between leases do not preclude commonality on the issue whether the provisions violate Montana law.
¶32 Finally, Owners contend that the District Court’s use of an “and/or” clause in its definition — “All persons who had apartment rental agreements... containing] illegal rental provisions in violation of the [Landlord-Tenant Act] and/or the [Security Deposit Act]” — renders the class “so amorphous and diverse, it cannot be reasonably clear that the proposed class members have all suffered a constitutional or statutory violation.” (quoting Adashunas v. Negley, 626 F.2d 600, 604 (7th Cir. 1980)). Owners assert that this ambiguity necessitates an impermissible determination on the merits. We disagree. The District Court’s class definition clearly encompasses persons who had a lease through Riverstone that contained at least one provision in violation of Montana statutory law. The court’s use of “and/or” under these circumstances does not invalidate its certification of a class because, although some leases allegedly violate the Landlord-Tenant Act, some allegedly violate the Security Deposit Act, and some allegedly violate both Acts, an individual lease need contain only one of the challenged provisions in order to fall under the class definition. Although there may be dissimilarities as to which of the seven allegedly prohibited provisions each lease contains, Riverstone’s use of a form letter to all tenants acknowledges that the provisions easily are identified in Riverstone’s standard form leases. As in Chipman, the common issue — whether Riverstone leases contained provisions in violation of Montana law — connects all members in relation to the ultimate resolution of the dispute.
¶33 The proposed class satisfies Rule 23(a)(2)’s commonality requirement under the more stringent Wal-Mart standard. All class members are connected by the existence of allegedly prohibited provisions in their leases with Owners through Riverstone. The District Court, after conducting a thorough analysis of the facts and circumstances of this case, did not abuse its discretion in determining that Tenants’ proposed class met Rule 23(a)(2)’s commonality requirement.
B. Typicality
¶34 Mullan argues that the District Court erred in certifying a class against it when there was no relationship between Mullan and any of the named plaintiffs. Under M. R. Civ. P. 23(a)(3), “the claims or defenses of the representative parties [must be] typical of the claims or defenses of the class.” Typicality, which “tends to merge” with commonality, Sangwin ¶ 21 (citation omitted), is “designed to ensure that the named representatives’ interests are aligned with the class’s interests, the rationale being that a named plaintiff who vigorously pursues his or her own interests will necessarily advance the interests of the class ” Diaz v. Blue Cross & Blue Shield, 2011 MT 322, ¶ 35, 363 Mont. 151, 267 P.3d 756 (citations and quotation marks omitted). Typicality is not a demanding standard: it is met if a named plaintiffs claim “stems from the same event, practice, or course of conduct that forms the basis of the class claims and is based upon the same legal or remedial theory.” Sangwin, ¶ 21 (quoting Diaz, ¶ 35) (emphasis removed and internal quotation marks omitted). “The event, practice, or course of conduct need not be identical.” Sangwin, ¶ 21 (citing Die», ¶ 35).
¶35 Generally, typicality “prevents plaintiffs from bringing a class action against defendants with whom they have not had any dealings.” Sangwin, ¶ 21 (citation omitted). However, an exception to this general rule occurs in “instances in which all defendants are juridically related in a maimer that suggests a single resolution of the dispute will be expeditious.” Murer v. Mont. State Comp. Mat. Ins. Fund, 257 Mont. 434, 438-39, 849 P.2d 1036, 1039 (1993) (citing La Mar v. H & B Novelty and Loan Co., 489 F.2d 461, 465 (9th Cir. 1973)). In Chipman, we noted that courts have applied this “juridical link doctrine” to “circumstances in which ‘all the defendants took part in a similar scheme that was sustained either by a contract or conspiracy, or was mandated by a uniform state rule,’ such that it was ‘appropriate to join as defendants even parties with whom the named class representative did not have direct contact.’ ” Chipman, ¶ 40 (quoting Payton v. Cnty. of Kane, 308 F.3d 673, 679 (7th Cir. 2002) (emphasis in original)) (citing Moore v. Comfed Sav. Bank, 908 F.2d 834, 838-39 (11th Cir. 1990); Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410, 423-24 (6th Cir. 1998)). We further noted that “many courts have applied the juridical link doctrine to allow a plaintiff to join additional defendants with identical obligations under a contract.” Chipman, ¶ 40 (citing Weld v. Glaxo Wellcome, Inc., 434 Mass. 81, 746 N.E.2d 522, 530 (Mass. 2001); In re Activision Sec. Litigation, 621 F. Supp. 415, 432 (N.D. Cal. 1985)).
¶36 Considering sample leases from each apartment complex, the District Court determined that leases for apartments at Shiloh Glen and Mullan were substantially similar to leases for apartments at Wildflower and Creekside, so that class members who resided in those complexes would have the same claims as the named plaintiffs. The contractual relationship between Owners and Riverstone, and their use of common leases, thus constituted the juridical link between Owners and the named plaintiffs, whether or not the named plaintiffs resided in a particular owner’s complex. Mullan contends that Tenants have not met the typicality requirement because prospective class members that resided in Mullan would have different claims or defenses requiring an individual factual analysis for each complex, especially given that Mullan was not in operation until 2012. Despite this contention, Riverstone and Owners have not shown why the common class question — whether certain lease provisions violated Montana law — would not be answerable on a class-wide basis. The named parties share this common question with current and former residents of Shiloh Glen and Mullan, even if the named parties never resided in those complexes. Mullan further contends that “each owner had a separate relationship with Riverstone” warranting an individual factual analysis. However, the District Court determined that Owners all used similar leases through Riverstone, and that Riverstone served as a property manager for all four apartment complexes; none of the Appellants have rebutted these determinations.
¶37 Moreover, in its July 30,2014 order granting Tenants’ motion to amend their first amended complaint, the District Court allowed Tenants to add former residents of Mullan and Shiloh Glen as named plaintiffs. The court concluded that Riverstone and Owners would suffer no prejudice because the addition was not necessary to its ruling on class certification. We have observed that “class action certification orders ‘are not frozen once made,’ ” and that a district court has broad discretion to alter or amend such orders “based on the circumstances developing as the case unfolds.” Diaz v. State, 2013 MT 219, ¶ 28, 371 Mont. 214, 308 P.3d 38 (quoting Amgen Inc. v. Conn. Ret. Plans & Trust Funds,_U.S._,_, 133 S. Ct. 1184, 1202 n.9 (2013)). The addition of new class representatives ameliorated Mullan’s concerns. Tenants’ failure to include residents from all four complexes in their initial or first amended complaints does not defeat the propriety of class certification.
¶38 The District Court concluded that Owners’ use of the Riverstone leases constituted an event, practice, or course of conduct that the class representatives share with the class. The District Court did not act unreasonably in making this determination; its findings of fact were not clearly erroneous, and its conclusions of law were correct. The District Court did not abuse its discretion in determining that Tenants satisfied Rule 23(a)(3)’s typicality requirement.
C. Adequate representation
¶39 “Adequate representation requires that the named representatives’ attorney is qualified, competent, and able to conduct the litigation, and that the named representatives’ interests are not antagonistic to the class interests.” Sangwin, ¶ 27 (citing Chipman, ¶ 57). The parties do not dispute that Tenants’ attorneys are qualified to bring this action. Rather, Riverstone contends that the named parties do not adequately represent the interests of the class, claiming that the named parties do not have Security Deposit Act claims because Riverstone has not yet deducted any amount from their security deposits. As discussed earlier, Tenants seek a ruling that certain provisions of the Riverstone leases violated the Security Deposit Act and are thus unenforceable. Because that remedy does not depend on a determination that a deduction from a security deposit has been made, Tenants’ interests in resolving this issue are not antagonistic to the class interests. Tenants also claim entitlement to statutory damages due to the Defendants’ “knowing inclusion” of prohibited lease provisions. Whether they are entitled to that remedy for their Security Deposit Act claims is an issue of law appropriate for resolution on a class-wide basis, even if the class representatives do not share identical provisions in their leases with all members of the class. The District Court did not abuse its discretion in determining that Tenants adequately can represent the class.
¶40 3. Whether the District Court abused its discretion by certifying the class under M. R. Civ. P. 23(b)(3).
¶41 “Once the Rule 23(a) prerequisites are satisfied, the analysis shifts to Rule 23(b), which sets forth additional requirements depending on the type of class action sought.” Mattson, ¶ 17. Tenants sought class certification under M. R. Civ. P. 23(b)(3). Accordingly, Tenants were required to show that the class met Rule 23(b)(3)’s predominance and superiority requirements — that “the questions of law or fact common to the class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” M. R. Civ. P. 23(b)(3). Rule 23(b)(3) further states,
The matters pertinent to the[se] findings include: (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.
M. R. Civ. P. 23(b)(3).
¶42 We have recognized that “class determination is appropriate when the class members’ claims ‘depend on a common contention that is capable of classwide resolution.’ ” Sangwin, ¶ 37 (quoting Chipman, ¶ 48). In Sangwin, we held that the question the district court certified — whether the State breached health insurance contracts with plaintiffs by denying insurance claims — did not meet Rule 23(bX3)’s predominance requirement. In reaching that decision, we noted that the plaintiffs conceded that determining whether an individual’s claims were properly denied necessitated an individual assessment of each claim and its underlying documentation before the plaintiffs could establish liability. Sangwin, ¶ 36. Because common issues did not predominate over the individual circumstances giving rise to denial of individual insurance claims, the question certified was “incapable of being resolved on a classwide basis.” Sangwin, ¶ 37.
¶43 In this case, the District Court concluded that Tenants met the Rule 23(b)(3) predominance and superiority requirements. The court noted that the circumstances in Sangwin were different from the circumstances in this case because, here, the question is whether the lease agreements contained prohibited provisions, not whether the allegedly prohibited provisions were wrongfully enforced. The District Court thoroughly considered each pertinent issue listed in Rule 23(b)(3), finding that: (1) because each individual plaintiffs claim was small, it was “reasonable to expect that the individual plaintiffs would want to pool their resources in pursuing a claim;” (2) there was no pending or prior litigation on this issue by or against class members; (3) it was desirable to concentrate the litigation of the claims in one forum “to conserve judicial resources and avoid disparate results and potentially over 800 different lawsuits based on the same or similar leases and same legal theories;” and (4) it likely would not be difficult to manage the class action.
¶44 Riverstone and Owners assert that the District Court abused its discretion by certifying a class that does not meet the requirements of predominance or superiority. According to Riverstone, individual questions regarding damages and individual questions regarding separate defenses available to each defendant predominate over any common questions. Riverstone bases much of its argument that Tenants cannot meet the predominance requirement on its contention that Tenants’ Security Deposit Act claims require individual analysis. We already have concluded that the Security Deposit Act claims do not require individual factual analysis. We apply the same reasoning!» the predominance requirement. Tenants allege that the inclusion of certain provisions in the Riverstone leases itself violated the Security Deposit Act; they do not allege that Riverstone has enforced those provisions in violation of the Security Deposit Act. Therefore, Tenants’ inclusion of prospective class members with Security Deposit Act claims does not preclude Tenants from meeting the predominance requirement.
¶45 Riverstone also contends that Tenants cannot meet the predominance requirement for Tenants’ Landlord-Tenant Act claims because the Landlord-Tenant Act gives courts discretion to award damages on a case-by-case basis. See § 70-24-403(2), MCA (“If a party purposefully uses a rental agreement containing provisions known by the party to be prohibited, the other party may recover, in addition to ... actual damages, an amount up to 3 months’ periodic rent.” (emphasis added)). Individual damages calculations typically do not defeat a finding that common issues predominate. 2 William B. Rubenstein, Alba Conte & Herbert Newberg, Newberg on Class Actions § 4:54, 206-09 (5th ed. 2011); see also Sangwin, ¶ 37; McDonald v. Washington, 261 Mont. 392, 403-04, 862 P.2d 1150, 1157 (1993) (holdingthat, although damages calculations required each member of a class individually to prove a quantity of gasoline purchased at supracompetitive prices and the prices paid, this did not preclude class determination because the common issues that determined liability predominated).
¶46 In Mattson, we determined that a class met the predominance requirement even when class members’ individual damages calculations varied significantly due to the widely varying characteristics of the class members’ damaged shoreline properties. Mattson, ¶¶ 40-41. We noted, “The only individual questions in this lawsuit relate to the amount of damages,” which “does not negate class certification as to liability.” Mattson, ¶ 41 (emphasis in original). As previously stated, Tenants allege that each class member’s claim requires one common question to be answered: whether Montana law prohibited certain provisions in the Riverstone leases. This is a common question of law that can be decided by a district court at one time, avoiding hundreds of individual trials. Tenants demonstrated the ease of determining whether any individual class member’s lease contains a prohibited provision through their spreadsheet consolidating the approximately 800 leases and identifying which of the allegedly prohibited provisions each lease contained. Tenants’ claims for damages pursuant to a statutory formula — up to three months’ rent — present a stronger case for predominance than did the Mattson class members’ claims because the circumstances in Mattson required an in-depth individual analysis of the wide-ranging characteristics and value of each damaged shoreline property.
¶47 Mullan asserts that Tenants have not met predominance because, in order to be hable under the Landlord-Tenant Act, a party must “purposefully” use a rental agreement with prohibited provisions. Section 70-24-403(2), MCA. Mullan contends that the District Court did not consider the fact that each of the Owners may have an individual defense. Specifically, Mullan asserts that its liability hinges on individual factual analyses to determine whether a purported class member was an actual tenant of Mullan and whether his or her tenancy coincided with a period in which the lease agreement contained prohibited provisions. According to Mullan, these individual issues “clearly predominate” over the common question whether the Riverstone leases contained prohibited provisions. We disagree. As discussed above, Tenants’ spreadsheet demonstrates a simple method of ascertaining the answers to both of these questions. Extensive individual inquiries analyzing time periods during which Tenants resided in a particular apartment complex and whether a particular lease contained a particular provision will not be necessary. Accordingly, the District Court’s findings of fact were not clearly erroneous, its legal conclusions were correct, and it did not abuse its discretion in determining that a common question predominates over the individual questions in this case.
¶48 Riverstone and Owners contend that class adjudication is inferior to other available methods for fairly and efficiently adjudicating the controversy. The District Court rejected these arguments, concluding that the simplest way to determine whether provisions in the Riverstone leases violated Montana law would be to consider the seven provisions in one single trial, rather than holding over 800 individual trials. The District Court did not abuse its discretion in making this determination. Individual tenants likely could not afford to bring separate claims for what is an alleged illegality in a standard lease form widely used by Riverstone. By contrast, as the District Court noted, a class action would save the resources of the courts and parties by permitting a common question of whether Riverstone leases contained prohibited provisions to be litigated in an. economical fashion.
CONCLUSION
¶49 We affirm the District Court’s decision and order.
JUSTICES SHEA, COTTER, WHEAT and RICE concur.
Vlahovich was dismissed, and Plaintiffs Matthew Hall and Michael Bartholic were added, in the Second Amended Complaint.
However, the District Court explained in its certification order that it would not consider the Sitte affidavit because “Sitte is an attorney and his affidavit essentially provides his interpretation of the Landlord Tenant Act and legislative intent.” This ruling is not challenged on appeal.
Moreover, a review of Tenants’ spreadsheet indicates that the majority of Biverstone leases contained several of the allegedly prohibited lease provisions.
|
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JUSTICE McKINNON
delivered the Opinion of the Court.
¶1 Following a youth court disposition, A.D.T. was transferred to district court pursuant to § 41-5-208, MCA, for supervision by the Department of Corrections (DOC) when he reached his 18th birthday. A.D.T. challenges the denial of his motion to dismiss a petition revoking his probation and asserts that the conditions of probation he is alleged to have violated were improperly imposed. We affirm the District Court because it ultimately reached the correct result, even though it was for the wrong reason. State v. Betterman, 2015 MT 39, ¶ 11, 378 Mont. 182, 342 P.3d 971.
¶2 We restate the issues as follows:
1. Did the District Court violate the provisions of § 41-5-208(4), MCA, by imposing new conditions of probation prior to finding thatA.D.T. violated the terms of his youth court disposition?
2. Did the District Court correctly determine that there were conditions of the underlying youth court disposition which were violated?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 On February 16, 2012, A.D.T. was adjudicated as a delinquent youth and juvenile offender based upon his admission to one count of sexual assault and one count of sexual intercourse without consent. It was undisputed that A.D.T. needed an inpatient sex offender treatment program and that the most suitable facility was the Pine Hills Juvenile Correctional Facility (Pine Hills). However, because A.D.T. was ten months shy of his 18th birthday, Youth Court Services was concerned that A.D.T. would not be able to complete the sex offender program at Pine Hills, recommended by psychologist Dr. Robert Page, because the program normally required between 17 and 24 months to complete. As a result, the youth court ordered that a status hearing be set for December 13, 2012, “for additional information and insight regarding an appropriate disposition for the Youth that will carry past the Youth’s eighteenth birthday.” The youth court ordered A.D.T. committed to the Department of Corrections for placement at Pine Hills “in the sex offender treatment program until eighteen (18) or sooner released.” The youth court designated A.D.T. a Level H sex offender, but exempted him, at that time, from the duty to register as a sex offender under § 41-5-1513(l)(d), MCA.
¶4 On December 12, 2012, the State filed a Motion to Transfer Jurisdiction to the District Court pursuant to § 41-5-208, MCA. The petition noted that A.D.T. had successfully completed the sex offender program at Pine Hills, but that A.D.T.’s counselors had recommended outpatient treatment to transition A.D.T. into the community. At the hearing held December 13,2012, A.D.T. and his counsel were present and agreed to a transfer of jurisdiction to the district court. Thereupon, the court signed an order transferring jurisdiction to “ensure compliance with outpatient treatment and given the fact that the Youth will turn 18 years of age....”
¶5 On January 15, 2013, Adult Probation and Parole Officer Amy Rehbein made a request with the deputy county attorney to amend supervision of A.D.T. by adding 41 conditions of probation relating to adult probationers convicted of sexual offenses. Officer Rehbein presented a copy of the request to amend to A.D.T. for his signature which identified each additional condition. A.D.T., apparently without consulting his attorney, signed the request. The amendment was requested pursuant to § 46-23-1011(4)(d), MCA, which provides that the “court may grant the petition [to amend conditions] if the probationer does not object.” On February 13,2013, the district court signed an order adding the 41 conditions to A.D.T.’s probation and supervision.
¶6 On March 28,2013, Officer Rehbein filed a report of violation of A.D.T. with the district court, alleging that A.D.T. violated four of the 41 conditions added to A.D.T.’s probation. Specifically, the report alleged that A.D.T. violated probationary conditions regarding laws and conduct, illegal drug use, and no alcohol. It was alleged A.D.T. attended a party with numerous other juveniles who were smoking marijuana and drinking alcohol, had a blood alcohol concentration (BAC) of .088, and had lied to his probation officer about the events surrounding his use of alcohol and marijuana. The report also alleged that A.D.T. was terminated from his outpatient sex offender treatment because A.D.T. admitted to his counselor that he was drinking alcohol and smoking marijuana, driving while under the influence of alcohol, associating with minors who were also drinking, and had viewed pornography on at least one occasion at his grandmother’s house. A.D.T. was additionally noted as having poor performance in group treatment. On April 3, 2013, the State filed a petition to revoke A.D.T.’s probation based on the violations set forth in the report.
¶7 On April 16, 2013, A.D.T. filed a motion to dismiss the State’s revocation petition arguing that imposition of the 41 conditions violated the provisions of § 41-5-208(4), MCA, and exceeded the scope of the youth court’s disposition and transfer order of December 13, 2013. A.D.T. argues that DOC supervision is limited to ensuring compliance with the dispositional order and successfid completion of outpatient treatment. The State observed that A.D.T. had not objected to the addition of the 41 conditions and that one of the violations — termination from outpatient sex offender treatment — was a violation of A.D.T.’s original youth court disposition. Following a hearing on May 30,2013, the court denied A.D.T.’s motion to dismiss and determined that A.D.T. had agreed to the addition of the 41 conditions and that he had become a probationer with Adult Probation and Parole upon his transfer to district court. The court set an adjudicatory hearing on the State’s revocation petition.
¶8 Dr. Page testified at the revocation hearing held September 19, 2013 and confirmed that A.D.T. had been discharged from outpatient treatment. A.D.T. also admitted to Dr. Page that he had not completed outpatient treatment and that he had been smoking marijuana and drinking alcohol. The court found A.D.T. had violated terms of his probation and placed A.D.T. on “formal probation” with Adult Probation and Parole.
¶9 A.D.T. appeals the denial of his motion to dismiss.
STANDARD OF REVIEW
¶10 The district court’s denial of a motion to dismiss presents a question of law, which this Court reviews de novo. Betterman, ¶ 11. We review a district court’s interpretation and application of the law de novo to determine if the conclusions are correct. Betterman, ¶ 11. The district court’s findings of fact are reviewed under the clearly erroneous standard. Additionally, this Court will affirm the district court’s ruling when it reaches the right result, even if it reaches the right result for the wrong reason. Betterman, ¶ 11.
DISCUSSION
¶11 1. Did the District Court violate the provisions of § 41-5-208(4), MCA, by imposing new conditions of probation prior to finding that A.D.T. violated the terms of his youth court disposition?
¶12 Section 41-5-208, MCA, is Montana’s nonextended jurisdiction statute and provides for the transfer of supervisory responsibility to the district court after a youth court disposition made pursuant to the provisions of §§ 41-5-1512 or 41-5-1513, MCA. In any case that was not prosecuted under § 41-5-206, MCA, (setting forth circumstances when an Information may be filed directly in district court) or as an extended jurisdiction juvenile prosecution (pursuant to the provisions of §§ 41-5-1201 through 41-5-1210, MCA), § 41-5-208, MCA, allows the court to transfer jurisdiction to the district court and order supervisory responsibility from juvenile probation services to adult probation services. The purpose of the transfer is to ensure continued compliance with the youth court’s disposition.
¶13 Section 41-5-208(4), MCA, provides the specific procedure to be followed when a youth has a case transferred from youth court to district court and has been found to have violated the terms of the youth court’s disposition. “If a youth whose case has been transferred to district court under this section violates a disposition previously imposed under 41-5-1512 or 41-5-1513, the district court may, after hearing, impose conditions as provided under46-18-201 through 46-18-203.” Section 41-5-208(4), MCA. (Emphasis supplied.) Sections 46-18-201 through 46-18-203, MCA, concern the sentences and conditions that may be imposed for adult offenders convicted of crimes. It is well established that, following a youth court disposition, a youth is not considered a “defendant” nor has the youth been “convicted” of a crime. In re Appeal of Cascade Cnty. Dist. Court, 2009 MT 355, ¶ 14, 353 Mont. 194, 219 P.3d 1255. Therefore, absent application of the procedure set forth in § 41-5-208(4), MCA, or some other provision of the law, the probationary conditions and sentences referred to in §§ 46-18-201 through 46-18-203, MCA, may not serve as a basis for imposing specific conditions of a youth’s probation which alter the terms of the disposition.
¶14 The plain meaning of the terms of § 41-5-208(4), MCA, require, first, that the youth have been found to have violated the youth court disposition, and, second, that the conditions for adult probation were imposed following a hearing. We have not previously considered this section. Likewise, we understand the District Court’s inclination that “when you transfer to adult probation and parole you follow the standard conditions of adult probation and parole,” particularly since subsection (1) speaks generally of a transfer of supervisory authority to “adult probation services.” Nevertheless, the plain language of subsection (4) sets forth the prerequisites for imposition of conditions relating to adult supervision which were not previously contained in a youth’s disposition.
¶15 The District Court determined that all of the violations occurred after A.D.T. had been placed on adult probation. However, this conflates the specific provisions of §§ 41-5-208(1) and (4), MCA. A transfer under § 41-5-208(1), MCA, as was done here, may be made to “ensure continued compliance with the court’s disposition under 41-5-1512 or 41-5-1513.” The parties and court do not dispute that the 41 conditions are “new.” Therefore, they may not be imposed unless they are consistent with the underlying youth court disposition. Arguably, some of these “new” conditions would have been necessary for continued compliance with the youth court’s disposition. However, no hearing was held prior to transfer to establish those conditions necessary to comply with the youth court disposition. Since AJXT.’s 41 conditions were, in essence, conditions of Adult Probation and Parole embodied by §§ 46-18-201 through 46-18-203, MCA, they may not be imposed absent a hearing and absent a finding that A.D.T. had violated his disposition. We therefore conclude that the District Court erred in denying A.D.T.’s motion to dismiss the petition regarding those conditions which were not originally set forth in the youth court’s disposition or transfer order.
¶16 2. Did the District Court correctly determine that there were conditions of the underlying youth court disposition which were violated?
¶17 A.D.T. had been declared delinquent as a result of a serious sexual assault and sexual intercourse without consent. Initially, Youth Court Services had recommended that the county attorney proceed pursuant to § 41-5-206, MCA, and file directly in district court by Information. However, upon further reflection, A.D.T. was given the opportunity to complete a sex offender program in a youth facility rather than face criminal charges as an adult and a conviction on his record. It is undeniable that all concerned, especially the court, appreciated the need for successful completion of an inpatient sex offender treatment program. Moreover, as A.D.T.’s therapist testified, outpatient treatment is a standard requirement once a youth is released from the Pine Hills sex offender program. The dispositional order provided specifically for enrollment in the sex offender program at Pine Hills. The order granting transfer to the district court, agreed to by A.D.T., also specifically referenced the need for outpatient treatment in the community as a follow up to A.D.T.’s treatment in an inpatient setting. Thus, successful completion of outpatient sex offender treatment was a requirement to ensure compliance with A.D.T.’s youth court disposition.
¶18 The evidence presented at the revocation hearing held on September 19,2013, substantiated a finding, by a preponderance of the evidence, that A.D.T. had violated the terms of his youth court disposition when he was terminated from outpatient sex offender treatment. Having found A.D.T. in violation of his disposition, the Court could impose the 17 conditions it imposed following the revocation hearing, which are consistent with conditions set forth in §§ 46-18-201 through 46-18-203, MCA, pertaining to Adult Probation and Parole. Section 41-5-208(4), MCA. A.D.T. violated the court’s transfer order and his dispositional order when he was terminated from outpatient sex offender treatment.
CONCLUSION
¶19 We conclude that, while the district court relied upon the wrong reason to deny A.D.T.’s motion to dismiss the State’s revocation petition, it nevertheless reached the correct result in finding A.D.T. had violated the terms of his disposition and imposing conditions pursuant to §§ 46-18-201 through 46-18-203, MCA. Betterman, ¶ 11. These conditions were imposed following a hearing and a finding of a violation of the youth court disposition. The requirements of § 41-5-208(4), MCA, therefore, had been met.
CHIEF JUSTICE McGRATH, JUSTICESWHEAT, COTTER and SHEA concur.
The 41 conditions were “standard” sex offender conditions requested by Adult Parole and Probation and included such requirements such as: that the “defendant” obtain a chemical dependency evaluation and follow through with treatment recommendations; complete Cognitive Principles & Restructuring Program; submit to reasonable searches; not associate with other probationers; not frequent places where children congregate; not have any contact with any individual under the age of 18; no internet access; treatment may be required at any time if deemed appropriate by the Parole & Probation Officer and therapist; in addition to numerous other conditions.
We will not address A.D.T.’s argument that the conditions were imposed in violation of his Sixth Amendment right to counsel since we presume that if a hearing were conducted A.D.T. would have been represented by counsel.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Matthew Sampley appeals from an order of the Montana Thirteenth Judicial District Court, Yellowstone County, dismissing for lack of jurisdiction the parenting and custody issues Matthew presented in his petition for dissolution of marriage. We affirm.
ISSUES
¶2 We review the following issues:
2. Did the District Court err by refusing to hold a hearing prior to issuing its order?
2. Did the District Court err by deciding that it lacked jurisdiction, over the parenting and custody issues?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Matthew and Michelle Sampley were married on Januaiy 23, 2010, in Alberta, Canada. In October 2010, they moved to Alaska, where their son, Cael, was bom in 2011. Michelle and Matthew moved to Washington in October 2011 and then to Billings, Montana during the end of September 2013.
¶4 In October 2013, Michelle and Cael travelled to British Columbia, Canada to stay with Michelle’s parents. They were scheduled to return to Montana on November 1, 2013. After Michelle’s father was diagnosed with cancer, Michelle and Cael extended their stay until the end of December 2013. Matthew visited Michelle and Cael in Canada for five days in November and for ten days in December. During Matthew’s December visit, Michelle told Matthew that she and Cael would stay in Canada through March 2014. In February 2014, Michelle travelled to Billings to retrieve her and Gael’s personal belongings. She removed these items without Matthew’s knowledge and returned to Canada.
¶5 Matthew filed a petition for dissolution with the Yellowstone County District Court on May 29,2014. Matthew’s petition, in addition to requesting dissolution of his marriage with Michelle, asked the District Court to resolve matters of Cael’s parenting and custody. Michelle responded to Matthew’s petition on July 16, 2014, filing a response and moving to dismiss all matters related to parenting and custody. In a brief in support of her motion, Michelle argued that the District Court lacked jurisdiction over parenting and custody matters. On August 14,2014, after Matthew filed a response brief and Michelle filed a reply, the District Court granted Michelle’s motion. It decided that Montana was not Cael’s “home state” for the purposes of § 40-7-201, MCA, and that it lacked jurisdiction over parenting and custody matters for this reason. Matthew appeals from this order.
STANDARDS OF REVIEW
¶6 We review for correctness a district court’s interpretation and application of statutes. In re Myrland, 2010 MT 286, ¶ 11, 359 Mont. 1, 248 P.3d 290. We review decisions left to the discretion of a district court for abuse of discretion. In re Guardianship of H.O., 2014 MT 285, ¶ 7, 376 Mont. 519, 337 P.3d 91. A district court’s determination of whether it lacks subject matter jurisdiction is a conclusion of law, which we review for correctness. In re Marriage of Buck, 2014 MT 344, ¶ 12, 377 Mont. 393, 340 P.3d 546. Our review of whether a party was afforded due process is plenary. In re Marriage of Cini, 2011 MT 295, ¶ 15, 363 Mont. 1, 266 P.3d 1257.
DISCUSSION
¶7 2. Did the District Court err by refusing to hold a hearing prior to issuing its order?
¶8 Matthew argues that he was deprived of the opportunity for a hearing in violation of Montana statute and due process. We disagree.
¶9 The District Court was not required to hold a hearing before dismissing the matter for lack of jurisdiction. Whether to hold a hearing is a matter left to the discretion of the district court, according to Mont. Unif. Dist. Ct. R. 2(c). Where there is no dispute of material fact, we have allowed district courts to resolve M. R. Civ. P. 12(b) motions without a hearing. General Constructors, Inc. v. Chewculator, Inc., 2001 MT 54, ¶¶ 37-40, 304 Mont. 319, 21 P.3d 604, overruled on other grounds by In re Estate of Big Spring, 2011 MT 109, ¶ 45, 360 Mont. 370, 255 P.3d 121; cf. Richards v. Cnty. of Missoula, 2009 MT 453, ¶ 26, 354 Mont. 334, 223 P.3d 878 (holding that a hearing was not necessary on a motion for summary judgment because it “would not have added anything to the proceedings.”). The District Court did not abuse its discretion in this case because there was ample evidence, based on the affidavits and other filings of the parties, upon which it could base its subject matter jurisdiction decision, and because there was no dispute between the parties concerning any material facts.
¶10 Despite Matthew’s contention otherwise, M. R. Civ. P. 12(i) does not require a different conclusion. M. R. Civ. P. 12(i) states that “[i]f a party so moves, any defense listed in Rule 12(b)(l)-(7)... must be heard and decided before trial unless the court orders a deferral until trial.” Matthew takes this to mean that an oral hearing is required before resolution of a Rule 12(b)(1) motion, if either party requests a hearing. This is incorrect. M. R. Civ. P. 12(i) does not require a court to hold an oral hearing before resolving an M. R. Civ. P. 12(b) motion, regardless of whether a party requests it.
¶11 M. R. Civ. P. 12(i) controls the schedule of a proceeding. It controls the order in which a district court must resolve the issues presented to it. It requires, upon the motion of a party, resolution of certain matters before a trial on the merits. See 2 James WM. Moore, Moore’s Federal Practice § 12.50, at 12-145 (3d ed. 2015) (discussing Fed. R. Civ. P. 12(i), which is identical to M. R. Civ. P. 12(i)); 5C Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1373, at 278-90 (3d ed. 2010) (discussing the former Fed. R. Civ. P. 12(d), which is substantially similar to M. R. Civ. P. 12(i)). However, it does not require a district court to conduct an oral hearing before resolving such preliminary matters. Although it requires a court to “hear” the preliminary matter before trial, it does not require an oral “hearing.” Based on Unif. Dist. Ct. R. 2(c), a district court may, in its discretion, “hear” the matter based upon affidavits and other filings of the parties alone.
¶12 This conclusion comports with our treatment of the virtually identical predecessor to M. R. Civ. P. 12(i), which was codified prior to 2011 at M. R. Civ. P. 12(d). It also comports with other courts’ treatment of the identical federal rules, upon which M. R. Civ. P. 12(i) and the former M. R. Civ. P. 12(d) were based. Committee Notes to M. R. Civ. P. 12, at 1232-33 (2014 Annotations); Compiler’s Comments to M. R. Civ. P. 12(e), at 686 (2010Annotations). In General Constructors, Inc., we held that a district court did not err by dismissing the case for lack of subject matter jurisdiction without a preliminary hearing. General Constructors, Inc., ¶¶ 37-40. Interpreting the former M. R. Civ. P. 12(d), we reasoned that there were no “material jurisdictional facts” in dispute and that “even if a court presumed all allegations made by [the plaintiff] were true, a Montana court could not assume subject matter jurisdiction.” General Constructors, Inc., ¶¶ 38-39. Similarly, interpreting F. R. Civ. P. 12(i), federal courts have decided that Rule 12(b) motions can be resolved on the basis of affidavits and other documentary matter and that, regardless of whether it is requested by a party, oral testimony is only required in particular circumstances, such as where there are disputed questions of fact or where the decision may turn on issues of credibility. E.g., Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir. 2013) (holding that courts may decide a motion to dismiss for lack of personal jurisdiction on the basis of affidavits alone or may conduct an evidentiary hearing); Valentin v. Hosp. Bella Vista, 254 F.3d 358,362-65 (1st Cir. 2001) (holding that courts have broad authority to hold evidentiary hearings but are not required to in order to determine their own jurisdiction); see Moore, supra, § 12.50, at 12-146; Wright, Miller & Kane, supra, § 1373, at 288-89.
¶13 Whether to hold a hearing on Michelle’s M. R. Civ. P. 12(b)(1) motion was a matter of discretion for the District Court. The material jurisdictional facts in this case were presented in affidavits and the pleadings, and the District Court did not abuse its discretion by refusing to hold a hearing.
¶ 14 Furthermore, the District Court did not fail to afford Matthew due process by refusing to hold a hearing. As Matthew correctly notes, a parent’s right to the care and custody of his or her child is a constitutionally protected liberty interest. A.W.S. v. A.W., 2014 MT 322, ¶ 16, 377 Mont. 234, 339 P.3d 414; Troxel v. Granville, 530 U.S. 57, 65, 120 S. Ct. 2054, 2060 (2000). He also correctly notes that due process requires notice and the opportunity to be heard before governmental deprivation of such a liberty interest. Steab v. Luna, 2010 MT 125, ¶ 22, 356 Mont. 372, 233 P.3d 351. However, even if we assume that the District Court failed to provide Matthew with the opportunity to be heard by not holding a hearing, Matthew was not deprived of due process. The District Court made no decision affecting Matthew’s right to the care and custody of his child. Matthew has not been deprived of any liberty interest. Indeed, the District Court specifically decided that it did not have the power to decide any matters related to Matthew’s custody of Cael. The District Court’s decision will not foreclose Matthew from pursuing matters related to the custody of Cael in a court that can properly exercise jurisdiction. See Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267 (a judgment has preclusive effect only as to the claims a parly has had the opportunity to litigate). Matthew has not been deprived of life, liberty, or property without due process of law.
¶15 2. Did the District Court err by deciding that it lacked jurisdiction over the parenting and custody issues?
¶16 Both parties agree that, pursuant to the Montana Uniform Child Custody Jurisdiction and Enforcement Act (UCCJEA), Montana courts can only exercise jurisdiction over parenting and custody issues if Montana is the “home state” of the child whose parenting and custody is at issue. See §§ 40-7-101 and -201, MCA; Stephens v. Fourth Judicial Dist. Court, 2006 MT 21, ¶ 13, 331 Mont. 40, 128 P.3d 1026. They also agree that Montana is a child’s “home state” only if that child has at some point “lived in” Montana for at least six months. See § 40-7-103(7), MCA; Stephens, ¶¶ 13,16. While Matthew acknowledges that Cael has not ever been present in Montana for a six-month period, he argues that Cael has “lived in” Montana such that Montana courts can exercise jurisdiction. Citing § 40-7-103(7), MCA, he contends that for the purposes of the UCCJEA, time “lived in” Montana includes periods of “temporary absence” from the State. He argues that Cael was present in Montana during September 2013 and then was “temporarily absent” from October 2013 through at least March 2014. For this reason, he argues that Cael “lived in” Montana for over six months and that the District Court erred when it decided that Montana is not Gael’s home state.
¶17 Michelle responds that this Court cannot consider whether Cael’s absence was temporary since this argument was raised for the first time on appeal. In the alternative, she argues that Cael’s absence was not temporary and that the District Court was correct to decide that Montana is not Cael’s home state.
¶18 We are able to consider Matthew’s argument that Cael’s absence from Montana was “temporary.” Although it is well settled that we will not consider new arguments or legal theories raised for the first time on appeal, In re the Parenting of N.S., 2011 MT 98, ¶ 36, 360 Mont. 288, 253 P.3d 863, Matthew’s argument that Cael’s absence was a “temporary absence” is not a new argument or theory. While neither party used the term “temporary absence,” this issue was disputed before the District Court. The parties discussed the length and character of Cael’s trip to Canada, Michelle’s intention in taking him to Canada, and the trip’s effect on Gael’s connection to Montana. Michelle argued that the absence meant that Cael did not live in Montana for an amount of time sufficient for Montana to exercise jurisdiction over parenting and custody matters, while Matthew argued otherwise. While not labeled as such, these arguments were about whether or not Cael’s absence was “temporary.” Thus, Matthew’s argument is not new on appeal.
¶19 Nevertheless, we agreewith Michelle’s argument that the District Court was correct when it determined that Montana lacks jurisdiction over matters relating to Cael’s parenting and custody. We agree with Matthew that a period of “temporary absence” is included in the time “lived in” Montana for the purposes of determining whether Montana is a child’s home state. Section 40-7-103(7), MCA. However, we do not agree that Cael “lived in” Montana for six months, even if we include the amount of time Cael was temporarily absent from the State. More specifically, we hold that Cael’s absence was temporary through February 2014 at the latest. Since Cael moved to Montana for the first time in late September 2013, this means that there was no six-month period of time that Cael “lived in” Montana.
¶20 This decision turns on whether Cael’s absence from Montana was “temporary” and, if so, how long the absence remained temporary. However, we have not yet considered what exactly constitutes a temporary absence and what distinguishes a temporary absence from an absence that will not be included as time a child lived in Montana for the purposes of § 40-7-103(7), MCA. The UCCJEA does not define the term, and the plain language of the UCCJEA provides limited help in determining what constitutes a “temporary absence.” The metes and bounds of the term are not clear on the face of § 40-7-103(7), MCA, nor does the statute specify what factors courts should consider when determining whether an absence from Montana is temporary.
¶21 When applying a statute and when presented with such statutory ambiguiiy, this Court looks beyond the bare statutory language and attempts to give effect to the legislature’s intent. In re K.M.G., 2010 MT 81, ¶ 26, 356 Mont. 91, 229 P.3d 1227. We consider legislative history in such cases, and when considering uniform laws, such as the UCCJEA, we also consider the derisions of other jurisdictions that have interpreted the same statutory language. E.g., Stoican v. Wagner (In re Estate of Lawlor), 2015 MT 54, ¶ 23, 378 Mont. 281, 343 P.3d 577; see Buck, ¶ 21. Both sources are helpful here.
¶22 Forty-nine states have adopted the UCCJEA, and several courts have considered what constitutes a “temporary absence” for the purposes of determining a child’s home state. Despite the UCCJEA’s purpose of uniform state treatment of child custody jurisdiction issues, these jurisdictions’ treatment of the term has been far from uniform. See, e.g., Norris v. Norris, No. S-15439, 345 P.3d 924, 2015Alas. LEXIS 29, 12 n.22 (Alaska Mar. 27, 2015); S.M. v. A.S., 938 S.W.2d 910, 917-18 (Ct. App. Mo. 1997). Instead, three primary approaches have developed. Some courts have considered only the duration of an absence in determining whether the absence is temporary. E.g., In re Marriage of Schoeffel, 644 N.E.2d 827, 829 (Ill. App. Ct. 4th Dist. 1994). Others have considered the intention of a child’s parent, parents, or other caregivers. E.g., Ogawa v. Ogawa, 221 P.3d 699, 704 (Nev. 2009) (absence was temporary because parents intended it to be a three-month vacation). Still others have adopted a “totality of the circumstances” test, considering factors like the parties’ living arrangement, the location of the child’s doctor, receipt of public benefits, and frequency of relocation, in addition to duration and intention. E.g. Norris, 2015 Alas. LEXIS 29, 12-15; In re A.W., 94 A.3d 1161, 1167-68 (Vt. 2014); Carter v. Carter, 758 N.W.2d 1, 8-9 (Neb. 2008); Chick v. Chick, 596 S.E.2d 303, 308 (N.C. Ct. App. 2004). We are not particularly persuaded by the reasoning of these courts to adopt any of these approaches. The decisions we have reviewed provide little rationale for why any particular approach best gives effect to legislatures’ intents in adopting the UCCJEA.
¶23 However, the legislative history of Montana’s UCCJEA provides support for a totality of the circumstances approach in at least some instances. In 1977, Montana adopted the Uniform Child Custody Jurisdiction Act (UCCJA). Ch. 537, L. 1977; In re Marriage of Stoneman, 2003 MT 25, ¶ 12, 314 Mont. 139, 64 P.3d 997. Prior to the Act’s enactment by all 50 states, states’ disparate and conflicting exercise of jurisdiction over child custody matters encouraged forum shopping, self-help, and re-litigation of custody matters in never ending disputes. UCCJA Prefatory Note, 9 U.L.A. 261, 263-65 (1999). The purpose of the UCCJA was to eliminate such problems by establishing uniform criteria for states’ exercise of jurisdiction over child custody matters. Section 40-8-102, MCA (1995); UCCJA § 1, 9 U.L.A. at 271; Stoneman, ¶ 12. The drafters of the UCCJA adopted what was meant to be a bright-line rule: a state could exercise jurisdiction over a custody matter if it was the child’s “home state.” Section 40-7-201, MCA; UCCJA § 3 Comment, 9 U.L.A. at 308-09. The drafters stated that the six-month requirement for establishing a home state was based on a “reasonable assumption of fact.” Specifically, that “[m]ost American children are integrated into an American community after living there six months” and, consequently, that this period “seem[s] to provide a reasonable criterion for identifying the established home.” UCCJA § 3 Comment, 9 U.L.A. at 308 (quoting Leonard G. Ratner, Child Custody in a Federal System, 62 Mich. L. Rev. 795,818 (1964)).
¶24 Following revision of the UCCJA and the resulting creation of the UCCJEA, Montana adopted the UCCJEA. Ch. 91, L. 1999; Stoneman, ¶ 14. The drafters of the UCCJEA recognized that inconsistencies among state interpretation and enforcement of the UCCJA had hindered the purposes of the UCCJA. They made revisions to the uniform law to help further the UCCJA’s goals. UCCJEA Prefatory Note, 9 U.L.A. 649,650-54 (1999). The definition of “home state” was left substantially unchanged between the UCCJA and UCCJEA. UCCJEA § 201 Comment, 9 U.L.A. at 671-72; compare § 40-7-103(7), MCA, with § 40-7-103(5), MCA (1997). Thus, it is reasonable to impute the comments and purposes behind the definition in the UCCJA to the UCCJEA’s definition. This is especially true since Montana did not repeal the UCCJA definition and then enact the language of the UCCJEA, but instead amended the language of the UCCJA. See Sec. 1-14, Ch. 91, L. 1999. The language and legislative history of that amendment do not seem to express an intent to alter the purpose or meaning of the “home state” requirement. See Sec. 4. Ch. 91, L. 1999.
¶25 Thus, the Montana Legislature’s intent in adopting the UCCJA and UCCJEA definition of “home state” was to create a bright-line rule based on the assumptions that a state is the established home of a child after the child is integrated into a community of the state and that such integration usually occurs after six months of living in a community. In light of this intent, adopting a definition of “temporary absence” that would render these assumptions unreasonable would defeat the Legislature’s purpose for adopting its definition of “home state.” We, therefore, conclude that an absence is not temporary if the character of the absence would make it unreasonable to assume that a child would integrate into a community of Montana dining the portions of the six-month period when the child is not absent from the state.
¶26 A totality of the circumstance approach makes the most sense for determining whether an absence renders the integration assumption unreasonable. We cannot say that a single factor will be dispositive to this determination in all cases; neither the intentions and expectations of the parents nor the duration of the absence will control every situation. Instead, the continued reasonableness of the integration assumption in light of an absence is best considered in the context of the totality of the circumstances surrounding the absence.
¶27 While such a standard is somewhat more subjective than the bright-line, six-month rule imposed by the legislature; and while such subjectivity interferes with the UCCJEA’s goal of uniform application of child custody jurisdiction laws between states; requiring temporary absences to be measured against the purposes and underlying assumptions of the intended bright-line rule in an objective test seems to provide a rule that is as precise as possible. At tibe very least, we think that providing such a standard will better promote uniform treatment of child custody jurisdiction than the similar standardless tests of other states.
¶28 In this case, the District Court did not err when it decided that Montana is not Gael’s home state. Cael did not “live in” Montana for six months because he was present in Montana for one month at most and his “temporary” absence lasted at most another four months. Michelle and Cael moved to Billings at the end of September 2013. They remained there for somewhere between four days and a month, depending on whether Michelle or Matthew is to be believed. Cael has not returned to Billings or Montana since. If this absence from Montana was ever “temporary” it ceased being “temporary” in February 2014, at the latest. Cael has been absent from Montana since leaving in September 2013, and there is no evidence that the parties have attempted to make a home for Cael in Montana. Indeed, all of Cael’s possessions were removed from Montana during February 2014. Moreover, by Matthew’s admission, Michelle informed Matthew during February 2014 that she no longer intended to return with Cael to Billings. Thus, as of February 2014, Michelle and Cael had lived in Billings for a month or less, were living in Canada, had moved all of their possessions to Canada, and had no intention to return to Billings. It is unreasonable to assume that most children would integrate into the Billings community despite the circumstances accruing in the present case as of February 2014. Based on its characteristics, therefore, CaeFs absence was not temporary as of February 2014 at the latest. Combining his periods of physical presence in and temporary absence from Montana, Cael “lived in” Montana for the purposes of §§ 40-7-103(7) and -201, MCA, from the end of September 2013 through February 2014 at the latest. Gael, therefore, “lived in” Montana for no more than five months. This is short of the six months required for Montana to exercise jurisdiction. Section 40-7-201, MCA. For this reason, the District Court did not err when it decided that CaeFs home state “may very well be Washington, may very well be Canada, but ... is not Montana under the factual circumstances.” Affirmed.
CONCLUSION
¶29 The District Court did not err by resolving Michelle’s M. R. Civ. P. 12(b)(1) motion before holding a hearing, despite Matthew’s request for a hearing. The District Court also did not err when it determined thatit lacked subject matter jurisdiction over the child custody matters in this case. We affirm the District Court’s order dismissing the matters related to CaeFs custody.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, SHEA and RICE concur.
We do not decide whether the contrapositive is true. As the stated conclusion is sufficient to resolve the present appeal, we need not consider whether all absences that do not render the integration assumption unreasonable are necessarily “temporary.”
|
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Monique Lay (Lay) appeals from the order entered by the First Judicial District Court, Lewis and Clark County, granting summary judgment in favor of the State of Montana Department of Military Affairs, Disaster and Emergency Services Division, John Walsh, Erv Kent, Ed Tinsley, Paul Grimstad, and Jessica Davies (collectively, the Defendants) on Lay’s claims alleging various torts. Lay appeals the District Court’s conclusion that her claims were time-barred under the Montana Human Rights Act. We affirm.
¶2 We address the following issue on appeal:
¶3 Did the District Court err by concluding that Lay’s claims were time-barred as a matter of law under the Montana Human Rights Act?
FACTUAL AND PROCEDURAL BACKGROUND
¶4 On January 11,2012, Lay’s position as public information officer for the Emergency Services Division (Division) of the State of Montana Department of Military Affairs was eliminated during implementation ofthe Division’s reduction-in-force (RIF) policy. After elimination ofher position, Lay filed a grievance with the Department of Labor and Industry Hearings Bureau (Bureau) in accordance with the State of Montana’s grievance procedure.
¶5 Lay alleged the Division terminated her in retaliation for her complaint that sexual favoritism had occurred within the Division. Specifically, Lay contended she was discharged because she had complained that another Division employee, Jessica Davies, received favorable treatment for engaging in a sexual relationship with Division supervisor, Paul Grimstad. On March 21,2012, the Bureau conducted a hearing on Lay’s claims and thereafter dismissed Lay’s complaint, concluding that the Division terminated Lay solely for business reasons related to the RIF. The Bureau informed Lay she could appeal to district court. However, Lay chose not to appeal.
¶6 Instead, Lay filed a discrimination complaint with the Montana Human Rights Bureau of the Department of Labor and Industry (Department) in which she restated her allegations of sexual favoritism and retaliation. A Department officer conducted an investigation into Lay’s complaint, and on August 13, 2012, the Department issued a decision order concluding that Lay’s allegations were not supported by a preponderance of the evidence. In its written decision dismissing the complaint, the Department informed Lay that, if she wished to pursue her claim in district court, she had 90 days under the Montana Human Rights Act to commence a civil action. Lay did not do so.
¶7 On January 9, 2013, Lay filed the present action in the First Judicial District Court. Lay’s complaint alleged causes of action titled as follows: “Count 1: Conspiracy to Violate Constitutional Rights”; “Count 2: State Constitutional Rights Deprivation”; “Count 3: Monell Claim”; “Count 4: Wrongful Discharge”; and “Count 5: Attorneys Fees.” After both parties moved for summary judgment, the District Court granted summary judgment in favor of the Defendants, concluding Lay’s claims were time-barred as a matter of law under the Montana Human Rights Act. The court reasoned the Montana Human Rights Act provided the exclusive remedy for Lay’s claims because, while Lay had attempted to re-characterize her claims within her complaint, the gravamen of her claims remained sexual favoritism and retaliation. The court determined that Lay was required to pursue these claims under the procedures provided in the Montana Human Rights Act, including the requirement that a party file a complaint in district court within 90 days of the Department’s decision.
¶8 Lay appeals.
STANDARD OF REVIEW
¶9 We review orders of summary judgment de novo, applying the same criteria used by the district court pursuant to M. R. Civ. P. 56. LaTray v. City of Havre, 2000 MT 119, ¶ 14, 299 Mont. 449, 999 P.2d 1010. Summary judgment is only appropriate when “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c).
¶10 The party seeking summary judgment bears the initial burden of establishing an absence of genuine issues of material fact. LaTray, ¶ 14. If the moving party satisfies this initial burden, then the burden shifts to the non-moving party to set forth specific facts, not merely denials, speculation, or conclusoiy statements, in order to establish that a genuine issue of material fact does indeed exist. LaTray, ¶ 14.
DISCUSSION
¶11 Did the District Court err by concluding that Lay’s claims were time-barred as a matter of law under the Montana Human Rights Act?
¶12 The Montana Human Rights Act (MHRA), codified in Title 49 of the Montana Code, protects the right of an employee to “hold employment without discrimination.” Section 49-1-102(1), MCA. The MHRA declares that it is an “unlawful discriminatory practice” for an employer “to discriminate against a person in compensation or in a term, condition, or privilege of employment because of... sex when the reasonable demands of the position do not require” such a distinction. Section 49-2-303(1), MCA. The MHRA further prohibits any governmental entity from discharging or “otherwise discriminating] against an individual because the individual has opposed” unlawful discrimination. Section 49-2-301, MCA. If an employee complains of “acts constituting an alleged violation” of the MHRA, the MHRA provides the “exclusive remedy,” and the employee must seek redress in conformance with the procedures set forth in the MHRA. Section 49-2-512(1), MCA. The MHRA is explicit that a “claim or request for relief based upon the acts may not be entertained by a district court other than by the procedures specified in [the MHRA].” Section 49-2-512(1), MCA. If the charging party’s complaint is dismissed by the Department, the party is permitted to “commence a civil action for appropriate relief on the merits of the case in the district court in the district in which the alleged violation occurred.” Section 49-2-512(3), MCA. However, if “the charging party fails to commence a civil action within 90 days after the dismissal has been issued, the claim is barred.” Section 49-2-512(3), MCA.
¶13 Lay argues that, despite her failure to commence a civil action in district court within 90 days following the Department’s decision, her claims are not time-barred because the MHRA is inapplicable to her claims. Lay contends her claims are not based on allegations of discrimination or retaliation in employment. Lay argues that “the heart” of her complaint is a violation of constitutional due process of law. She asserts the Division violated her right to due process when it failed “to consider her skills, qualifications, experience, performance, and length of continuous service” prior to her termination, as required under the REF policy.
¶14 The Division counters the “core of [Lay’s] case is an allegation that she was retaliated against for objecting to the opportunities afforded to a colleague in exchange for sex,” and that “such a claim ‘may not be entertained by a district court’ without following the procedures” outlined in the Montana Human Rights Act. The Division argues “the law is clear that [Lay] had an avenue for pursuing her claim, and cannot now file a lawsuit under different legal theories to circumvent those provided procedures.”
¶15 This Court is no stranger to attempts to characterize a claim in such a way so as to avoid the exclusive procedures set forth in the MHRA. See Edwards v. Cascade Cnty Sheriff’s Dep’t., 2009 MT 451, 354 Mont. 307, 223 P.3d 893; Vettel-Becker v. Deaconess Med. Ctr. of Billings, Inc., 2008 MT 51, 341 Mont. 435, 177 P.3d 1034; Saucier v. McDonald’s Rests, of Mont., Inc., 2008 MT 63, 342 Mont. 29, 179 P.3d 481; Arthur v. Pierre Ltd., 2004 MT 303, 323 Mont. 453, 100 P.3d 987; Shields v. Helena Sch. Dist. No. 1, 284 Mont. 138, 943 P.2d 999 (1997); Bruner v. Yellowstone Cnty, 272 Mont. 261, 900 P.2d 901 (1995); Fandrich v. Capital Ford Lincoln Mercury, 272 Mont. 425, 901 P.2d 112 (1995); Harrison v. Chance, 244 Mont. 215, 797 P.2d 200 (1990). In determining whether the MHRA is applicable, we look to the gravamen of the party’s complaint, as opposed to the party’s characterization of her claims. Saucier, ¶ 56. We have recognized that “litigants can frequently employ tort terminology to improperly re-characterize” what is at the heart of their complaint, Saucier, ¶ 56 (citing Harrison, 244 Mont, at 223,797 P.2d at 205; Arthur, ¶¶ 25-27), and that permitting a party to bypass the MHRA’s procedures in so doing “would be to eviscerate the mandate” of the MHRA, requiring that it provide the exclusive remedy for acts constituting violations thereof. Harrison, 244 Mont. at 223, 797 P.2d at 205. Thus, we undertake a gravamen analysis in which we focus on the “nature of the alleged conduct.” Saucier, ¶ 57.
¶16 At the outset, we note that the parties do not contest the District Court’s determination that sexual favoritism is unlawfiil sex discrimination. As noted above, while retaliation is prohibited by the MHRA, the retaliation must be in response to unlawful discrimination in order to necessitate the applicability of the MHRA procedures. Section 49-2-301, MCA. Given the posture of this case, we assume, without deciding, that sexual favoritism is unlawful discrimination based on sex. It is well established that it is “not this Court’s obligation to locate authorities or formulate arguments for a party in support of positions taken on appeal.” Cutler v. Jim Gilman Excavating, Inc., 2003 MT 314, ¶ 22, 318 Mont. 255, 80 P.3d 1203 (citing In re B.P., 2001 MT 219, ¶ 41, 306 Mont. 430, 35 P.3d 291). We recognize the issue of whether, and in what circumstances, sexual favoritism may constitute sex-based discrimination has divided federal and state courts, contributing to much scholarly debate. See Meghan E. Bass, Note, Dangerous Liaisons: Paramour No More, 41 Val. U.L. Rev. 303, 324 (2006) (describing the issue as an “expansive judicial battleground”); Susan J. Best, Comment, Sexual Favoritism: A Cause of Action Under a ‘Sex-Plus’Theory, 30 N. HI. U.L. Rev. 211,224 (2009) (discussing the “split among the federal circuits on whether widespread sexual favoritism is a cause of action under the hostile work environment theory of sexual harassment”); Paige I. Bemick, Article, You’re Sending the Wrong Message: Sexual Favoritism and the Workplace, 7-1 Tenn. J. L. & Pol’y 141,145 (2011) (discussing the “divergent views on sexual favoritism”).
¶17 On that assumption, we conclude that Lay’s claims are subject to the MHRA. The gravamen of the complaint is the factual allegation that Lay’s employment was terminated because she objected to Davies receiving favorable treatment for engaging in a sexual relationship with Grimstad. Although Lay couches her claims in terms of the RIF policy, her complaint is premised entirely on an allegation of sexual favoritism and her employer’s retaliation for her objection to the practice. Lay admits as much in the complaint, stating she “was discriminated and retaliated against solely because she objected to Grimstad’s improper relationship with Davies and the overt favoritism that was being showed to Davies by Grimstad.” (Emphasis added.) Lay’s allegations of discrimination and retaliation are repeated throughout her complaint, which provides: (1) the “Defendants unlawfully discriminated and retaliated against Lay by laying her ofF after she “complained about favoritism that Grimstad was affording to Davies in exchange for sex”; (2) Lay’s employment was “taken in retaliation for Lay’s complaint about the favoritism that Grimstad was providing to Davies in exchange for sexual favors, and Lay’s testimony in the ensuing investigation”; and (3) the Defendants “deliberately and intentionally eliminated Lay’s position under the pretext of a reorganization and reduction-in-force with the specific purpose of forcing Lay” out of the Division “in retaliation for [her] complaints about the favoritism.” Lay’s allegations of sexual favoritism and retaliation are, in fact, the only allegations contained in the complaint. If these allegations were removed from the complaint, Lay would have no actionable claim of any kind. Because the gravamen of the complaint is an allegation that the Division terminated Lay in retaliation for her objection to sexual favoritism in employment, the District Court did not err by holding that Lay’s claims were subject to the procedures set forth in the MHRA, and as a result were time-barred.
¶18 We affirm the District Court’s entry of summary judgment in favor of the Defendants.
JUSTICES SHEA, BAKER, COTTER and McKINNON concur.
Sexual favoritism is defined generally to denote the situation where “a supervisor grants benefits and/or promotions to an employee with whom he or she is having a sexual and/or romantic relationship, and in turn denies these benefits and/or promotions to qualified third-party employees.” Mary Kate Sheridan, Article, Just Because It’s Sex Doesn’t Mean It’s Because of Sex: The Need for New Legislation to Target Sexual Favoritism, 40 Colum. J.L. & Soc. Probs. 379,383 (2007).
This has become less frequent since the Legislature’s revision of the MHRA in 2007. See Griffith v. Butte Sch. Dist. No. 1, 2010 MT 246, 358 Mont. 193, 244 P.3d 321 (discussing effects of the 2007 revisions to the MHRA).
The District Court also determined that Lay could not recover separately under the Montana Wrongful Discharge From Employment Act, § 39-2-901, MCA, et seq. Lay makes a passing reference to the court’s determination in a single sentence, stating: “Nowhere in the causes of action alleged under Dorwart, Monell, or the Wrongful Discharge Act is there any kind of requirement that Lay go through the procedures identified in the Human Rights Act, or which provide that § 49-2-512, MCA constitutes the ‘exclusive remedy for the civil rights violations visited upon her as complained in this case.” As we explained above, it is not this Court’s obligation to develop arguments for a party on appeal. Cutler, ¶ 22. Nonetheless, with respect to the Montana Wrongful Discharge From Employment Act, we have previously concluded that if the plaintiffs claim is properly subject to the MHRA, the plaintiff cannot currently file under the Montana Wrongful Discharge From Employment Act. See Fandrich v. Capital Ford Lincoln Mercury, 272 Mont. 425, 432, 901 P.2d 112, 116 (1995) (where the plaintiff was “barred from bringing his claim pursuant to the Montana Wrongful Discharge From Employment Act because the Human Rights Act provide[d] his exclusive remedy”).
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JUSTICE COTTER
delivered the Opinion of the Court.
¶1 Mark Spotted Horse appeals from a jury verdict and judgment rendered in favor of BNSF Railway Company in the Eighth Judicial District Court, Cascade County.
¶2 Spotted Horse presents four issues on appeal. Because we reverse and remand, we need address only two issues, which we restate as follows:
1. Whether the District Court abused its discretion in declining to grant Spotted Horse’s request for a default judgment based on the spoliation of video footage taken at BNSF’s Diesel Shop on the day Spotted Horse was injured.
2. Whether the District Court abused its discretion when it instructed the jury as to BNSF’s duty of care in a FELA action.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 On April 28, 2010, Mark Spotted Horse, a BNSF Railway Company (BNSF) machinist, filed suit against BNSF alleging negligence under the Federal Employers’ Liability Act, 45 U.S.C. §§ 51- 60. Spotted Horse claimed that on September 13,2009, while working in BNSFs Diesel Shop in Havre, Montana, he suffered a disabling ipjury when his co-worker Jim Syverson inadvertently lowered a locomotive engine compartment hatch on his head. Spotted Horse reported the incident to his BNSF supervisors and was immediately taken to the hospital by BNSF Shop Superintendent Beau Price. Shortly thereafter, Spotted Horse filed an employee injury report indicating that the rope used to lower the engine compartment hatch had slipped through Syverson’s hand. According to the injury report, the hatch then struck Spotted Horse on the top of his hard hat causing him to suffer headaches and neck pain.
¶4 BNSF General Foreman Paul McLeod immediately commenced to investigate and collect information relative to Spotted Horse’s injuries. In coordination with Price and General Electric (GE) Senior Site Manager Rob Wood, McLeod collected Spotted Horse’s hard hat, conducted reenactments of the alleged injury, took photographs, and interviewed and obtained written statements from both Spotted Horse and Syverson.
¶5 At the time of the alleged incident, the Diesel Shop had a digital camera recording system in place, which consisted of multiple video cameras positioned at various locations throughout the shop stalls. The video cameras ran continuously, recording 24 hours per day, seven days per week, and generated footage that was viewable real-time on a monitor in the shop supervisor’s office.
¶6 For purposes of investigating injuries and rule violations and implementing possible disciplinary actions against employees, BNSF personnel routinely requested copies of video footage by emailing or calling BNSF’s Resource Operation Center (ROC), located in Fort Worth, Texas. The ROC administers resource protection, includingthe preservation of video footage. Absent a video footage request within a specified period of time, typically 15 to 30 days, the digital recording system automatically overwrites old video footage with new video footage.
¶7 Spotted Horse maintains that during a post-incident interview he requested a copy of the video footage from the shop’s cameras. Later, after his lawsuit was filed, Spotted Horse made several discovery requests, including a request for the production of videos and photographs of the work area where the alleged injury occurred. According to Spotted Horse, BNSF initially produced three photographs, but it never referenced or provided any video footage. Spotted Horse eventually moved the court for an order to compel BNSF to answer his discovery requests. BNSF responded that McLeod had contacted the ROC to request video footage from the two stalls where Spotted Horse was allegedly injured. However, as stated in BNSFs response, the ROC informed McLeod “that the videos overwrite every 15 to 30 days, therefore any video footage from 9/13/2009 no longer exists.” BNSF stated that “[ajfter further inquiry, it was determined that there is no record of the video being requested in September or October 2009” (the six weeks following the accident).
¶8 McLeod subsequently acknowledged in a deposition that he had utilized video recordings for investigations of workers for rule violations as well as in connection with injuries and was aware that the video recording system would overwrite recordings after a certain period of time. McLeod testified that on the evening of the incident, he and Price had “probably watched about 15 minutes” of video footage from one camera located in the stall purportedly closest in proximity to where the alleged injury occurred. According to McLeod, he “[ajbsolutely ... could have requested” a copy of the video footage. However, McLeod determined “[tjhere was no evidence to preserve” because that particular camera did not capture the area where Spotted Horse and Syverson were working nor did the camera show Spotted Horse’s alleged injury. McLeod stated that he had not viewed video footage from any other camera in the shop and agreed that other cameras may have captured Spotted Horse and Syverson performing other acts in the shop.
¶9 Likewise, in his deposition, Price stated that he watched video footage “once or twice” with McLeod, but that they “could see nothing there.” BNSF indicated that GE representative Wood also viewed the video and had reached the same conclusion.
¶10 Although he did not immediately contact BNSF’s claims department regarding the investigation into Spotted Horse’s alleged injury, McLeod eventually submitted his findings to BNSF Senior Claims Representative Nancy Ahem. Ahem stated that she was not aware of any BNSF policy that instructs BNSF supervisors to immediately notify the claims department so that evidence can be preserved. However, she stated that if she is apprised of a situation where there is video footage as evidence, she will make a request from ROC. No such request was made here, as BNSF did not make a timely request to preserve any of the video footage from any of the cameras in place at the time of the alleged incident.
¶11 On July 27, 2012, Spotted Horse moved for a default judgment against BNSF on the issues of liability, causation, and contributory negligence based on the alleged spoliation of video footage and other discovery abuses. The District Court denied the motion, but prohibited BNSF from introducing or referring to any testimony or evidence about the video footage unless Spotted Horse first chose to introduce that information. In that event, BNSF would be free to tell the jury what the videos ostensibly showed.
¶12 A juiy trial commenced on December 2,2013. During trial, both parties presented testimony and evidence regarding the relevancy and unavailability of the video footage.
¶13 Among the jury instructions given, Instruction No. 2 stated, in pertinent part:
If it appears that a party intentionally or recklessly destroyed or concealed evidence favorable to the other party, then you should view any contrary evidence presented by that party with distrust.
Additionally, over Spotted Horse’s objection, the district court provided Instruction No. 11 concerning BNSFs duty of care, which stated the following:
BNSF was not obligated to eliminate all risks in the work place; it was only obligated to eliminate unreasonable risks.
¶14 On December 10, 2013, the jury found in favor of BNSF and the case was dismissed with prejudice. Spotted Horse subsequently moved for a new trial, which the District Court denied. Spotted Horse appeals.
STANDARDS OF REVIEW
¶15 We review a District Court’s decision to impose or decline to impose sanctions for an abuse of discretion. Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 26, 303 Mont. 274, 16 P.3d 1002. In doing so, we generally defer to the district court because it is in the best position to determine both whether the party in question has disregarded the opponent’s rights, and which sanctions are most appropriate. Richardson v. State, 2006 MT 43, ¶ 21, 331 Mont. 231, 130 P.3d 634. In determining whether the trial court abused its discretion, the question is not whether the reviewing court agrees with the trial court, but rather whether the trial court acted arbitrarily without the employment of conscientious judgment or exceeded the bounds of reason, in view of all the circumstances. Schuff, ¶ 27.
¶16 We review for an abuse of discretion whether the district court correctly instructed the jury. Peterson v. St. Paul Fire & Marine Ins. Co., 2010 MT 187, ¶ 22, 357 Mont. 293, 239 P.3d 904. “[W]hile a district court has broad discretion to formulate jury instructions, that discretion is limited by the overriding principle that jury instructions must fully and fairly instruct the jury regarding the applicable law.” Peterson, ¶ 22 (quoting Tarlton v. Kaufman, 2008 MT 462, ¶ 19, 348 Mont. 178, 199 P.3d 263) (internal quotation marks omitted). In reviewing whether a particular instruction was properly given, “we consider the instruction in its entirety, as well as in connection with the other instructions given and with the evidence introduced at trial.” Tarlton, ¶ 19 (quoting Murphy Homes, Inc. v. Muller, 2007 MT 140, ¶ 74, 337 Mont. 411, 162 P.3d 106).
DISCUSSION
¶17 Issue 1: Whether the District Court abused its discretion in declining to grant Spotted Horse's request for a default judgment based on the spoliation of video footage taken at BNSF°s Diesel Shop on the day Spotted Horse was injured.
¶18 Spotted Horse argues that the District Court abused its discretion in refusing to enter default judgment against BNSF for spoliation of the Diesel Shop’s video footage taken on the day of Spotted Horse’s alleged injuxy. Spotted Horse contends that BNSF’s intentional destruction of video footage resulted in irreparable prejudice and forestalled any means to a fair resolution of his claim. Under the circumstances, Spotted Horse insists the only adequate sanction was an entiy of default judgment against BNSF. BNSF counters that its actions were not intentional or committed in bad faith and further maintains that Spotted Horse did not suffer prejudice because the video footage did not capture any of the alleged events.
¶19 In its denial of Spotted Horse’s motion for default judgment, the District Court concluded that Spotted Horse had failed to present sufficient evidence to warrant “the most drastic of all sanctions, default judgment.” As a remedial measure, the court prohibited BNSF from introducing or referring to any testimony or evidence that McLeod, Price, and Wood had watched the video footage and determined that the alleged incident was not viewable, reasoning that “BNSF should not be allowed to benefit by its failure to preserve the video footage.” However, the court concluded that if Spotted Horse “tactically]” chose to present information about the videos to the jury, he would forego the court’s protection. In addition, the district court utilized a portion of Instruction No. 2 as an adverse instruction. Against this backdrop, we turn to the question of whether the District Court abused its discretion in failing to impose a default judgment.
¶20 District courts “are well equipped under the Montana Rules of Civil Procedure to address the problem [of spoliation of evidence] as it occurs and deal with it accordingly, even entering default when the circumstances justify such relief.” Oliver v. Stimson Lumber Co., 1999 MT 328, ¶ 32, 297 Mont. 336, 993 P.2d 11. Under certain circumstances, this Court has upheld or imposed default judgment as an appropriate sanction for discovery abuses. See e.g., Richardson, ¶¶ 65,68 (default judgment appropriate where the State’s “pattern of willful and bad faith conduct” amounted to a “blatant and systemic” abuse of the discovery process that “undermined the integrity of the entire proceeding”); Culbertson-Froid-Bainville Health Care Corp. v. JP Stevens & Co. Inc., 2005 MT 254, ¶ 17, 329 Mont. 38, 122 P.3d 431 (default judgment warranted where discoveiy responses were “evasive [and] woefully incomplete” resulting in a “flagrant, complete and persistent disregard” of court orders and rules of civil procedure); Schuff, ¶ 81 (affirming imposition of a default judgment for discovery abuses after defendant acted “willfully and in bad faith shield[ing] Schuff from a clear view of the truth”); cf. Stokes v. Ford Motor Co., 2013 MT 29, ¶ 20, 368 Mont. 365, 300 P.3d 648 (given that there was no wanton disregard of court orders or an intention to “slow down discovery,” district court did not abuse its discretion in declining to enter default judgment).
¶21 We have emphasized that discovery abuses “must no longer be dealt with leniently and that the transgressors of discovery abuses should be punished rather than encouraged repeatedly to cooperate.” Schuff, ¶ 70; see also Richardson, ¶ 56. We have further stated that concerns “related to crowded dockets and the responsibility to maintain fair and efficient judicial administration have shifted the traditional reluctance to impose discoveiy-related sanctions to a judicial intolerance of discoveiy abuses.” Schuff, ¶ 70 (quoting McKenzie v. Scheeler, 285 Mont. 500, 506, 949 P.2d 1168, 1171 (1997)).
¶22 Although the issue before us relates to the spoliation of video footage before the initiation of the formal discoveiy process, the rationale for imposing sanctions on a party for discovery abuse applies here with equal force. As a sophisticated and recurrent party to litigation, BNSF is aware of its obligation to preserve evidence. In fact, it has in the past been subject to complaints from litigants concerning spoliation of evidence, and — as Spotted Horse asserted in the District Court — has previously been admonished in court for concealing or disposing of evidence.
¶23 For example, in the Thirteenth Judicial District of Montana, the district court granted the plaintiffs motion for reliefrelating to liability and struck BNSFs defense of contributory negligence after BNSF improperly disposed of a handset and cord, which were “key evidence of liability.” Order Granting Relief, Silliker v. BNSF, DV 04-0955, 3-4 (Thirteenth Jud. Dist. Jan. 27,2010). In granting relief, the court did not find bad faith, but stated that “BNSF knew of their [sic] duty to secure and retain possession of evidence” and “without that evidence both Silliker and BNSF would be deprived of the ability to reconstruct its condition prior to the incident, thereby making proof of either party’s respective positions impossible.” Order Granting Relief, Silliker v. BNSF, DV 04-0955, 4.
¶24 In Dolan v. BNSF, the Eighth Judicial District Court ordered BNSF to pay the plaintiffs attorney fees and associated costs of discovery after finding that BNSF had failed to be diligent in acquiring information about company vehicles which “existed and was readily available to [BNSF] at the time the Plaintiff propounded discovery requests]” relating to his underlying claims. Order, Dolan v. BNSF, ADV 01-1090(B), 4-5 (Eighth Jud. Dist. Aug. 22,2003).
¶25 In Schmidt v. BNSF, the same court addressed various discovery-related issues and abuses. It concluded that BNSFs “non-disclosure [of email communications, injury reports, and claims records] is neither isolated nor relatively insignificant” and “yet another instance in a larger recurring pattern and practice of dilatory and obstructive discovery practices in this and other FELA cases before this Court.” Order Den. BNSF Mot. for Prot. Orders and Aff. Previously-Imposed Disc. Sanctions on Addtfl Grounds, Schmidt v. BNSF, CDV-04-152(d), 11 (Eighth Jud. Dist. Ct. Mar. 1, 2006).
¶26 The district court made similar observations and conclusions when it addressed alleged discovery abuses in a related case, Danielson v. BNSF. “[A]llowing BNSF to simply claim ‘no harm-no foul’ and to remedy its non-disclosure with belated production and supplemental discovery by Plaintiff would allow BNSF to unjustly benefit” irom its conduct “without any deterrent to the continuance of this practice.” Order on Misc. Mot. and Order Imposing Sanctions in re Proof of Negligence and BNSF Vocational Rehab Program, Danielson v. BNSF, CDV-04-124(d), 16-17 (Eighth Jud. Dist. Ct. Mar. 13,2006).
¶27 BNSF is a seasoned and sophisticated corporate litigant well aware of its obligations when responding to workplace violations and employee injuries and accidents. These obligations include the retention of evidence relevant to injury claims. In this case, BNSF supervisors took immediate action within minutes of Spotted Horse’s alleged accident. While Price drove Spotted Horse to the hospital for medical treatment, BNSF supervisors began gathering and analyzing information related to the incident. Within hours of the alleged accident, according to testimony, three individuals viewed a brief portion of the video footage from one camera in the shop stall where Spotted Horse and Syverson were apparently working. And yet — inexplicably—this and other video footage from the shop was not retained.
¶28 BNSF takes the disconcerting position that the video footage would not have been useful even if preserved. In making this argument, BNSF relies on the recolection of three individuals — two of its own employees and one employee of an affiliate — who purportedly “agreed [the video] showed nothing of significance” and was otherwise “not relevant.”
¶29 Our rules define relevant evidence as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” M. R. Evid. 401. We reiterate the importance of relevant evidence within the context of cases involving the spoliation of evidence:
Relevant evidence is critical to the search for the truth. The intentional or negligent destruction or spoliation of evidence cannot be condoned and threatens the very integrity of our judicial system. There can be no truth, fairness, or justice in a civil action where relevant evidence has been destroyed before trial. Historicaly, our judicial system has fostered methods and safeguards to insure that relevant evidence is preserved. Ultimately, the responsibility rests with both the trial and appellate courts to insure that the parties to the Itigation have a fair opportunity to present their claims or defenses.
Oliver, ¶ 31.
¶30 We reject the notion that BNSF is entitled to unilateraly determine which evidence is relevant or valuable when investigating an aleged work-related accident preceding litigation. Such a decision must be left to the trial court. See State v. Gai, 2012 MT 235, ¶ 15, 366 Mont. 408, 288 P.3d 164 (“the trial judge is tasked with determining admissibilty of evidence”) (citing M. R. Evid. 104); Preston v. Mont. Eighteenth Judicial Dist. Court, 282 Mont. 200, 208, 936 P.2d 814, 819 (1997) (“discovery requests are to be construed broadly in favor of disclosing any information tending to lead to admissible evidence. Whether that evidence is admissible is for the court to decide at trial, not for [the party] to determine at the discovery stage of proceedings”); see also Patton v. Wal-Mart Stores, Inc., 2013 U.S. Dist. LEXIS 165617, *14 (D. Nev. Nov. 20, 2013) (“[wjhether ‘nothing’ or ‘something’ was caught on film is an evidentiary question of relevance” for the court). Interestingly, BNSF chose to collect and secure Spotted Horse’s hard hat even though McLeod determined the hard hat (like the video footage) had “no evidence of a significant impact” and “nothing that show[ed] [him] there was anything that happened to it.”
¶31 The fact that the video footage was destroyed prior to the submission of Spotted Horse’s claim affords BNSF no relief. As its internal policies contemplate, BNSF clearly had the means to collect the video footage by simply sending an email or making a telephone call as it has routinely done for other investigations involving rule violations and work-place injuries. Whether the spoliation of video footage was a litigation tactic or inadvertent as BNSF claims, BNSF’s conduct has effectively undermined the “search for the truth” of what actually transpired on September 13, 2009. See Oliver, ¶ 31; see also Schuff, ¶ 79 (“ ‘excusable ignorance’ defense cannot be looked upon with anything less than disfavor”).
¶32 Even if we were to accept BNSFs contention that the one video camera did not capture Spotted Horse’s alleged injury, the recordings from this video camera and others positioned throughout the Diesel Shop could have revealed a wealth of information relating to the alleged injury — a fact BNSF admitted during pre-trial depositions. For example, the video cameras could have captured the exact timeframe and the activity that occurred before or after the alleged injury; whether Spotted Horse and Syverson were carrying particular tools or equipment, including the rope that allegedly slipped through Syverson’s hands; whether Spotted Horse’s mannerisms or gait appeared altered when he walked to the computer terminal to report his injury after it occurred; whether, according to the disputed testimony of BNSF employee Josh Allen, “Spotted Horse drop[ped] down into a sitting position on the locomotive step” after the alleged incident; or, as BNSF employee Larry Lund stated, whether Spotted Horse’s claims were “bogus.” Because this video footage was destroyed, Spotted Horse was left with the impossible task at trial of accurately recreating that which was irretrievably lost.
¶33 An even more insidious result of the destruction of the evidence was the District Court’s pre-trial ruling that precluded BNSF from offering evidence that the cameras showed no accident, unless Spotted Horse opened the door by informing the jury that the videos had been destroyed. Under the court’s ruling, once Spotted Horse informed the jury about the destruction of the video evidence, BNSF was then free to tell the jury that it had observed the video footage and that it did not show that an accident had occurred. In other words, BNSF was allowed to enjoy the benefit of its destruction of the evidence by implying to the jury that Spotted Horse’s irgury never happened. Thus, BNSF’s conduct effectively derailed Spotted Horse’s right to have “a fair opportunity to present [his] claims or defenses.” Oliver, ¶ 31.
¶34 In seeking reversal and a default judgment, Spotted Horse relies in part on Peschel v. City of Missoula, 664 F. Supp. 2d 1137 (D. Mont. 2009), a case concerning the spoliation of a police vehicle video recording of an arrest allegedly performed with “unreasonable force,” which later became the subject matter of a civil suit. The Federal district court had previously determined that the City of Missoula had a duty under Montana law to preserve video recordings throughout the course of the investigation and the disposition of the criminal charge and after acquitted, because the prospect of a civil suit was “reasonably foreseeable.” Peschel, 664 F. Supp. 2d at 1141.
¶35 Countering the plaintiffs request for default judgment, the City of Missoula argued that the loss of video evidence did not prejudice the plaintiff because witnesses were available to testify as to what they observed. Peschel, 664 F. Supp. 2d at 1145. As an alternative, the City proposed prohibiting “the officers from testifying as to what they saw in the video.” Peschel, 664 F. Supp. 2d at 1145 (internal quotation marks omitted). The court found that this “purported sanction would have absolutely no punitive, deterrent, or remedial value” and would otherwise condone “the spoliation of the best evidence available to resolve the factual dispute with the greatest accuracy.” Peschel, 664 F. Supp. 2d at 1145.
¶36 The court in Peschel further concluded that the rebuttable presumption created by an adverse instruction allowing the jury to infer that the video recording would have been unfavorable to the City “would not sufficiently punish the City for its spoliation nor serve as a sufficient disincentive to destroy evidence,” otherwise “pitting the evidence of its officers against the Peschels and the other percipient witnesses — unphased by its spoliation of the video recording.” Peschel, 664 F. Supp. 2d at 1148. Ultimately, the court did not allow evidence regarding the spoliation because doing so “would not enhance, but actually degrade, the truth-finding process.” Peschel, 664 F. Supp. 2d at 1148. The court found that the most appropriate sanction was a conclusive finding that the arresting officers had used unreasonable force. Peschel, 664 F. Supp. 2d at 1145.
¶37 Here, the District Court reasoned that “BNSF should not be allowed to benefit by its failure to preserve the video footage.” We agree. However, the court then undermined its assertion by imposing a sanction that placed Spotted Horse in a ‘lose-lose” position. If Spotted Horse agreed not to tell the jury that BNSF had destroyed the video footage, then BNSF would be precluded from telling the jury what its employees saw on the videos. However, if Spotted Horse told the jury that the videos had been destroyed, then BNSF employees would be free to tell the jury that the claimed injury simply did not show up on any cameras. The ultimate effect of the sanction, as observed in Peschel, did not punish BNSF as the transgressor; rather, it invited BNSF to capitalize on the destruction of the video footage with its inference that Spotted Horse fabricated his injury — a focus that “actually degradetd] the truth-finding process.” See Peschel, 664 F. Supp. 2d at 1148.
¶38 Although the district court instructed the jury to view BNSF’s evidence “with distrust” if it appeared that BNSF “intentionally or recklessly destroyed or concealed evidence favorable to the other party,” as in Peschel, this instruction was an inadequate cure for the prejudice to Spotted Horse.
¶39 Although BNSF clearly knows better than to dispose of video footage of an accident scene, it is simply not possible to determine whether the destruction of the evidence was intentional or inadvertent. Given this circumstance, we do not find that the District Court’s refusal to grant Spotted Horse’s request for a default judgment was an abuse of discretion. However, we do conclude that the District Court abused its discretion when it declined to impose a meaningful sanction on the railroad, and instead fashioned a ruling that ultimately rewarded rather than punished BNSF for its destruction of evidence. Accordingly, we reverse the judgment of the District Court and remand this matter for a new trial, at which time the court shall fashion a sanction that is commensurate with the significance of BNSFs actions in allowing the video footage to be destroyed, and which will satisfy the remedial and deterrent goals of sanctions for the spoliation of evidence. ¶40 Issue 2: Whether the District Court abused its discretion when it instructed the jury as to BNSF’s duty of care in a FELA, action.
¶41 Spotted Horse also contends that the court committed error by giving an improper jury instruction concerning BNSF’s duty of care under FELA. Jury Instruction No. 11 provided:
BNSF was not obligated to eliminate all risks in the work place; it was only obligated to eliminate unreasonable risks.
¶42 We agree that the language in Instruction No. 11 incorrectly states BNSFs duty of care and seemingly contradicts the language found in Jury Instruction No. 10, to which neither party objected and which provided in pertinent part:
Thus, the railroad is negligent if it fails to use reasonable care to provide railroad workers with a reasonably safe place to work. Reasonable care is the care that a reasonably prudent person would use in the conduct of his, her, or its own affairs in order to avoid injury or damage to his, her, or its own person or property as well as the person or property of others. The amount of care or caution required of a reasonably prudent person varies according to the dangers known or reasonably foreseeable to the person. Negligence may consist of action or inaction.
(Emphasis added.)
¶43 We conclude that on remand, Instruction No. 11 shall not be given.
CONCLUSION
¶44 We reverse and remand for further proceedings consistent with this opinion.
CHIEF JUSTICE McGRATH, JUSTICES SHEA, BAKER and RICE concur.
In the Havre Diesel Shop, BNSF dealt with two brands of locomotives, including GE locomotives. Wood, as Senior Site Manager, was responsible for delivering GE locomotives to BNSF.
During his deposition on February 28,2012, McLeod stated that the Diesel Shop had 17 operating video cameras. The record is unclear, however, as to how many video cameras were in operation on the date of Spotted Horse’s alleged incident.
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JUSTICE SHEA
delivered the Opinion of the Court.
¶1 Timothy C. Martin appeals from the order of the Thirteenth Judicial District Court, Yellowstone County, denying his motion for judgment as a matter of law, and his motion for a new trial. We affirm in part, reverse in part, and remand for a new trial consistent with this opinion.
¶2 The issues on appeal are as follows:
1. Whether the District Court erred by allowing Martin’s Locomotive Inspection Act claim to be considered by the jury.
2. Whether the District Court abused its discretion by excluding evidence of heated platforms at BNSF’s Whitefish and Essex depots.
3. Whether the District Court abused its discretion by admitting into evidence the specific amount of income Martin made from his non-railroad employment.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 Martin began working as a switchman/brakeman for BNSF on July 12,2004. A few months later, Martin was promoted to conductor after completing the required training and exam. In December 2008, Martin was permanently assigned to work on the conductors’ extra board in Whitefish. The extra board is a list of conductors who fill in on an as-needed basis for absent workers. Conductors on the extra board are guaranteed a daily rate of pay for remaining on the extra board and are paid a higher rate for actual trips made. On January 1,2009, the guaranteed daily rate for conductors on the Whitefish extra board was $199.86; the trip rate was $364.98.
¶4 On January 1,2009, Martin was called into work at 1:05 a.m. at BNSF’s Whitefish yard to work a priority z-train to Havre. At the yard, Martin met up with his co-worker, locomotive engineer Randy Anderson. After completing the required pre-trip paperwork, Martin and Anderson walked across the platform from the crew shanty to the train. Anderson boarded the locomotive before Martin. Before stepping onto the locomotive, Martin observed a small amount of ice and snow on the locomotive steps. As Martin climbed the steps of the locomotive, his foot slipped. Martin asserts that as he fell back towards the platform, his left foot came down on a berm of snow which had accumulated between the platform and the locomotive steps, causing his knee to twist and resulting in a tear of his left anterior cruciate ligament (ACL). Martin’s injury required surgery and physical therapy and prevented performance of his duties as a conductor between January 19,2009, and June 15,2009.
¶5 Before working for BNSF, Martin worked in law enforcement. Martin’s law enforcement experience included working as a sheriffs deputy in Roosevelt County and in undercover drug investigations in Yellowstone County. Martin has a master’s degree in criminal justice administration. From 2006 until 2010, Martin performed law enforcement related consulting work for the Chippewa-Cree Tribe.
¶6 Martin filed suit against BNSF on December 8,2011, under the Federal Employers’ liability Act (FELA), 45 U.S.C. § 51 et seq., alleging negligence. The juiy returned a verdict in favor of BNSF on negligence and strict liability claims for violations of the Locomotive Inspection Act (LIA), 49 U.S.C. § 20701. On November 20, 2013, Martin filed a motion for judgment as a matter of law under M. R. Civ. P. 50, and, in the alternative, a motion for a new trial pursuant to M. R. Civ. P. 59. On January 31, 2014, the District Court filed an order denying Martin’s motion.
¶7 Martin appeals the judgment of the District Court.
STANDARDS OF REVIEW
¶8 We review de novo a district court’s grant or denial of a motion for judgment as a matter of law. When reviewing the grant or denial of a motion for judgment as a matter of law, we apply the same standards as the district court. Weber v. BNSF Ry. Co., 2011 MT 223, ¶ 16, 362 Mont. 53, 261 P.3d 984. Judgment as a matter of law is properly granted only when there is a complete absence of any evidence which would justify submitting an issue to a jury. All such evidence, and any legitimate inferences that might be drawn from the evidence, must be considered in the light most favorable to the party opposing the motion. Weber, ¶ 16 (citing Johnson v. Costco Wholesale, 2007 MT 43, ¶ 13, 336 Mont. 105, 152 P.3d 727).
¶9 The standard of review for discretionary trial court rulings is abuse of discretion. This standard may be applied to post-trial motions, such as motions for a new trial made pursuant to M. R. Civ. P. 59. In re Johnson, 2011 MT 255, ¶ 12, 362 Mont. 236, 262 P.3d 1105.
¶10 “This Court reviews evidentiary rulings for an abuse of discretion. A trial court has broad discretion to determine whether evidence is relevant and admissible. Absent a showing of an abuse of discretion, the trial court’s determination will not be overturned.” Mickelson v. Mont. Rail Link, Inc., 2000 MT 111, ¶ 35,299 Mont. 348,999 P.2d 985. A district court commits an abuse of discretion when it acts arbitrarily without conscientious judgment or exceeds the bounds of reason. If we determine that a district court abused its discretion, we must next determine whether the abuse of discretion constitutes reversible error. No reversible error occurs unless a substantial right of the appellant is affected, nor does reversible error occur unless the evidence in question was of such character as to have affected the outcome of the trial. United Tool Rental, Inc. v. Riverside Contr., Inc., 2011 MT 213, ¶ 10, 361 Mont. 493, 260 P.3d 156.
DISCUSSION
¶11 1. Whether the District Court erred by allowing Martin’s Locomotive Inspection Act claim to be considered by the jury. ¶12 The FELA “renders railroads liable for employees’ injuries or deaths ‘resulting in whole or in part from [carrier] negligence.’ ” CSX Transp., Inc. v. McBride,_U.S._, 131 S. Ct. 2630, 2634 (2011) (quoting 45 U.S.C. § 51). Coupled with the FELA are numerous safety acts, including the LIA (previously the Boiler Inspection Act), and the Safety Appliance Act. Urie v. Thompson, 337 U.S. 163, 189-90, 69 S. Ct. 1018, 1034 (1949). The safety acts do not operate as a separate cause of action themselves, but “supplement^ the Federal Employers’ Liability Act by imposing on interstate railroads ‘an absolute and continuing duty* to provide safe equipment.” Urie, 337 U.S. at 188, 69 S. Ct. at 1034 (citing Lilly v. Grand Trunk W. R.R. Co., 317 U.S. 481, 485, 63 S. Ct. 347, 351 (1943)). Thus, injured railroad employees may seek recovery under the FELA for violations of these safety acts. Weber, ¶ 20 (citing Dallas v. Burlington N., Inc., 212 Mont. 514, 520, 689 P.2d 273, 276 (1984)). A railroad may breach its duty under the LIAnot only by violating the statute itself, 49 U.S.C. § 20701(1), but also by failing to comply with pertinent Federal Railroad Administration (FRA) regulations. McGinn v. Burlington N. R.R. Co., 102 F.3d 295, 299 (7th Cir. 1996). An FRA defect may constitute a violation of the LIA, thus giving rise to strict liability under the LIA.
¶13 To prevail on an LIA claim, a railroad employee must demonstrate both that the LIA has been violated and that the violation caused the employee’s injuries. Weber, ¶ 22. The employee’s burden of proof differs in a FELA case when the claim is premised on a violation of the LIA or an applicable regulation. The FELA requires a showing of negligence, whereas the LIA requires proof of a statutory or regulatory violation. Weber, ¶ 22.
When a plaintiff alleges that a railroad has violated a federal safety statute, the Supreme Court has ‘extended the reach of the principle of negligence per se to cover injuries suffered by employees as a result of their employers’ statutory violations, even if the injuries sustained were not of a type that the relevant statute sought to prevent.’
Weber, ¶ 22 (citing Consol. Rail Corp. v. Gottshall, 512 U.S. 532, 543, 114 S. Ct. 2396, 2404 (1994)). If the employee establishes a violation of the LIA, the negligence requirement of the FELA claim is established as a matter of law. Weber, ¶ 22.
¶14 “The LIA should be liberally construed’ in light of its primary purpose to protect employees and require the use of safe equipment.” Weber, ¶ 21 (citing Lilly, 317 U.S. at 486, 63 S. Ct. at 351). The LIA states in pertinent part that “[a] railroad carrier may use or allow to be used a locomotive or tender on its railroad line only when the locomotive or tender and its parts and appurtenances... are in proper condition and safe to operate without unnecessaxy danger of personal injury.” 49 U.S.C. § 20701(1). The applicable safety regulation at issue in this case requires that “[flloors of cabs, passageways, and compartments shall be kept free from oil, water, waste or any obstruction that creates a slipping, tripping or fire hazard.” 49 C.F.R. § 229.119(c).
¶15 Martin argues that because he proved the presence of ice and snow on the steps of the BNSF locomotive, which he argues is a slipping hazard and a violation of 49 C.F.R. § 229.119(c), BNSF is liable under the LIA as a matter of law. BNSF argues that whether ice and snow was a violation of 49 C.F.R. § 229.119(c) was a proper question for the jury, citing Gregory v. Mo. Pac. R.R., 32 F.3d 160 (5th Cir. 1994). In Gregory, there was conflicting testimony regarding the presence and amount of oil on a locomotive floor. The Fifth Circuit held that whether or not the oil constituted a slipping hazard was a question of fact, and therefore a question for the jury. Gregory, 32 F.3d at 162-63.
¶16 It is axiomatic that if, in fact, Martin slipped on the ice and snow on the locomotive steps, then the ice and snow were a slipping hazard. However, even assuming Martin established, as he contends, the presence of the ice and snow on the locomotive steps, he did not conclusively establish that the ice and snow caused him to slip. Evidence was presented to the jxuy that the snow and ice on the locomotive steps did not cause Martin to slip. Martin himself testified at trial that he observed only “a little bit” of ice and snow on the steps, and he did not know if it contributed to him slipping on the steps. Martin’s attorney conceded at trial that there was conflicting evidence about ice and snow on the locomotive steps, and that it was a proper jxuy question. Viewed in a light most favorable to BNSF, evidence existed to support the jury’s determination that BNSF was not liable for Martin’s injury due to the presence of ice and snow on the locomotive’s steps. The District Court did not err by allowing Martin’s LIA claim to be considered by the jury.
¶17 2. Whether the District Court abused its discretion by excluding evidence of heated platforms at BNSFs Whitefish and Essex depots.
¶18 At the time of Martin’s injury, the Whitefish platform was not heated. After Martin’s injury, Amtrak used federal stimulus money to install a heated platform at Whitefish. BNSF filed a motion in limine requesting the District Court exclude evidence that the Whitefish platform is now heated, arguing it was inadmissible as a subsequent remedial measure. The District Court granted BNSF’s motion in limine.
¶19 “When, after an injury or harm allegedly caused by an event, measures are taken that, if taken previously, would have made the injury or harm less likely to occur, evidence of the subsequent measures is not admissible to prove negligence [or] culpable conduct.” M. R. Evid. 407.
¶20 Martin argues that because the heated platform at Whitefish was installed by Amtrak, M. R. Evid. 407 does not apply, citing Stevens v. Novartis Pharms. Corp., 2010 MT 282,358 Mont. 474, 247 P.3d 244. In Stevens, we held: “M. R. Evid. 407 does not prohibit evidence of subsequent remedial measures taken by non-parties.” Stevens, ¶ 93. In response, BNSF neither substantively addresses nor attempts to distinguish Stevens other than to argue that Stevens “is a different situation” because, in the present case: “[T]he platform in question was BNSF’s platform on BNSF’s property used by BNSF’s employees (the other end of the platform was used by Amtrak).” Assuming for the sake of argument that this contention was sufficient to distinguish our holding in Stevens from this case, BNSF fails to cite to anything in the record in support of its contention. The only evidence in the record regarding ownership of the platform to which we are cited is the representations of BNSFs attorneys during arguments on this motion in limine, in which they represented to the District Court: “tilt’s an AmTrak [sic] platform” and “[I]t was AmTrak [sic] platforms, federal money. AmTrak [sic] was the reason that they got — that they [installed the heated platform].”
¶21 Moreover, irrespective of the ownership of the platform, there does not seem to be any dispute in the record that the act of installing the heated platform at Whitefish was taken by Amtrak and not BNSF. Therefore, if in fact this did constitute a subsequent remedial measure, it was nevertheless a measure taken by a non-party — Amtrak. As Martin correctly noted, we have previously held that “M. R. Evid. 407 does not prohibit evidence of subsequent remedial measures taken by non-parties.” Stevens, ¶ 93. The District Court’s exclusion of evidence of the heated platform at Whitefish as a subsequent remedial measure, therefore, was in error. Because we remand for a new trial on Issue Three, we need not determine whether the exclusion of this evidence prejudiced Martin.
¶22 Martin next argues that the District Court erred when it excluded evidence of the heated platform at the BNSF yard in Essex. The heated platform at Essex would not constitute a subsequent remedial measure because it was already installed at the time of Martin’s injury. Martin argues on appeal that evidence of the Essex platform was admissible to show feasibility of such measures and for impeachment. BNSF responds that the District Court properly excluded evidence of the Essex platform as irrelevant. BNSF further argues that notwithstanding the District Court’s exclusion of this evidence, it advised Martin’s attorney that he was allowed to engage in “fairly rough” cross-examination of BNSFs witnesses on the feasibility of heated platforms, which Martin chose not to do. BNSF therefore argues: “Any error created by the District Court in not allowing evidence of the heated platforms is harmless where, as here, the Court provided Martin an alternate method of gamering the information, and he simply chose not to pursue it.” We agree.
¶23 As it pertains to the Essex platform, we cannot fault the District Court for declining to prospectively rule that evidence of the heated platform at Essex was relevant before it could even assess the context in which the evidence might be offered. As BNSF correctly notes, when addressing the scope of Martin’s cross-examination on the issue of heated platforms, the District Court specifically advised Martin’s counsel that if may be proper grounds for cross-examination to ask “[Cjouldn’t you shovel better? Couldn’t you use salt? Couldn’t you put in a heated platform?(Emphasis added.) The District Court concluded: “Maybe there’s a point where you can’t take it any further, but I kind of let cross-examination be fairly rough.” Although Martin’s attorney conceded that the District Court’s ruling was “fair,” Martin did not engage in any cross-examination of BNSFs witnesses regarding heated platforms. Thus, he did not afford the District Court the opportunity to assess whether he had reached the point where he could not “take it any further.” Martin argued evidence of the heated platform at Essex was admissible to show the feasibiliiy of a heated platform being installed at Whitefish at the time of his injury. The District Court’s ruling recognized that such evidence would only become relevant once BNSF contended such a measure was not feasible. This was the specific line of inquiry the District Court allowed Martin to pursue and which he chose not to do. Under these circumstances, the District Court did not abuse its discretion.
¶24 3. Whether the District Court abused its discretion by admitting into evidence the specific amount of income Martin made from his non-railroad employment.
¶25 Before trial, Martin filed a motion in limine requesting the District Court exclude any references to his outside consulting employment and “[a]ny reference to monies earned by Martin as a consultant with Tim Martin Law Enforcement.” The District Court denied Martin’s motion in limine on this issue.
¶26 Martin argues that the District Court erred by admitting the specific amounts he earned from his non-railroad employment, when the proper measure of his economic loss was what he was earning at BNSF on the date of his injury, citing Adskim v. Or-Wash. R.R. & Nav. Co., 294 P. 605, 610 (Or. 1930) (in an FELA case, the wages plaintiff was receiving at the time of injury is the proper basis upon which to measure the amount of damages he was entitled to recover as lost wages). Martin also argues that he was unfairly prejudiced by the disclosure of the income he made from his consulting business.
¶27 BNSF argues that evidence of Martin’s non-railroad employment was admissible for two reasons: (1) Martin could not have made himself available to work on a train every day while simultaneously working 40 hours per week elsewhere; and (2) Martin had no motivation to make himself available to work every day of the week because he was earning $80,000 to $90,000 per year in his other job. To the extent that there may have been error, BNSF argues that any error was harmless because the evidence of Martin’s non-railroad employment went only to damages and, since the jury did not find BNSF liable for Martin’s injuries, damages were not an issue.
¶28 To the extent that the demands on Martin’s time from his non-railroad employment may have restricted his availability to work the conductors’ extra board, evidence of this nature was admissible. Indeed, in his counsel's colloquy with the District Court on this issue, Martin’s attorney conceded: “If they want to ask him, were you working outside, that’s fine. But to bring up the dollar amount he’s making out there? There’s no reason that has to come in.” Although acknowledging that the evidence of Martin’s non-railroad income was “very prejudicial,” the District Court nevertheless concluded that it was admissible to provide context for the jury.
¶29 Assuming for the sake of argument that Martin’s non-railroad income during the time he was off injured had some limited probative value, BNSFs use of this evidence at trial went far beyond this theoretically limited value. BNSF and Martin stipulated at trial that he was unable to physically perform his railroad duties from January 19,2009 to June 15,2009. Yet during trial, BNSF repeatedly brought up Martin’s outside consulting business and the wages he earned from that business — not just during the months in 2009 when Martin was off injured — but also for the years 2006, 2007, 2008, all of 2009, including the months Martin was not off injured, and 2010. In his opening statement, BNSFs counsel told the jury that, from his consultingbusiness, Martin earned approximately $84,000in2008 (the year before his injury), that he earned almost $90,000 (it was actually $84,060) in 2009 (the year of his injury), and that he earned almost $90,000 in 2010 (the year after his injury). During trial, over Martin’s objections, BNSF introduced invoices that Martin submitted to the Chippewa-Cree Tribe both for his hours worked and his expense reimbursements. The BNSF also introduced, over Martin’s objections, Schedule C from Martin’s 2008,2009, and 2010 tax returns. In closing argument, BNSFs counsel argued to the jury:
I’m not faulting him for having a job that pays him 80 to 90 thousand dollars. But there was no motivation for him to work as heavily as he claims.
¶30 We have previously held that the introduction into evidence of outside sources of income for the purpose of suggesting to the jury that a plaintiff had a motive for not working was so prejudicial as to require reversal. Mydlarz v. Palmer/Duncan Constr. Co., 209 Mont. 325, 682 P.2d 695 (1984); Mickelson v. Mont. Rail Link, 2000 MT 111, 299 Mont. 348, 999 P.2d 985. Although Mydlarz and Mickelson both involved the plaintiffs receipt of workers’ compensation benefits, we cannot reconcile disallowing evidence of wage replacement benefits being offered to show a lack of motivation to work — as we have consistently done in the past — with allowing evidence of wages from separate employment being offered to show a lack of motivation to work, as was done in this case.
¶31 BNSF argues that cases such as Mydlarz and Mickelson are inapposite to the case before us because they involved collateral source payments as opposed to earnings from separate employment. In seeking to distinguish these cases, BNSF contends: “The exclusion of collateral source benefits at trial serves the purpose of encouraging individuals to purchase and maintain liability insurance by eliminating the prejudicial impact of such evidence.” This statement illustrates the infirmity ofBNSF’s argument that Martin’s non-railroad income was admissible. Certainly, encouraging individuals to seek and maintain gain-fill employment serves as important a purpose as encouraging them to draw on a collateral source benefit such as workers’ compensation. It makes little sense, then, that we would exclude evidence of the latter because of its prejudicial impact, but allow evidence of the former.
¶32 M. R. Evid. 403 provides in pertinent part: “Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice.” “Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable.” M. R. Evid. 401. It is questionable whether evidence of the amount of money Martin earned at his non-railroad employment — much less the amount he was reimbursed for his expenses — during extended time periods both before and after his irquiy, would have any tendency to make the existence of his wage loss during a discrete five month period in 2009 any more or less probable. Even if we were to assume some relevancy to such evidence, however, as the District Court recognized, this evidence was “very prejudicial.” For similar considerations that we disallowed such evidence in Mydlarz and Mickelson, we conclude it was error to admit it in this case.
¶33 Regarding BNSFs argument that the error was harmless because the jury found BNSF was not hable, we rejected this same argument in Mickelson, in which we recognized “that such evidence can have an impact upon a jury’s verdict on the issue of liability, as well as damages.” Mickelson, ¶ 46. We have held: “The test of prejudicial error requiring reversal is whether there is a reasonable possibility the inadmissible evidence might have contributed to the verdict.” Boude v. Union Pac. R.R. Co., 2012 MT 98, ¶ 21, 365 Mont. 32, 277 P.3d 1221 (quoting Pacificorp v. Dep’t. of Revenue, 254 Mont. 387, 398, 838 P.2d 914, 920 (1992)). In this case, much ofBNSF’s argument to the jury was essentially that, irrespective of his injury, Martin suffered no damage because he had substantial outside income. We cannot say there is not a reasonable possibility the inadmissible evidence of Martin’s non-railroad income contributed to the verdict.
CONCLUSION
¶34 The District Court did not err by allowing the issue of whether the BNSF violated the LIA to go to the jury. The District Court erred by excluding evidence of the installation of the heated platform at Whitefish as a subsequent remedial measure. The District Court did not err by excluding evidence of the heated platform at Essex. The District Court erred by allowing any evidence of Martin’s income and expense reimbursements from his non-railroad employment. This error was not harmless.
¶35 Affirmed in part, reversed in part, and remanded for a new trial consistent with this opinion.
CHIEF JUSTICE McGRATH, JUSTICES COTTER and BAKER concur.
Martin and the District Court refer to his motion as a “Motion Notwithstanding the Verdict.” Martin made his motion pursuant to M. R. Civ. P. 60, which references a “Motion for Judgment as a Matter of Law.” We therefore refer to Martin’s motion as such in this opinion.
Although BNSF states in its brief on appeal that “BNSF took part in the construction of its end of the platform,” BNSF again fails to cite any portion of the record in support of this statement. M. R. App. F. 12(l)(f) requires that when presenting an argument, the parties must cite to “the authorities, statutes, and pageB of the record relied on.”
Martin argues in his reply brief that neither of the two witnesses BNSF called in its case-in-chief could have testified about BNSF’s snow removal policies because that was not their area of responsibility. Martin contends that BNSF’s decision to not call the witness who could testify about snow removal policies precluded any cross-examination on the subject. Because Martin did not ask either of BNSF’s witnesses any questions about snow removal policies, however, we can only speculate that they would have testified that they had no knowledge on the subject.
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court.
¶1 A jury convicted Richard Curtis Pingree (Pingree) of Assault with a Weapon and Partner or Family Member Assault. At the trial, Pingree’s ex-wife, Caroline, did not testify and the District Court admitted a number of hearsay statements she made prior to trial.
¶2 The sole issue on appeal is whether Fingree’s confrontation rights were violated when prior testimony from a civil order of protection hearing was read at his criminal trial. We reverse.
BACKGROUND
¶3 On September 11, 2012, the Ravalli County Attorney filed an information charging Pingree with felony Assault with a Weapon, in violation of § 45-5-213, MCA, and misdemeanor Partner or Family Member Assault, in violation of § 45-5-206, MCA. The State alleged that Pingree pointed a gun at his wife and fired it to the left of her head.
¶4 On October 5,2012, Caroline Pingree, the alleged victim, sought an order of protection in Butte-Silver Bow County, where the parties’ dissolution had been filed. Pingree was present at the hearing, although without counsel. He testified, but did not contest the order. Pingree did not cross-examine Caroline.
¶5 Subsequently, Pingree pled not guilty to the criminal charges and the case went to a jury trial. Pingree maintained that he did not intend to shoot at Caroline; rather, his finger slipped when loading the weapon. Although the State subpoenaed Caroline, she was not served and did not appear at trial. Instead, the prosecutor introduced portions of a transcript from the civil order of protection hearing, at which Caroline testified to violence by Pingree. The actual transcript was not entered as an exhibit; rather, it was read into evidence in question and answer form.
¶6 The District Court admitted the prior testimony over the objection of defense counsel. The court held that Caroline’s hearsay statements from the order of protection hearingwere admissible under M. R. Evid. 804(bXD(B). The District Court noted that Caroline’s statements were made under oath and Pingree was advised of his right to cross-examine Caroline by the court, but declined the opportunity to do so. The District Court reasoned that the confrontation clause requires only that the defendant have the opportunity to cross-examine, not that he actually do so, and that representation by counsel is not a requirement for admissibility.
¶7 While deliberating, the jury sent a request to the District Court asking to review the transcript of the order of protection hearing. Judge Langton denied the request and provided a supplementary instruction that read, in part: “It would be improper for me to provide you a complete transcript of the Butte hearing as it would tend to give undue emphasis to that testimony. If there is a specific point of topic from that hearing transcript that you request you may inform me of that and I will consider it.”
¶8 On March 6, 2013, the juiy found Pingree guilty of the charged offenses. Judge Langton sentenced him to the Department of Corrections for a period of fifteen years, with ten years suspended, on the Assault with a Weapon charge, and six months, with five months suspended, on the Partner or Family Member Assault charge (to run concurrently). Pingree now appeals.
STANDARD OF REVIEW
¶9 This court reviews a district court’s evidentiary decisions for abuse of discretion. State v. Mizenko, 2006 MT 11, ¶ 8, 330 Mont. 299, 127 P.3d 458. We review a district court’s conclusions of law and interpretations of the Constitution or the rules of evidence de novo. Mizenko, ¶ 8.
DISCUSSION
¶10 Issue: Whether Pingree’s confrontation rights were violated when prior testimony from a civil order of protection hearing was read at his criminal trial.
¶11 The State maintains that Pingree waived his M. R. Evid. 804(b)(1)(B) argument in the District Court. Additionally, the State asserts that Pingree waived any argument based on the Montana Constitution by failing to raise it below. Pingree asserts that he raised the M. R. Evid. 804 and confrontation issues, and the District Court considered them.
¶12 On the morning of the trial, the State indicated it intended to introduce Caroline’s testimony from the order of protection hearing. Pingree objected on the basis of the “Sixth Amendment right to confront the witness, confrontation clause, Crawford [referring to Crawford v. Washington, 541 U.S. 36, 124 S. Ct. 1354 (2004)], as well as ... the right to personally face your accuser.” The District Court clearly considered the hearsay issue and ruled that the prior testimony was admissible under both Crawford and M. R. Evid. 804(b)(1)(B). Pingree’s objection was clear and sufficient to preserve the issue on appeal.
¶ 13 The United States Constitution provides that criminal defendants “enjoy the right... to be confronted with the witnesses against him.” U.S. Const, amend. VI. Similarly, the Montana Constitution provides that “in all criminal prosecutions the accused shall have the right... to meet the witnesses against him face to face” Mont. Const, art. II, § 24. We have previously held that Montana’s Confrontation Clause provides greater protection than the Sixth Amendment of the United States Constitution. State v. Clark, 1998 MT 221, ¶¶ 20-25, 290 Mont. 479, 964 P.2d 766. These protections prohibit the State’s use of hearsay statements except in certain circumstances. Mizenko, ¶ 10.
¶14 “Hearsay is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” M. R. Evid. 801(c); State v. Sanchez, 2008 MT 27, ¶ 17, 341 Mont. 240, 177 P.3d 444. Generally, hearsay is inadmissible unless specifically excluded by statute, the rules of evidence, or other court rules. M. R. Evid. 802; Sanchez, ¶ 17. M. R. Evid. 804 provides hearsay exceptions applicable when the declarant is unavailable.
¶15 In a criminal case, former testimony given as a witness at another hearing, although hearsay, is admissible “if the party against whom the testimony is now offered had an opportunity and similar motive to develop the testimony by direct, cross, and redirect examination.” M. R. Evid. 804(b)(1)(B). In other words, before a prosecutor may introduce the former testimony of a now-unavailable witness, the defendant must have had, at the time testimony was given: (1) an opportunity to examine the declarant, and (2) a similar motive to develop the declarant’s testimony. M. R. Evid. 804(b)(1)(B). The standard for admitting this evidence is whether the objecting party had the same motive to conduct the examination as he would at trial if the witness were available at that time. State v. Homer, 2014 MT 57, ¶ 9, 374 Mont. 157, 321 P.3d 77.
¶16 Cross-examination is essential to the adversary system. Mizenko, ¶ 13. Cross-examination “tests the witness’s testimony in the most rigorous, demanding, and exacting” manner and has the potential to expose “flaws, inconsistencies, and insidious motives.” Mizenko, ¶ 13. We agree with the State that Pingree’s right to cross-examine Caroline was satisfied. The court presiding over the order of protection hearing advised Pingree of his right to cross-examine Caroline, but Pingree declined the opportunity. Although he was acting as his own attorney, he nonetheless had the opportunity to cross-examine Caroline and we conclude that M. R. Evid. 804(b)(l)(B)’s requirement that the individual have an opportunity to cross examine the declarant is satisfied.
¶17 However, the second prong of M. R. Evid. 804(b)(lXB), requiring a similar motive, was not satisfied in this case. It is clear that the motives underlying the two cases were vastly different. An order of protection hearing is a civil proceeding. A protective order serves to prevent further conflict between the parties. Certainly, a respondent may face criminal consequences for violating an order of protection (see § 45-5-626, MCA), but simply being named as respondent does not expose a respondent to criminal liability. Here, Pingree conceded the issue and agreed to the imposition of the protective order against him.
¶18 Conversely, a criminal case implicates a much higher risk for a defendant. The charges carry serious criminal penalties if a defendant is found guilty. A criminal conviction affects one’s liberty in the most fundamental way and thus, a defendant is entitled to legal representation. Pingree risked maximum sentences of twenty years and $50,000 in fines for the Assault with a Weapon charge and one year and $1,000 in fines for the misdemeanor Partner or Family Member Assault charge. Sections 45-5-213(2)(a), -206(3)(a)(i), MCA. The consequences of a criminal prosecution provide a very different motivation for cross-examination.
¶19 Pingreedidnothaveasimilarmotivefordevelopingtestimony via cross-examination of Caroline at both hearings. As discussed above, the punitive nature of criminal proceedings critically differs from a civil order of protection hearing. Notably, Pingree agreed to the imposition of the protective order against him, whereas he strongly maintained his innocence at the criminal trial. Therefore, we conclude that the District Court erred when it found that Caroline’s statements satisfied the requirements of M. R. Evid. 804(b)(1)(B).
¶20 The State further asserts that the admission of Caroline’s prior testimony was harmless. Trial errors are subject to harmless error review, using a “cumulative evidence” test to assess whether the district court’s error was indeed harmless. State v. Van Kirk, 2001 MT 184, ¶¶ 40, 43, 306 Mont. 215, 32 P.3d 735. The State must demonstrate that the jury was presented with admissible evidence that proved the same facts as the tainted evidence and, qualitatively, the tainted evidence would not have contributed to the conviction. Van Kirk, ¶ 47. The cumulative evidence test “focuses on the qualitative impact the inadmissible evidence may have on the fact-finder.” Sanchez, ¶ 22. This inquiry is not simply whether other untainted evidence established the necessary elements of the crime. Instead, the harmless error analysis also requires us to ask whether the tainted evidence had a substantive impact on the jury’s decision to convict.
¶21 The primary issue in the criminal trial was Pingree’s intent, i.e., whether he intended to point and fire the gun or whether the gun discharged accidentally. The State claims that Caroline’s testimony at the order of protection hearing was simply cumulative of other evidence admitted at the trial without objection, including the 911 call and the officers’ testimony. We disagree.
¶22 Here, the introduction of Caroline’s prior testimony cedis into question the fundamental fairness of the proceeding. The State has failed to demonstrate that the facts admitted through Caroline’s prior testimony did not have a substantive impact on the jury’s verdict.
¶23 We acknowledge the many challenges presented in prosecuting intimate partner crime. Research suggests that the vast majority, between 80 to 85 percent, of abused women recant at some point. Tom Lininger, Prosecuting Batterers After Crawford, 91 Va. L. Rev. 747,768 (2005). However, evidence-based approaches to domestic violence prosecution are available to pursue these crimes. For example, in State v. Finley, we concluded that the victim’s testimony is not necessary when there is additional evidence supporting the required elements beyond a reasonable doubt. State v. Finley, 2011 MT 89, ¶ 31, 360 Mont. 173, 252 P.3d 199. In Finley, we reaffirmed our prior holding that the elements of a criminal offense do not require direct evidence and can be established through circumstantial evidence alone. Finley, ¶ 29 (citations omitted). In that case, the victim placed a frantic call to 911, which was later admitted into evidence at the trial. Finley, ¶ 30. The 911 recording demonstrated the victim’s fear and terror as the dispatcher tried to coax her out of the gas station where she was hiding. Finley, ¶ 5. Moreover, we found additional supporting evidence from the testimony of the responding police officers, who noted the victim’s distraught demeanor and appearance and confirmed the damage to the house caused during the assault. Finley, ¶ 30.
¶24 Here, while not sufficient to establish harmless error, the State may have had sufficient evidence to pursue the prosecution without using Caroline’s statements from the prior hearing. The State introduced the 20-minute 911 call, wherein Caroline stated: “My husband just fired a gun at me.” The juiy could hear Caroline raying on the call, clearly upset. The 911 dispatcher testified that Caroline was frightened and locked herself in the bathroom until officers arrived at the home. Caroline told the dispatcher that Pingree had instructed her to “tell us that he had shot into the floor, because he was going to be in big trouble.”
¶25 Further, testimony from law enforcement provided other corroborative evidence. Deputy Colgan discussed Caroline's scared demeanor when officers arrived at the home. Detective Jessop testified to finding the gun at the bottom of the ravine with the gun’s chamber empty. According to Detective Jessop, the empty chamber suggests that someone removed the casings before throwing the gun to prevent matching the gun to the bullet. Trajectory analysis conducted by Deputy Cashell provided evidence of the bullet’s entay into the couch at a close proximity and steep angle, consistent with Pingree standing over Caroline. Finally, Montana Crime Laboratory forensic scientist Lynette Lancon testified to the unlikelihood that either firearm could have discharged accidentally and that the safety function on both guns was functioning correctly.
¶26 Moreover, Pingree’s own testimony tended to cast him as not credible. Pingree testified that he told law enforcement officer Marshall Rose where he threw the gun. The State called Marshall Rose as a rebuttal witness and he denied that Pingree ever told him where to find the gun.
¶27 We are unable to conclude that the admission of Caroline’s hearsay statements was harmless. The primary issue at Pingree’s criminal trial was his intent; that is, whether he intended to shoot the gun at Caroline or whether the gun discharged accidentally. Caroline’s hearsay statements, such as “he walked out and pointed a gun at me and fired ... and then he laughed,” directly contradicted Pingree’s defense. Additionally, the hearsay statements included references to Pingree grabbing the phone out of Caroline’s hand and throwing it out the front door, not allowing Caroline to visit her family in Butte, and past violent incidents between the couple (“It was not like a volatile fight or anything, like we’d been known to have in the past.”). Moreover, the jury’s request to examine the order of protection transcript while deliberating suggests that they placed considerable emphasis on the hearsay statements. While the dissent contends that the prior statement was not “more compelling or deserving of greater evidentiary weight” than the recording of the 911 call (citing State v. McOmber, 2007 MT 340, ¶ 35, 340 Mont. 262, 173 P.3d 690), it was a statement given under oath in a court of law and we cannot say that the testimony did not have a substantive impact on the jury. The record suggests that the statements had a qualitative effect on the jury’s decision to convict Pingree and are thus not harmless.
¶28 In conclusion, Caroline’s testimony at the order of protection hearing is hearsay. Montana Rule of Evidence 804requires that before former testimony of a now unavailable witness may be admitted in a criminal case, the party against whom the testimony is offered must have had an opportunity and similar motive to probe the witness’ testimony through cross examination. We conclude that under the facts of this case, Pingree did not have a similar motive to develop Caroline’s testimony at the order of protection hearing. We further conclude that the State has failed to carry its burden to establish that the tainted evidence was harmless.
¶29 Reversed.
JUSTICES COTTER, McKINNON and WHEAT concur.
The Office of the Public Defender represented Pingree in his criminal case. His criminal defense attorney entered a notice of appearance on September 13, 2012.
Although it was clear throughout the pretrial proceedings that Caroline had not been served with a subpoena, the record does not indicate that any efforts were made by the State to obtain an arrest warrant for her as a material witness and take her deposition pursuant to § 46-15-201(3), MCA.
Both parties stipulated to Caroline’s unavailability for purposes of M. B. Evid. 804.
The prosecution was unable to prove conclusively which of two firearms present at the scene actually shot the bullet.
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 The Montana Public Service Commission (the Commission) and Northwestern Energy appeal a Fifth Judicial District Court decision reversing the Commission’s determination that Whitehall Wind, LLC (Whitehall) did not incur a legally enforceable obligation during contract negotiations with Northwestern for the sale and purchase of electric energy generated by a proposed wind facility. On appeal, we address whether the District Court erred in reversing the Commission’s determination that Whitehall had not established a legally enforceable obligation to deliver energy to Northwestern. We reverse.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 In 1978, Congress enacted Section 210 of the Public Utility Regulatory Policies Act (PUKPA) to encourage cogeneration and small power production. 16 U.S.C. §824a-3(a).PXJRPArequires large electric utilities to purchase available energy from “qualifying cogeneration facilities and qualifying small power facilities.” 16 U.S.C. § 824a-3(a). Under Federal Energy Regulatory Commission (FERC) regulations, a “qualifying facility” may provide energy, capacity, or both to a utility pursuant to a contract or a “legally enforceable obligation.” 18 C.F.R. § 292.304(d). In 1981, the Montana Legislature enacted §§ 69-3-601 through -604, MCA, to facilitate the Commission’s implementation of PXJRPA. Section 69-3-603, MCA, requires the Commission to set rates and conditions “if a qualifying small power production facility and a utility are unable to mutually agree to a contract for the sale of electricity.”
¶3 Whitehall is a qualifying facility. Northwestern is a public utility operating in Montana and subject to the Commission’s jurisdiction. In the summer of2002, Whitehall contacted Northwestern and attempted to negotiate a contract to sell energy from a proposed fifty-megawatt wind-generating facility near Whitehall, Montana. In August 2002, after Whitehall and Northwestern were unable to reach an agreement, Whitehall petitioned the Commission to set a long-term avoided cost rate for electricity that Whitehall proposed to generate and sell to Northwestern. On January 2, 2003, after the parties conducted discovery and the Commission held a public hearing, the Commission issued an order setting a short-term rate of $0.010639 per kilowatt hour. On January 31, Whitehall petitioned the District Court for judicial review of that order, seeking an order for the Commission to set a long-term contract rate.
¶4 On December 22, 2008, the District Court issued an order reversing and remanding the Commission’s decision. The court held that the Commission’s rate unreasonably relied on stale data and directed the Commission to determine whether Whitehall had established a legally enforceable obligation. The Commission and Northwestern appealed the District Court’s decision to this Court, and we affirmed. Whitehall Wind, LLC v. Mont. PSC, 2010 MT 2, 355 Mont. 15, 223 P.3d 907.
¶5 On June 4, 2010, the Commission issued an Order on Remand, concluding that Whitehall had not incurred a legally enforceable obligation. The Commission determined that “the touchstone of a legally enforceable obligation ... is an absolute, unconditional commitment to deliver energy, capacity, or energy and capacity.” Examining the totality of the circumstances, the Commission found that Whitehall failed to demonstrate an unconditional commitment. The Commission further concluded that Whitehall’s attempted negotiations with Northwestern merely constituted an effort to seek information to ascertain the viability of its proposed project.
¶6 Whitehall petitioned for judicial review of the Commission’s order. On May 21, 2014, the District Court issued an order reversing and remanding the Commission’s decision. The court determined that NorthWestem’s refusal to negotiate created a legally enforceable obligation entitling Whitehall to a long-term avoided cost rate. The Commission and Northwestern appeal.
STANDARDS OF REVIEW
¶7 Section 2-4-704, MCA, governs the District Court’s review of the Commission’s decision. “The court may not substitute its judgment for that of the agency” in weighing factual evidence. Section 2-4-704(2), MCA. The court may reverse or modify an agency’s decision if “substantial rights” of the appellant have been prejudiced because, among other factors, the agency’s decision exceeds its statutory authority, is affected by legal error, or is clearly erroneous in light of the record. Sections 2-4-704(2)(a)(ii), (iv), and (v), MCA.
¶8 We apply the same standards of review that a district court applies, Molnar v. Fox, 2013 MT 132, ¶ 17, 370 Mont. 238, 301 P.3d 824, “and must accordingly determine whether an agency’s findings of fact are clearly erroneous and whether its conclusions of law were correct,” Mont. Solid Waste Contrs. v. Mont. Dep’t of Pub. Serv. Regulation, 2007 MT 154, ¶ 17, 338 Mont. 1, 161 P.3d 837. “A finding of fact is clearly erroneous if it is not supported by substantial evidence in the record, if the fact-finder misapprehended the effect of the evidence, or if a review of the record leaves the court with a definite and firm conviction that a mistake has been made.” Williamson v. Mont. Pub. Serv. Comm’n, 2012 MT 32, ¶ 25, 364 Mont. 128, 272 P.3d 71.
DISCUSSION
¶9 Congress required FERC to prescribe “such rules as it determines necessary to encourage cogeneration and small power production” within one year of PURPA’s enactment, and to revise those rules periodically. 16 U.S.C. § 824a-3(a). Section 210 of PURPA requires electric utilities to purchase electric energy from qualifying facilities. 16U.S.C. § 824a-3(a). FERC interpreted this requirement to mean that a utility must purchase “any energy and capacity which is made available,” either directly or indirectly, from a qualifying facility. 18 C.F.R. § 292.303(a) (emphasis added). FERC regulations provide that a qualifying facility has the option to sell energy as available or pursuant to a legally enforceable obligation. 18 C.F.R. § 292.304(d). If a qualifying facility sells its energy pursuant to a legally enforceable obligation, it may choose a rate based on the avoided costs calculated at the time of delivery or the avoided costs calculated at the time the obligation is incurred. 18 C.F.R. § 292.304(d)(2).
¶10 Though PURPA is a federal law, “[i]t is up to the States, not [FERC], to determine the specific parameters of individual [qualifying facility] power purchase agreements, including the date at which a legally enforceable obligation is incurred under State law.” Metro. Edison Co., 72 F.E.R.C. ¶ 61, 015, ¶ 61, 050 (1995). In its June 2010 order on remand, the Commission noted, “Determining the date at which [a legally enforceable obligation] is incurred requires determining what establishes [a legally enforceable obligation] under state law. This is a matter of first impression for the Commission.” The Commission thoroughly considered each party’s arguments, the language ofthe statutes, and relevant case law from other jurisdictions to conclude:
[TJhe touchstone of a legally enforceable obligation ... is an absolute, unconditional commitment to deliver energy, capacity, or energy and capacity at a future date. Any commitment that is conditional fails to establish [a legally enforceable obligation].
Reviewing the record under this standard, the Commission determined that Whitehall had not incurred a legally enforceable obligation.
¶11 The Commission found support for its conclusion from other jurisdictions, many of which have determined that a qualifying facility establishes a legally enforceable obligation when it cannot abandon a project without incurring a liability- See Rosebud Enters, v. Idaho Pub. Util. Comm’n, 951 P.2d 521, 526 (Idaho 1997) (upholding a public utilities commission’s determination that a qualifying facility did not establish a legally enforceable obligation by merely seeking information in order to assess the viability of a project); A. W. Brown Co. v. Idaho Power Co., 828 P.2d 841, 843 (Idaho 1992) (citing a public utilities commission’s determination that a legally enforceable obligation occurred once “the project was substantially mature to the extent that the developer was ready, willing, and able to sign a contract” and had “actively negotiated for a contract which, but for the reluctance of the utility, would have been executed”); Appeal of Pub. Serv. Co., 539A.2d 275, 280-81 (N.H. 1988) (upholding a public utilities commission’s determination that a legally enforceable obligation was created by a timely and eligible rate petition, demonstrating that most developmental problems had been resolved and that the project was viable, accompanied by an interconnection agreement signed by a qualifying facility).
¶12 Relying on this precedent and statutory language, the Commission rejected Whitehall’s argument that Whitehall incurred a legally enforceable obligation based on “its offer of a detailed long-term contract to [Northwestern] in October 2002, its good faith attempt to negotiate that contract with [Northwestern], and its ultimate petition to the Commission and the Commission’s resultant decision.” In rejecting Whitehall’s argument, the Commission determined that cases on which Whitehall relied did not actually support its position. See A.W. Brown, 828 P.2d at 846-47 (upholding a commission’s determination that “a qualifying facility is entitled to receive avoided cost rates if it obligates itself to the delivery of energy or capacity and if that obligation is legally enforceable,” and that “preliminary, tentative, or general” discussions between a facility and a utility did not establish a legally enforceable obligation); Armco Advanced Materials Corp. v. Pa. Pub. Util. Comm’n, 579 A.2d 1337, 1347 (Pa. Commw. 1990) (determining that a qualifying facility incurs a legally enforceable obligation when it “has done everything within its power to create such an obligation, either by tendering a contract to the utility or by petitioning the [public utilities commission] to approve a contract or to compel a purchase,” so that “only an act of acceptance by the utility or an act of approval by the [commission] remains to establish the existence of a ‘contract.’ ”). The Commission determined that the courts in these jurisdictions required a qualifying facility to make a binding commitment before finding that the facility had incurred a legally enforceable obligation.
¶13 In its order, the Commission also announced a prospective bright-line rule: A facility seeking to establish a legally enforceable obligation must “tender an executed power purchase agreement to the utility with a price term consistent with the utility’s avoided costs, with specified beginning and ending dates, and with sufficient guarantees to ensure performance during the term of the contract, and an executed interconnection agreement.” The Commission explicitly declined to apply this bright-line rule retroactively. Instead, for its review of Whitehall’s petition, the Commission examined the “totality of the circumstances to determine if the [qualifying facility] has made an unconditional commitment to deliver energy, capacity!,] or energy and capacity.”
¶14 Several factual findings led the Commission to conclude that Whitehall had not incurred a legally enforceable obligation. The Commission relied on testimony by Whitehall employees indicating that Whitehall intended to use the rate set by the Commission to determine whether Whitehall feasibly could proceed with the project. The Commission found that, of the two contracts that Whitehall submitted to Northwestern, one was unsigned and one was meant to stimulate negotiations rather than to present a firm commitment. Moreover, although Whitehall performed a wind analysis of the proposed site, it had not conducted avian studies or obtained any actual site control. Ultimately, the Commission concluded, “Taken as a whole, the record establishes that [Whitehall] was merely seeking information from which it could make a decision whether or not to proceed. This falls short of establishing [a legally enforceable obligation].”
¶15 The District Court reversed the Commission’s decision, determining that the Commission “ignored the facts and exceeded its statutory authority,” and that its decision was “clearly erroneous.” The court determined that “[s]imply refusing to negotiate” can create a legally enforceable obligation. In reaching this determination, the court relied on FERC’s declaratory orders in Hydrodynamics, Inc., 146 F.E.R.C. ¶ 61, 193 (2014) (concluding that Montana’s requirement that qualifying facilities must participate in competitive solicitation to obtain long-term rates for contracts with utilities violated PURPA); Grouse Creek Wind Park, LLC, 142 F.E.R.C. ¶ 61, 187 (2013) (concluding that an Idaho Public Utilities Commission rule and order were inconsistent with PURPA where, as a prerequisite to obtaining a legally enforceable obligation, the rule required a qualifying facility and a utility to sign a purchase and sale agreement or, alternatively, the order required a qualifying facility to complain “meritoriously” to the commission); Cedar Creek Wind, LLC, 137 F.E.R.C. ¶ 61, 006 (2011) (addressing similar issues as Grouse Creek and reaching the same conclusion); and JD Wind 1, LLC, 129 F.E.R.C. ¶ 61, 148 (2009) (concluding that a Texas law specifying that legally enforceable obligations were available only to sellers of “firm power” was inconsistent with PURPA).
¶16 Each of the FERC orders on which the District Court relied addresses issues different from the issue in this case. In contrast to Hydrodynamics, this case concerns the standard for establishing a legally enforceable obligation when there is no contract, and it does not involve a competitive solicitation requirement. In contrast to Grouse Creek and Cedar Creek, the Commission in this case did not require a signed contract or a formal commission ruling for Whitehall to receive long-term avoided-cost rates. Unlike JD Wind, the Commission did not reject Whitehall’s petition on the ground that it would offer power from intermittent resources rather than firm power. Moreover, in JD Wind, the facility clearly had made a binding commitment because it already was delivering wind energy to the utility when the facility sued to enforce the legally enforceable obligation. JD Wind, ¶ 61,633. By contrast, Whitehall has not begun to build the infrastructure it would need to deliver energy to Northwestern and has not even acquired property rights to the proposed site.
¶17 The Commission did not exceed its statutory authority in concluding that evidence of a utility’s refusal to negotiate, without more, is insufficient to establish that a qualifying facility has committed itself to the proposed project. This conclusion is not affected by an error of law — it is supported by statutory language and by judicial decisions in other jurisdictions. Further, the Commission’s ruling in this case was fact-specific. There is substantial evidence in the record to support the Commission’s finding that Whitehall had not committed itself to the project or established any obligation that could expose it to liability if Whitehall abandoned the proposed project. Although Whitehall conducted some wind tests in the area of the proposed project, it did not conduct avian studies, obtain required permits, or have actual site control over any of the proposed project areas. In essence, Whitehall sought to have the Commission establish a long-term avoided cost rate in order to determine the financial viability of the project before it incurred an obligation to proceed. But, under applicable FERC regulations, the long-term rate is tied to the date a legally enforceable obligation is incurred. Evidence in the record supports the Commission’s determination that Whitehall, while pursuing information, had not obligated itself to Northwestern and therefore had not established a legally enforceable obligation to deliver energy or capacity. Accordingly, the Commission’s findings of fact were not clearly erroneous. Whitehall has failed to demonstrate that its substantial rights were prejudiced for any of the reasons listed in § 2-4-704(2)(a), MCA.
¶18 Because it is not implicated in this appeal, we decline to opine whether the Commission’s bright-line prospective test, announced in its order, complies with PURPA. Additionally, because we reverse the District Court’s decision, we need not address the appellants’ argument that the District Court’s reliance on Hydrodynamics, without allowing the appellants to rebut Whitehall’s characterization of that case, violated their procedural due process rights.
CONCLUSION
¶19 We reverse the District Court’s decision and order and remand for reinstatement of the Commission’s June 4,2010 order.
JUSTICES COTTER, SHEA, McKINNON and RICE concur.
The Commission defines “avoided costs” as “the incremental costs as determined by the commission to an electric utility of electric energy or capacity or both which, but for the purchase from the qualifying facility or qualifying facilities, such utility would generate itself or purchase from another source.” Admin. R. M. 38.5.1901(2Xa).
Because we do not find the FERC rulings dispositive, we do not discuss the parties’ contentions regarding their use as precedent.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Defendant Brent Matthew Passwater (Passwater) appeals from the Judgment and Sentence of the Eleventh Judicial District Court, Flathead County, ordering him to pay restitution to Lynn Boots (Lynn), Bryce Boots (Bryce), and to the Crime Victim Compensation Program in the total amount of $618,816.41. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶2 On July 11, 2012, Passwater failed to yield while making a left turn off of Montana Highway 83 and collided with a motorcycle. Bryce was driving the motorcycle and his wife Lynn was a passenger. Passwater was intoxicated at the time of the accident.
¶3 Lynn and Bryce (collectively the Boots) were hospitalized. Bryce suffered a broken left foot and Lynn’s left leg was amputated below the knee.
¶4 On October 18, 2013, Passwater pleaded guilty to Negligent Vehicular Assault. A sentencing hearing was set for January 2,2014, but was later continued until March 19,2014.
¶5 On December 24, 2013, the State filed its Presentence Investigation (PSI) with the court. The PSI was delivered to Passwater on December 27,2013. The PSI included a victim impact letter and an affidavit from the Boots claiming a total pecuniary loss of $1,427,318.01. A Life Care Plan (the Plan) was submitted with the PSI. The Plan was prepared by Jennifer Crowley (Crowley), a Certified Life Care Planner and RN at Eagleview West Life Care Planning. The Plan proposed $1,278,256.00 as the cost of future care for Lynn as a result of her injury.
¶6 On March 14,2014, Passwater filed an Objection to the PSI. In his Objection, Passwater disputed many of the expenses listed in the Plan, describing them as “speculation,” and deriding the Plan itself as “gibberish.” Passwater instead proposed a restitution amount of $257,200.23.
¶7 A sentencing hearing was held on March 19,2014. At the hearing the Boots testified in support of their proposed restitution amount. Passwater called a longtime amputee who testified about the cost of prosthetics. No other witnesses testified regarding restitution damages.
¶8 On May 12, 2014, the District Court issued a Judgment and Sentence ordering Passwater to pay restitution of $593,828.01 to the Boots and $24,988.40 to the Crime Victim Compensation Program for a total restitution amount of $618,816.41. Passwater timely appealed the court’s judgment.
STANDARDS OF REVIEW
¶9 What constitutes an appropriate measure of restitution is a question of law, which we review for correctness. State v. Aragon, 2014 MT 89, ¶ 9, 379 Mont. 391, 321 P.3d 841. “A district court's finding of fact as to the amount of restitution is reviewed under the clearly erroneous standard.” Aragon, ¶ 9. “A finding of fact is clearly erroneous if ‘it is not supported by substantial evidence, the court has misapprehended the effect of the evidence, or our review of the record convinces us that a mistake has been committed.’ ” Aragon, ¶ 9 (quoting State v. Spina, 1999 MT 113, ¶ 12, 294 Mont. 367, 982 P.2d 421). “Substantial evidence ‘is evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence, but may be somewhat less than a preponderance.’ ” Aragon, ¶ 9 (quoting State v. Jent, 2013 MT 93, ¶ 10, 369 Mont. 468, 299 P.3d 332).
DISCUSSION
¶10 Passwater presents a single issue for review:
¶11 Did the District Court err when it ordered restitution based on the Life Care Plan?
¶12 Passwater suggests that the District Court erred for two reasons. First, he argues that the cost calculations in the Plan were too speculative to provide adequate foundation for the restitution award. Second, he argues that his right to due process was violated by the court’s reliance on “uncorroborated hearsay” in the Plan when awarding restitution. Both arguments fail.
¶13 As a part of a criminal sentence, a court must order an offender to pay restitution to a victim who has suffered pecuniary loss as a result of the offense. Section 46-18-241(1), MCA We have reversed awards of restitution when the amounts awarded were based on speculation or insufficient evidence. For example, in Aragon, we reversed a restitution award because the only evidence regarding the amount awarded consisted of two conflicting insurance estimates. We stated, “[a] reasonable mind could not conclude, solely from the two estimates, that one was more appropriate than the other.” Aragon, ¶ 19. We remanded the case for further factual investigation and determination of the proper amount. Aragon, ¶ 22.
¶14 In State v. Collucio, 2009 MT 273, 352 Mont. 122, 214 P.3d 1282 (overruled on other grounds by State v. Kirn, 2012 MT 69, ¶ 8, n.l, 364 Mont. 356, 274 P.3d 746), we reversed a restitution award because we determined that the testimony given in favor of the restitution award was overly speculative. There, after her husband was killed in a car accident, the victim (Troyer) testified to amounts of future costs associated with counseling, home repairs, and lost wages. Collucio, ¶¶ 41-44. As to counseling, she stated she was “at a loss” regarding how to calculate the cost, but did so by “[asking] a few friends that had been to counseling, approximately what to figure based on their expenses.” Collucio, ¶ 41. Regarding home repairs, she stated that she “just assumed that I would spend a minimum of $100 a month paying somebody to do the things that [my husband] would be able to do himself.” Collucio, ¶ 42. Finally, in calculating lost wages, Troyer used a pay stub from her husband’s National Guard job showing half-year gross earnings of $27,608, but then adjusted his compensation based on what she felt he would “potentially earn” from his other jobs, arriving at an annual salary of $92,472 for a total loss of $2,992,165. Collucio, ¶ 43. She also presented a document prepared by a lawyer friend placing total lost wages at $1,338,504, but testified she did not know how that figure had been calculated. Collucio, ¶ 44. We reversed the district court on the issue of restitution and remanded for a legal and factual reconsideration of the damages for counselling, home repairs, and lost wages. We stated, "[a]ssumptions, ballpark figures from friends, and purely speculative calculations are insufficient information upon which to make findings of fact.” Collucio, ¶ 45.
¶15 This case does not align factually with Aragon or Collucio. In those cases, the evidence presented in favor of restitution was not “substantiated in the record” such that “a reasonable mind” could conclude that the award of restitution was warranted. Collucio, ¶ 45; Aragon, ¶ 19. In this case, the District Court had substantial evidence on which to base its decision to award restitution.
¶16 Evidence presented by the State included the Plan compiled by Crowley which recommended a total restitution amount of $1,278,256.00. The Plan itemized that total into categories of expenses and explained the purpose of each expense and how the total was reached. The Plan included citations to scholarly works, industry materials, government handbooks, and pricing data from retailers in support of the amounts given for each category. A letter from Crowley detailed her qualifications as an RN and a Certified life Care Planner and her many years of experience in both fields. The letter also explained that she had consulted with several members of Lynn’s heath care team in preparing the Plan, including an orthotist/prosthetist, orthopedic physician, physical therapist, and vocational expert. Further evidence presented by the State included the Boots’ affidavit of pecuniary loss, claiming a loss of $1,427,318.01, as well as testimony from the Boots at the sentencing hearing detailing the costs they had already incurred due to Lynn’s injury.
¶17 Passwater’s response to the State’s evidence included his Objection to the PSI, in which he suggested that Crowley was unqualified to complete the Plan and asserted that many of the amounts listed within the Plan were purely speculative. The Objection recommended a total restitution amount of $257,200.23, itemized into categories of expense, but did not explain how those expenses were calculated. At the sentencing hearing, Passwater called an amputee witness who testified that the cost of his prosthetic was less than the cost of Lynn’s prosthetic as outlined in the Plan. In a closing statement at the hearing, based on the amputee witness testimony and testimony from the Boots regarding costs they had incurred, Passwater adjusted his recommendation for restitution to $117,200.00.
¶18 At the conclusion of the hearing, the court awarded restitution of $593,828.01 to the Boots and $24,988.40 to the Crime Victim Compensation Program. In doing so, the court went item by item through the Plan, awarding some expenses and reducing or eliminating others. For example, the court pointed out that the $684,036.00 suggested cost of Prosthetic Devices and Supplies included “advanced technology future prosthetic devices,” which the court found speculative. The court reduced that amount to $352,836.00. Similarly, the court reduced the $279,514.00 proposed cost of Home Health Care to $44,962.00.
¶19 Passwater argues that the District Court erred when it relied upon “speculative costs” contained in the Plan. Passwater states that the Plan is “laden with finaybes,’ fit depends,’ and exorbitant unreasoned inflation of item costs.”
¶20 We have held that restitution may be awarded “even though the actual losses may be uncertain, if the losses were calculated by use of reasonable methods based on the best evidence available under the circumstances.” State v. O’Connor, 2009 MT 222, ¶ 14, 351 Mont. 329, 212 P.3d 276 (citing State v. Benoit, 2002 MT 166, ¶ 29, 310 Mont. 449, 51 P.3d 495). We have also acknowledged that there may be “some guess work” associated with determining losses sustained, but the restitution award may be sustained if based on the best evidence available. O’Connor, ¶ 14.
¶21 “A district court’s finding of fact as to the amount of restitution is reviewed under the clearly erroneous standard.” Aragon, ¶ 9. “A finding of fact is clearly erroneous if‘it is not supported by substantial evidence, the court has misapprehended the effect of the evidence, or our review of the record convinces us that a mistake has been committed.’ ” Aragon, ¶ 9. “Substantial evidence ‘is evidence that a reasonable mind might accept as adequate to support a conclusion; it consists of more than a mere scintilla of evidence, but may be somewhat less than a preponderance.’ ” Aragon, ¶ 9. Based on our review of the record we cannot conclude that the District Court’s findings were clearly erroneous. As described above, the District Court was presented evidence from both sides concerning the appropriate amount of restitution. The Plan was prepared by an experienced individual consulting with health care professionals and with outside authority supporting its conclusions. We conclude that a “reasonable mind” could accept this evidence as adequate to support a conclusion, and that the Plan meets the “more than a mere scintilla of evidence” standard and qualifies as substantial evidence. The court accepted several of the Plan’s suggestions but used its own judgment to amend amounts as it saw necessary to avoid speculation or unsubstantiated assumptions. This constituted a “reasonable method” to calculate a final award.
¶22 Between December 27,2013 — the date the Plan was delivered to Passwater — and the March 19, 2014, hearing, Passwater had ample time to gather evidence rebutting the Plan. For example, Passwater could have called another Certified Life Care Planner or medical expert to rebut the expenses in the Plan, or have had an alternative life care plan prepared. Instead, Passwater simply dismissed the Plan as “speculative,” dismissed Crowley as unqualified, and offered an alternative measure of restitution without corroboration. Based on the evidence presented by Passwater, we cannot conclude the District Court erred by relying, in part, upon the Plan as the best available evidence.
¶23 Passwater also argues that his due process rights were violated because the Plan contained “hearsay upon hearsay upon hearsay...” and should not have been allowed as evidence. However, the rules of evidence do not apply to sentencing hearings. Aragon, ¶ 12. Montana Rule of Evidence 101(c)(3) (“Scope”) states:
(c) Rules inapplicable. The [Montana Rules of Evidence] (other than those with respect to privileges) do not apply in the following situations:
(3) Miscellaneous proceedings. Proceedings for... sentencing ....
Furthermore, we have long held that hearsay can be properly considered in sentencing. State v. Bingman, 229 Mont. 101, 113, 745 P.2d 342, 349 (1987) (citing State v. D.B.S., 216 Mont. 234, 247, 700 P.2d 630, 639 (1985)); State v. Dunkerson, 2003 MT 234, ¶ 26, 317 Mont. 228, 76 P.3d 1085. Passwater’s claim that he was prejudiced by the admittance of hearsay evidence at the sentencing hearing is unavailing.
¶24 It is true that a defendant has a due process right to “explain, argue, and rebut any information” presented at sentencing. Aragon, ¶ 12. Passwater, however, makes no claim that he was in any way prevented from doing so. As discussed above, Passwater had ample time to prepare a defense to the Plan and myriad ways in which to do so. If he was concerned with having first party testimony for cross-examination, he could have requested Crowley be subpoenaed. He could have subpoenaed the listed health care specialists to testify about their expertise and their participation in creating the Plan. He did not do so.
CONCLUSION
¶25 The District Court did not err by admitting possible hearsay evidence in the sentencing hearing, because the rules of evidence do not apply to sentencing proceedings. Nor did the District Court err by relying in part upon the Plan to determine the appropriate amount of restitution. The Plan was not purely speculative, and it was supported by substantial evidence. Passwater was not denied the opportunity to rebut the State’s evidence by presenting his own witnesses or evidence. The District Court did not err in awarding restitution to the Boots. ¶26 Affirmed.
JUSTICES McKINNON, BAKER, COTTER and RICE concur.
|
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 M.K (Father) appeals an order of the Fourth Judicial District Court, Missoula County, terminating his parental rights to his children, A.K and KG. We restate Father’s issues and address them as follows:
1. Whether the District Court abused its discretion in terminating Father’s parental rights.
2. Whether the District Court erred in concluding that the Department of Public Health and Human Services complied with its statutory duty to provide reunification services.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In 2010, the Department of Public Health and Human Services (Department) began receiving reports that Father and J.G. (Mother) were putting their children, A.K. and KG., at risk of abuse or neglect. In the spring of 2012, Child Protection Specialist Taryn Kovac interviewed family members and prepared a thirty-day “present danger plan.” During the interviews, Kovac noted that Father made several false misrepresentations, and that he became loud and angry when she confronted him with facts contradicting his statements. Although the present danger plan allowed Father to visit with A.K and KG. under Department supervision, Father did not exercise that right during the thirty-day period. The Department ultimately determined that the present danger plan was insufficient to protect A.K and KG.
¶4 On April 19,2012, the Department filed petitions for emergency protective services, adjudication as youths in need of care, and temporary legal custody. The petitions alleged that Mother and Father put A.K. and KG. in danger of exposure to neglect, physical abuse, physical neglect, psychological neglect, psychological abuse, domestic violence, mental health issues, drug and alcohol abuse, unstable housing, an unsafe living environment, unknown/prohibited caregivers, Father’s criminal history, and the parents’ failure to intervene or eliminate the risk of harm. The social worker’s attached report documented the Department’s concerns that, despite the Present Danger Plan, Mother “remains in protection mode, defending [Father], diminishing her protective capacities and placing the children at risk.” The report observed that Mother’s actions demonstrated “typical behavior for victims of domestic violence.” On June 19, both parents stipulated to the requested relief, and the court granted temporary legal custody to the Department for six months. The children were placed with their maternal grandmother while the Department prepared treatment plans for both parents. Meanwhile, Father completed a psychological evaluation with Dr. Samantha Wildeman and a dangerousness assessment with Ric McLeod, a licensed professional counselor. Dr. Wildeman diagnosed Father with Personality Disorder Not Otherwise Specified (NOS) with narcissistic, histrionic, and obsessive-compulsive features. McLeod determined that Father was in high risk categories for physical, psychological, and emotional dangerousness. Both reports noted that Father had a tendency to deflect blame onto others.
¶5 In May, Evolution Services, which provides support programs for families, began supervising semiweekly visits between the parents and their children. Between May and December, Father participated in at least twenty-four supervised visits. Evolution Services staff did not note any serious issues between Father and A.K during those visits. Also in May, both parents began compliance coaching and Evolution Services’ Circle of Security program.
¶6 On August 7, Father stipulated to the tasks and obligations set forth in his treatment plan. On August 15, both parents stipulated to a No Contact Order. On September 4, the court ordered Mother’s treatment plan and granted Father’s motion to amend two tasks in his treatment plan.
¶7 On October 30, the Department reported that Mother had completed all of the tasks in Phase One of her treatment plan, and it moved to extend temporary legal custody for an additional six months. By December 4,2012, Mother was reunited with both children. Also in December, the Department discontinued visits between Father and A.K. following the advice of the children’s therapist, Margot Luckman. Luckman advised that the visits should cease because A.K. was fearful and anxious in sessions with Father, and A.K. was physically aggressive toward Mother and caregivers during the time period when he was visiting with Father. Father objected. After holding two separate hearings, the court decided not to overrule the Department’s decision. Six months after Father stopped visiting, A.K. was sleeping regularly and was no longer demonstrating fear and anxiety or aggressive behaviors.
¶8 On January 15, 2013, Mother and Father stipulated to a three-month extension of temporary legal custody. In March, Father initiated individual therapy with Tiffany Bartolomei, a licensed professional counselor. Father continued therapy with Bartolomei throughout the proceedings. On April 16, Mother and Father stipulated to another three-month extension of temporary legal custody. Starting in June 2013, Evolution Services conducted six random home visits, each time finding Father’s home satisfactory, though the visits eventually ceased when staff no longer found anyone at home.
¶9 At a status conference on June 4, Father requested a six-month extension of temporary legal custody and asked the Department to take steps immediately to reunite him with his children. The Department reported that the children were doing well with Mother, who had complied fully with her treatment plan. Father had not yet complied with his plan, however, and the Department reported that its reasons for involvement — domestic violence and lack of protective capacity — were still a concern.
¶10 The Department advised the court that, when if initially intervened with the family, Father told Mother that he would not cooperate with the Department, that Mother would do all the work to get the case dismissed, and that after dismissal Father would fight for full custody in a separate proceeding where neither party was represented by counsel. The Department advocated for extending temporary legal custody because Father continued to demonstrate the power and control issues that necessitated the Department’s involvement in the first place. The Department wanted more time to see if Father could follow through with his treatment plan in order to protect the children’s best interests. Father’s counsel complained that the Department was not making sufficient efforts to reunite Father with A.K and emphasized that Father had a fundamental right to be a parent. The court extended temporary legal custody to allow farther time for Father to work on his treatment plan.
¶11 On July 18, the court held a hearing on reunification and visitation between Father and A.K. According to Father’s counsel, Father’s sole reason for requesting an extension of temporary legal custody at the June 4 hearing was for the Department to make efforts to reunite him with his children, which had not happened. Father now wanted the Department’s case dismissed so that he could file for custody and work out a parenting plan. The Department resisted dismissal because Father had not shown the change that would be needed before reinitiating his visits with A.K. Luckman testified that, if the case were to be dismissed, Mother may be capable of protecting the children from Father, but her protective capacity depended on Father’s actions. The Court Appointed Special Advocate (CASA) volunteer, who supervised visits at Evolution Services, testified that she had not observed any indication that Father had changed since she first met him in June 2012.
112 The hearing was continued to August 28 to allow testimony by Dr. Paul Silverman to clarify a January 2013 evaluation of Father’s parental competence conducted by Dr. Silverman. During the evaluation, Dr. Silverman had observed Father interacting with A.K. and noted that Father was “very self-focused,” that he engaged in a concerning “joking but slightly threatening interaction” with A.K, and that A.K. committed self-harm by hitting himself in distress. Dr. Silverman testified that, although the children’s therapist should not be the sole decision-maker as to reunification, she would have the best knowledge of A.K’s psychological state and could provide valuable information about the children’s well-being. Dr. Silverman further testified that it was “very important” for Father to actually complete his treatment plan. He recommended psychotherapy and careful monitoring of Father’s progress, and he did not think it was a good idea for the parents to be involved together with A.K
¶13 The parties also discussed whether the case should be dismissed. Father’s counsel objected to dismissal because Department funding would be needed to continue supervised reunification efforts. The Department emphasized that it needed to continue to act as a buffer between Father and the family to protect the children. The parties agreed to involve a third therapist, Dr. Danette Wollersheim, to liaise between Luckman and Bartolomei, and to oversee the initiation of therapeutic or supervised visits between Father and A.K. The court extended temporary legal custody for six more months so that the Department could control visitation between Father and A.K. until Father showed more progress on his treatment plan.
¶14 In November and December, Father twice visited A.K. in Dr. Wollersheim’s presence. At a status conference in December, Mother reported that A.K. had regressed since he started visiting with Father. The Department advised the court that it would file a petition to terminate Father’s parental rights. On January 13, 2014, Father signed an agreement with Evolution Services for random urinalysis (UA) testing. Father provided four UA specimens — three specimens were clean and one was diluted — but was discharged from the program when he failed to appear for twelve additional UAs. On January 24, the Department filed a Petition for Termination of Father’s parental rights.
¶15 On February 5, the court held a hearing to discuss additional visitation between Father and A.K Mother testified that, when the Department first intervened with the family, Father told her that she was “stupid and [was] going to go through the loop holes and do all the work and he wasn’t going to do anything, and the outcome would be the same, it would be just dismissing the parenting plan and then he would ... fight for full custody.” Kovac expressed concern that Father continued to demonstrate issues of power and control by attempting to carry out this threat, and that the lack of protective capacity that led to the Department filing the case was not resolved. Kovac testified that, although every resource that the Department offered to Mother was twice offered to Father, Mother took advantage of the resources and completed every task to be reunited with her children, while Father did not. The parties presented conflicting testimony from Bartolomei, Luckman, Kovac, and Dr. Wollersheim. Thereafter, the court entered an order suspending visits between Father and his children.
¶16 On April 21 and 25, the court held a termination hearing. The Department’s petition alleged that Father had not successfully completed his treatment plan, and that his behavior was unlikely to change within a reasonable time. Father’s brief argued that the Department unfoundedly prevented him from contact with his children, that a delay in completing certain treatment plan tasks was due to his busy work schedule, and that he had completed his parenting plan and was no longer a danger to his children.
¶17 During the termination hearing, the court heard conflicting testimony. Kelli Caballero, a compliance and parenting coach at Evolution Services, and Dr. Wollersheim recommended more visits monitored by Evolution Services. McLeod recommended against termination because he thought treatment was working. In contrast, the CASA volunteer recommended termination because contact made A.K. anxious and Father had shown a lack of interest in KG.; Luckman recommended termination because contact caused trauma to A.K.; and Kovac recommended termination because Father had not demonstrated responsibility or insight into how his behavior needed to change. Father and Mother also both testified. Father opposed termination while Mother supported it.
¶18 The District Court found that Father had completed certain of his treatment plan tasks: Circle of Security classes; the CAVE anger management program; meeting with Childhood Development Center officials to discuss KG.’s development stages; individual therapy sessions; feedback sessions for McLeod’s dangerousness assessment and Dr. Wildeman’s psychological evaluation; and a parenting assessment. However, the court found that Father did not make his required monthly contact with Luckman until after the Department filed its petition to terminate his parental rights, and that Father had repeatedly refused to work with Kovac or to communicate with the CASA volunteer. At trial, Father submitted several text messages that he alleged evinced his repeated attempts to contact Kovac without response. The court discovered that Father had deleted many of Kovac’s responses before presenting the text messages to the court. The court found that Father had not complied with his treatment plan, despite the Department’s reasonable efforts to restore the parent-child relationship.
¶19 The District Court further found that neither therapist who recommended continued supervised contact between Father and A.K. had accounted for the psychological damage to A.K. following visits with Father or for Father’s inability to understand how his conduct affected A.K. The court found Mother’s testimony that Father had exposed her to physical violence in front of A.K. to be credible, despite Father’s denial that he had been physically violent. Finally, the court found that establishing permanency was in both children’s best interests and that, although Father had made “some progress” over the previous two years, he was unlikely to become a fit parent within a reasonable time. The court determined that clear and convincing evidence supported terminating Father’s parental rights.
STANDARDS OF REVIEW
¶20 We review a district court’s decision to terminate parental rights for abuse of discretion. In re L.N., 2014 MT 187, ¶ 12, 375 Mont. 480, 329 P.3d 598. We review a district court’s findings of fact for clear error. L.N., ¶ 12. A parent’s right to the care and custody of a child is a fundamental liberty interest that must be protected by fundamentally fair procedures. In re D.B., 2007 MT 246, ¶ 17, 339 Mont. 240, 168 P.3d 691. Courts must give primary consideration to the “physical, mental, and emotional conditions and needs of the child.” Section41-3-609(3), MCA. A child’s best interests take precedence over parental rights. In re Matter of E.K., 2001 MT 279, ¶ 33, 307 Mont. 328, 37 P.3d 690.
DISCUSSION
¶21 1. Whether the District Court abused its discretion in terminating Father’s parental rights.
¶22 Under § 41-3-609(l)(f), MCA, a court may terminate parental rights to a non-Indian child if it finds, by clear and convincing evidence, that:
[T]he child is an adjudicated youth in need of care and both of the following exist: (i) an appropriate treatment plan that has been approved by the court has not been complied with by the parents or has not been successful; and (ii) the conduct or condition of the parents rendering them unfit is unlikely to change within a reasonable time.
In parental rights cases, clear and convincing evidence is “simply a requirement that a preponderance of the evidence be definite, clear, and convincing, or that a particular issue must be clearly established by a preponderance of the evidence or by a clear preponderance of proof.”D.B., ¶ 29 (quoting In re F.M., 2002 MT 180, ¶ 48, 311 Mont. 35, 53 P.3d 368). It “does not call for unanswerable or conclusive evidence.” In re J.M.W.E.H., 1998 MT 18, ¶ 33, 287 Mont. 239, 954 P.2d 26 (quotingIn re J.L., 277 Mont. 284, 289, 922 P.2d 459, 462 (1996)).
A. Whether the Department failed to act in good faith in implementing Father’s treatment plan.
¶23 Effectuating an appropriate treatment plan requires the Department “to act in good faith ... to preserve the parent-child relationship and the family unit,” a requirement that “does not end once the court has approved [the] treatment plan.”D.S., ¶ 33 (citations omitted). Father stipulated to the treatment plan and does not dispute on appeal that the requirements of his treatment plan were appropriate. Rather, Father argues that the Department did not execute his plan in good faith because the Department favored Mother, was biased against Father, and “violated statutory procedures by refusing to dismiss the case against... Mother in order to ensure that she had an attorney at State expense to protect her parental interest against ... Father.” According to Father, the Department was “mandated” to dismiss its case against Mother six months after reports of abuse or neglect ceased.
¶24 Under § 41-3-424, MCA, dismissal is appropriate when all of the following criteria are met:
(1) a child who has been placed in foster case is reunited with the child’s parents and returned home; (2) the child remains in the home for a minimum of 6 months with no additional confirmed reports of child abuse or neglect; and (3) the department determines and informs the court that the issues that led to department intervention have been resolved and that no reason exists for further department intervention or monitoring.
The Department determined that monitoring the children’s reunification with Mother was necessary in continuing the efforts to reunite the children with Father and to monitor Mother’s and Father’s ability to co-parent, particularly in light of the domestic violence history. The issues that led to Department intervention — domestic violence and lack of protective capacity — -remained unresolved. In order for the family to be successful, Mother and Father needed to be able to co-parent even if they were separated. The Department was concerned that Father’s consistent unwillingness to participate in treatment would lead to continued risk to the children, and that Mother would be unable to protect the children from Father’s power-play of refusing to cooperate with the Department while Mother completed her tasks so that the Department would dismiss the case and Father could fight for custody in court.
¶25 Father also pressed for additional time to work on reunification with A.K. He stipulated to two three-month extensions of temporary legal custody in the beginning of 2013 and suggested a six-month extension at the June 4, 2013 hearing. Father sought dismissal only when the Department did not agree that he was ready for visitation with A.K. At the August 28,2013 hearing, however, Father objected to dismissal in order to continue to receive reunification services from the Department.
¶26 The Department moved several times to extend temporary legal custody to give Father an opportunity to demonstrate follow-through on his treatment plan. While Father faults the Department, the record reflects his conscious decision not to participate in some of the offered services, which contributed to the treatment plan’s lack of success. Although the Department could have sought dismissal of Mother, the statute did not require the court to dismiss the petition against her in these circumstances.
¶27 The court kept the matter open because both parties had made clear that continued Department services were necessary for Father to build a relationship with his children. The court voiced its concern that, if the case were dismissed, the parties “would be tossed into a parenting plan action and we wouldn’t have the resources that we have got here to try and figure out whether there would be any future visitation” between Father and his children. The court did not abuse its discretion in keeping the matter open because the issues that led to the Department’s intervention remained unresolved. Despite Father’s assertions, the record does not show that the Department acted in bad faith, was biased against Father, or favored Mother to Father’s detriment in implementing the treatment plan.
B. Whether the District Court erred in finding that Father failed to comply with his treatment plan.
¶28 Although Father admits that he did not complete eveiy task of the plan, he argues that he completed those tasks that were “necessary.” “A parent does not successfully complete a treatment plan by partial, or even substantial, compliance.” In re I.B., 2011 MT 82, ¶ 27, 360 Mont. 132, 255 P.3d 56 (citations omitted). Even if a parent technically completes all of the tasks in a treatment plan, he does not successfully complete the plan unless he “effectuates the purposes for which the plan [was] designed.” J..B., ¶ 27 (citing § 41-3-6Q9(l)(f)(i), MCA). A court must “do more than mechanistically check items off a task list,” and instead determine whether the parent has “actually effectuated the purposes of the treatment plan.”/.J3., ¶ 27 (citations omitted).
¶29 The court found that Father had not complied with all of his tasks or effectuated the purpose of his treatment plan: Father continued to deflect blame for his situation on the Department; he did not make monthly contact with the children’s therapist until after the Department filed the petition for termination of parental rights; he demonstrated a lack of interest in his children’s well-being and particularly in his daughter, KG.; he repeatedly failed to show up for necessary appointments; and he repeatedly refused to work with Kovac over the course of two years or to communicate with the CASA volunteer. Father argues that his refusal to work with Kovac, Luckman, and the CASA does not make him unfit to parent. But the statute requires that the treatment plan be “complied with by the parents” and that it be successful. Section 41-3-609(l)(f)(i), MCA. The District Court found that Father’s required contact with A.K.’s therapist was central to effectuating the treatment plan’s objective for Father to -understand how his conduct affects his son. The court concluded that Father’s conduct demonstrated a refusal to accept full responsibility for the removal of his children and showed that he had not made the changes necessary to foster a healthy relationship with them. The record is sufficient to support the District Court’s finding that Father failed to comply with his treatment plan.
C. Whether the District Court erred in finding that Father’s parental unfitness is unlikely to change in a reasonable time.
¶30 A district court, in determining whether the conduct or condition rendering a parent unfit is unlikely to change within a reasonable time, must enter a finding that continuing the parent-child legal relationship “will likely result in continued abuse or neglect or that the conduct or the condition of the parents renders the parents unfit, unable, or unwilling to give the child adequate parental care.” Section 41-3-609(2), MCA. This analysis requires the court to consider several factors including, but not limited to, the parent’s
mental deficiency ... of a duration or nature as to render the parent unlikely to care for the ongoing physical, mental, and emotional needs of the child within a reasonable time;... history of violent behavior by the parent; [and] excessive use of intoxicating liquor or... drug[s] that affects the parent’s ability to care and provide for the child ....
Section 41-3-609(2), MCA. The court also must consider “past and present conduct of the parent.” In re J.C., 2003 MT 369, ¶ 11, 319 Mont. 112, 82 P.3d 900. See also In re CAR., 214 Mont. 174, 188, 693 P.2d 1214, 1222 (1984) (mother’s conduct was unlikely to change when mother did not show progress rehabilitating until under threat of petition to terminate her parental rights).
¶31 Although Father points to the testimony of two expert witnesses who did not believe termination was appropriate, “the existence of conflicting evidence does not preclude a trial court’s determination that clear and convincing evidence exists to support a finding of fact.” In re M.F.B., 2001 MT 136, ¶ 19, 305 Mont. 481, 29 P.3d 480 (citations omitted). See also J.M.W.E.H., ¶ 34 (“[T]he fact that Appellant’s testimony conflicts with other witness testimony, or the fact that the witnesses’ allegations are based on inferences, does not automatically preclude the court from finding that Appellant violated her treatment plan.”). A district court has discretion to weigh expert testimony and determine witness credibility. J.M.W.E.H., ¶ 34. This Court does not “substitute [its] evaluation of the evidence for that of the trial court, or pass upon the credibility of wítnesses.”J.M W.E.H., ¶ 84 (qouting J.L., 277 Mont. at 290, 922 P.2d at 462).
¶32 After conducting several hearings and listening to conflicting testimony, the District Court decided that the Department had met its burden to terminate Father’s parental rights. The court determined that the conduct or condition rendering Father unfit was unlikely to change within a reasonable time because Father addressed tasks on his treatment plan only when pushed; he continuously failed to show up for scheduled appointments; he was discharged from rehabilitation programs for lack of compliance; he refused to meet with his children’s therapist to learn about their needs; and he refused contact with the Department’s Child Protection Specialist. The court also considered Father’s observed tendency to externalize blame, including at trial when he presented incomplete text messages as evidence of Kovac’s alleged failure to communicate with him; his history of domestic violence; and Dr. Wildeman’s diagnosis of Personality Disorder NOS with narcissistic, histrionic, and obsessive-compulsive features. The court noted that Father demonstrated a lack of concern for his children’s well-being and did not ask professionals important questions about his children’s activities and behavior.
¶33 There is a strong correlation between violence toward a partner and child abuse, and “childhood exposure to domestic violence should be taken just as seriously as child abuse.” Brandi Ries & Hilly McGahan, Sometimes the Cases that Nobody Wants can have the Greatest Impact, 40 Mont. Lawyer 6 (State Bar Mont.), April 2015, at 15 (citing National Clearinghouse on Child Abuse and Neglect, In Harm’s Way: Domestic Violence and Child Maltreatment (2003)). “Children and youth who are victims of, or witnesses to, violence often suffer long-term emotional distress and physical consequences. When these problems remain unaddressed, children are at higher risk for school failure, substance abuse, repeated victimization, and perhaps most tragically, perpetuating violent behavior later in their own lives.” U.S. Dep’t of Justice, National Advisory Committee on Violence Against Women, Final Report 1 (June 2Q12). Although two experts who had worked with Father recommended continued supervised contact between Father and A.K., the court found that neither witness accounted for the psychological damage to A.K. following those visits, or for Father’s inability to understand how his conduct affected A.K. The District Court had discretion in evaluating the conflicting expert testimony, and we will not substitute our judgment for the trial court’s resolution of those conflicts.
¶34 Finally, the District Court also had discretion to evaluate the evidence regarding Father’s efforts, or lack thereof, to foster a parent-child relationship with his daughter, KG. The record does not support Father’s claim of clear error in the court’s findings that Father did not take active steps in this regard and that, in light of all of the evidence, Father’s conduct was not likely to change within a reasonable time.
¶35 We conclude that the District Court did not abuse its discretion in terminating Father’s parental rights. The court based its decision on clear and convincing evidence and properly applied the legal standards governing termination.
¶36 2. Whether the District Court erred in concluding that the Department complied with its statutory duty to provide reunification services.
¶37 Under § 41-3-423(1), MCA, the Department must make “reasonable efforts” to reunite families that it has separated. “Reasonable efforts include but are not limited to voluntary protective services agreements, development of individual written case plans specifying state efforts to reunify families, ... provision of services pursuant to a case plan, and periodic review of each case to ensure timely progress toward reunification ....” Section 41-3-423(1), MCA. “Although the State may assist the parents in completing the treatment program, the parents retain the ultimate responsibility for complying with the plan.” In re R.H., 250 Mont. 164, 171, 819 P.2d 152, 156 (1991) (citing In re L.W.K., 236 Mont. 14, 19, 767 P.2d 1338, 1342 (1989)).
¶38 The District Court specifically found that the Department made “reasonable efforts in an attempt to restore the parent-child relationship” by funding evaluations, assessments, supervised visitations, compliance coaching, and therapy. The Department developed an individual case plan specifying its efforts to reunite Father with his children, provided services under that plan, and periodically reviewed the case by conducting evaluations and holding hearings to extend temporary legal custody. The record reflects roughly a dozen hearings or conferences with the court over a period of two years before the case proceeded ultimately to a termination hearing. Father received additional services when temporary legal custody was extended and Dr. Wollersheim was brought in to facilitate Father’s reunification with his children. In evaluating the Department’s reasonable efforts to achieve reunification, “each case must be evaluated on its own facts.” In re K.L., 2014 MT 28, ¶ 41, 373 Mont. 421, 318 P.3d 691. Although Father faults the case worker for failing to investigate other possible reasons for A.K’s regression after the visits with Dr. Wollersheim, the District Court determined that it was Father’s own behavior that resulted in his unsuccessful attempt to reinstate visits with the children and the ultimate failure of his treatment plan.
¶39 The District Court did not err by finding that the Department made reasonable efforts to reunite Father with his children.
CONCLUSION
¶40 We conclude that the District Court did not abuse its discretion in terminating Father’s rights. The District Court’s factual findings are supported by the record, and the court did not err in finding that the Department made reasonable efforts to reunite Father with his children. We affirm the District Court’s decision and order.
CHIEF JUSTICE McGRATH, JUSTICES COTTER and WHEAT concur.
Available at http://penna.ee/RDX4-6WX8.
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Dennis Leo Schowengerdt (Schowengerdt) appeals from the judgment and sentence entered by the Third Judicial District Court, Powell County, following the entry of his guilty plea to the charge of deliberate homicide. Schowengerdt challenges the denial of his request for the appointment of new counsel and alleges his right to effective assistance of counsel was violated. We remand for further proceedings on a limited issue.
¶2 The parties raise the following issues on appeal:
1. Did the District Court adequately inquire into Schowengerdt’s complaint that defense counsel had rendered ineffective assistance of counsel?
2. Did Schowengerdt receive ineffective assistance of counsel?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 On December 10, 2012, the State filed an information charging Schowengerdt with one count of deliberate homicide. The State alleged by affidavit that on December 8, 2012, just before midnight, Schowengerdt repeatedly stabbed his wife, Tina Schowengerdt, resulting in her death. The affidavit further stated that, the following morning, Schowengerdt entered the Powell County Law Enforcement Center and provided a frill confession.
¶4 On January 2,2013, Steven Scott (Scott) of the Office of the State Public Defender (OPD) was assigned as counsel for Schowengerdt. On January 17, Scott filed a “Notice of Intention” in which he advised that Schowengerdt intended to plead not guilty and assert the affirmative defense of justifiable use of force. However, on April 2, Schowengerdt agreed to plead guilty to deliberate homicide, without the benefit of a plea agreement. In a handwritten statement, Schowengerdt admitted killing his wife: “I knowingly stabbed Tina Schowengerdt with a knife causing her death. This occurred on 12/8/12.” During the ensuing change of plea hearing, Schowengerdt indicated that he was satisfied with the services of his attorney and was voluntarily entering his plea. During the plea colloquy, Schowengerdt stated he did not want to proceed to trial because “I can’t handle it.” Schowengerdt admitted that he stabbed Tina with a knife knowing that it would cause her death. The District Court accepted Schowengerdt’s guiltyplea, and the matter was set for sentencing.
¶5 On June 12, Schowengerdt sent a handwritten letter to the District Court, seeking the appointment of new counsel. The letter stated as follows:
I am Requesting a Withdraw as My Attorney at this time Mr Steve Scott
I AM Requesting For proper Reputation in My case
Two days later, Scott filed a motion for withdrawal of Schowengerdt’s guilty plea- In his supporting brief, Scott explained: “Mr. Schowengerdt, during a visit with his attorney, Mr. Scott, stated he wants to withdraw his plea of guilty and proceed onto trial in this case. Mr. Schowengerdt indicated he made a mistake when he entered into the plea and now wishes to withdraw his plea and proceed to trial.” Scott further added, “It is my duty as a licensed attorney in Montana to point out to the Court there is not any case law in Montana to support Mr. Schowengerdt’s position as to the withdraw of plea.”
¶6 On June 17, the District Court ordered Scott to submit a memorandum explaining Scott’s position regarding his continued representation of Schowengerdt and the “Public Defender’s position with respect to providing Schowengerdt with new counsel.” Scott did so, stating that he had “no problem with continuing to represent” Schowengerdt and that he did not believe there had been a breakdown of the attorney-client relationship, and describing the process by which Schowengerdt could file a complaint with OPD.
¶7 On July 2, the District Court convened a hearing to address Schowengerdt’s letterfor change in representation. The court stated to Schowengerdt that it was unclear from his letter why he did not want Scott to be his attorney, after which the following colloquy occurred:
[Schowengerdt]: Can I explain it to you?
[Court]: Go ahead.
[Schowengerdt]: All right. Early on, back in December, might have been January, but it was early on—
[Court]: Well, Mr. Schowengerdt, let me stop you there. You’re starting to tell a story. I’m going to remind you that you have a right to remain silent. The things you say in court can wind up to be to your prejudice in the future.
[Schowengerdt]: It seems like I’ve already spoke about everything that’s got me here.
Thus, at the point Schowengerdt was going to explain his dissatisfaction with his assigned counsel, the court interrupted him and Schowengerdt was never provided another chance to speak to the issue. Instead of inquiring into Schowengerdt’s objections, the court directed him to follow the OPD’s process for obtaining substitute counsel:
[Scott]: Dennis, do you want a different attorney from the Public Defender’s Office?
[Schowengerdt]: Yes.
[Court]: All right. If that’s what you’re driving at, you need to communicate with the Public Defender’s Office rather than me and tell them why you think you should have a different lawyer, and then they will tell me whether or not they’ll give you one.
[Court]: If they do not give you a different lawyer, then you have — we’re going to be looking at: Okay, am I going to let Mr. Scott off the hook in this case or not?
¶8 On August 27, the District Court conducted a hearing on Schowengerdt’s motion to withdraw his plea. At the outset of the hearing, the court inquired whether the issue of Schowengerdt’s representation had been resolved. Scott explained that the OPD had denied Schowengerdt’s request for a new counsel, and that Schowengerdt had not administratively appealed the decision. The court then responded:
All right. So the matter is concluded then. The matter has run its course. We had a hearing. We made it apparent to Mr. Schowengerdt what procedure he was to follow. He followed the procedure. A decision was made. It has not been appealed, and Mr. Steven Scott remains Schowengerdt’s attorney.
So we’ll proceed, then, to the Defendant’s motion to withdraw his plea of guilty on the singular charge of deliberate homicide.
¶9 In contrast to its prior statements, the District Court did not inquire further into the basis for Schowengerdt’s complaints concerning his counsel. Moving to argument on the motion to withdraw the guilty plea, Scott stated he did not “have anything to add beyond what is in the motion in this matter.” Scott explained: “It was during a visit with Mr. Schowengerdt that he asked me ... to file a motion to withdraw his plea. He did not have a basis to give to me as to why he felt his plea should be withdrawn... . It was simply that Mr. Schowengerdt changed his mind and would like to be able to withdraw his plea.”
¶10 Following Scott’s statement, the court gave Schowengerdt an opportunity to address the withdrawal of his plea. Schowengerdt indicated that he was “not prepared for this,” and then stated: “I don’t think I’m guilty. I know what the outcome was, but I think I was fighting for my life.” Scott concluded by stating: “all I have is that Mr. Schowengerdt has asked me to file the motion to withdraw his guilty plea. I don’t have any case law on my side to support that motion, but we’re just simply asking — Mr. Schowengerdt is simply asking he be allowed to withdraw his plea and continue to trial.”
¶11 The District Court denied Schowengerdt’s motion to withdraw his plea, concluding that the “Defendant has not in any way asserted his plea of guilty was involuntary and there is no basis in the record to conclude Defendant’s guilty plea was involuntary.” The District Court sentenced Schowengerdt to life in the Montana State Prison.
¶12 Schowengerdt appeals.
STANDARD OF REVIEW
¶13 We review a district court’s denial of a request for substitution of counsel for an abuse of discretion. Halley v. State, 2008 MT 193, ¶ 11, 344 Mont. 37, 186 P.3d 859.
¶14 “Ineffective assistance of counsel claims raise mixed questions of law and fact that we review de novo.” State v. Savage, 2011 MT 23, ¶ 20, 359 Mont. 207, 248 P.3d 308.
DISCUSSION
¶15 1. Did the District Court adequately inquire into Schowengerdt’s complaint that defense counsel had rendered ineffective assistance of counsel?
¶16 Schowengerdt challenges the adequacy of the District Court’s inquiry into his request for new counsel. He argues that the court failed to inquire into his complaints concerning his representation to determine if they were “seemingly substantial.” The State counters that the District Court conducted an adequate inquiry because Schowengerdt did not appeal the decision of the OPD and Schowengerdt failed to “provide specific complaints about” his counsel, instead only making “vague statements about wanting proper representation or not thinking that he had been represented properly.” Alternatively, the State argues, citing our decision in State v. Edwards, 2011 MT 210, 361 Mont. 478, 260 P.3d 396, that “[e]ven if the district court did not conduct an adequate initial inquiry, that does not require reversal because Schowengerdt did not raise a complaint that communications had broken down or that he feared his counsel would fail to effectively represent him going forward to sentencing.”
¶17 The United States Constitution and the Montana Constitution guarantee a criminal defendant the right to effective assistance of counsel. U.S. Const, amend. VI; Mont. Const, art. II, § 24. If a defendant asserts a claim of ineffective assistance of counsel, and requests the appointment of new counsel, the “district court must conduct an ‘adequate initial inquiry’ to determine whether the defendant’s claim is ‘seemingly substantial.’ ” State v. Happel, 2010 MT 200, ¶ 14, 357 Mont. 390, 240 P.3d 1016 (citing State v. Gallagher, 1998 MT 70, ¶ 15, 288 Mont. 180, 955 P.2d 1371). We have explained the “threshold issue to determine whether a complaint is substantial is not whether counsel was ineffective, but rather whether the district court made an adequate inquiry into the defendant’s claim.” Happel, ¶ 14 (citing State v. Gazda, 2003 MT 350, ¶ 30, 318 Mont. 516, 82 P.3d 20). We have found it to be “reversible error where a district court fails to make an initial inquiry into a defendant’s complaints about counsel.” City of Billings v. Smith, 281 Mont. 133, 137, 932 P.2d 1058, 1061 (1997). The district court’s inquiry is adequate so long as the “court considers the defendant’s factual complaints together with counsel’s specific explanations addressing the complaints.” State v. Rose, 2009 MT 4, ¶ 96, 348 Mont. 291, 202 P.3d 749 {superseded in part on other grounds, State v. Stops, 2013 MT 131, 370 Mont. 226, 301 P.3d 811) (citing City of Billings, 281 Mont. at 136-37, 932 P.2d at 1060). However, if the district court “fails to conduct ‘even a cursory inquiry,’ such an effort is inadequate and justifies remand of the case for further proceedings.” Happel, ¶ 14 (citing State v. Weaver, 276 Mont. 505, 511-12, 917 P.2d 437, 441-42 (1996)).
¶18 Here, the District Court erred by failing to conduct an adequate inquiry into Schowengerdt’s complaints. After entering his guilty plea, Schowengerdt sent the June 12 letter to the District Court asking to have his counsel removed from his case. Although the letter was short and Schowengerdt’s writing skills were minimal, the letter made clear that Schowengerdt was asking for new counsel to be substituted for Scott. Schowengerdt confirmed that intention during the subsequent hearing. However, after asking Schowengerdt about his concerns, the District Court interrupted Schowengerdt as he attempted to give an explanation. The court ordered Schowengerdt to follow the OPD’s process for appointment of new counsel. The court stated that additional proceedings would be conducted if OPD denied Schowengerdt’s request. However, when the OPD administratively denied the request, the court ruled that the matter was concluded and conducted no additional proceedings.
¶19 The District Court plainly did not consider Schowengerdt’s complaints as it did not permit Schowengerdt an opportunity to offer them during the hearing. The record does not indicate what Schowengerdt’s objections were to Scott’s representation. Instead, the District Court merely deferred to the OPD’s administrative process on the issue of whether Schowengerdt was entitled to new counsel. While the OPD administrative process may be helpful in resolving some conflicts that arise in the assignment of counsel, it does not supplant judicial procedures that ensure that a criminal defendant is provided the constitutional right to counsel. The District Court failed to follow these procedures when it neglected to inquire into Schowengerdt’s complaints concerning his representation.
¶20 The State argues that the court’s error does not require reversal based on State v. Edwards. There, the defendant requested new counsel after being convicted at trial, and the district corut, upon receipt of Edwards’ post-trial motion, failed to inquire into his complaints prior to sentencing. Edwards, ¶ 29. Despite the court’s error, we concluded that remand was unnecessary because Edwards’ complaints related solely to the alleged ineffectiveness of his counsel at trial, and he had failed to argue that “he feared counsel would fail to effectively represent him going forward to sentencing.” Edwards, ¶ 29. The State argues that Schowengerdt’s complaints here were similarly inadequate to require inquiry by the District Court.
¶21 However, we are not able to determine whether Schowengerdt’s complaints here were sufficient because he was not provided an opportunity to explain them. And, unlike Edwards, Schowengerdt argues that his counsel would not be able to effectively represent him going forward with his motion to withdraw his plea in the event the matter is remanded. Schowengerdt requests “the opportunity to present his motion to withdraw his guilty plea to the district court through constitutionally effective counsel.” Consequently, the District Court’s failure to adequately inquire into his complaints necessitates a remand for further proceedings on this issue.
¶22 2. Did Schowengerdt receive ineffective assistance of counsel?
¶23 Given our resolution of Issue 1, it is not necessary to address Issue 2 at this time. The proceedings on remand may well render moot any claim of ineffective assistance of counsel.
CONCLUSION
¶24 Upon remand, the District Court must adequately inquire into Schowengerdt’s complaints about his assigned counsel to determine whether his complaints are seemingly substantial and necessitate a hearingto determine thevalidity of Schowengerdt’s allegations and the need for substitution of counsel. If the court determines that new counsel is warranted, then, in accordance with the relief sought by Schowengerdt, he will have “the opportunity to present his motion to withdraw his guilty plea to the district court” with new counsel. We express no opinion on the merits of Schowengerdt’s motion to withdraw his guilty plea. If, on the other hand, the court determines that Schowengerdt has not presented seemingly substantial complaints about his counsel, or is otherwise not entitled to new counsel, then the judgment and sentence are affirmed, subject to Schowengerdt’s right to appeal the District Court’s determinations made on remand, and his preserved issue concerning ineffective assistance of counsel. See Weaver, 917 P.2d at 441-42, 276 Mont. at 512.
¶25 Remanded for farther proceedings as stated herein.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, BAKER and SHEA concur.
|
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OPINION AND ORDER
¶1 Barry Allan Beach petitions for a writ of habeas corpus, arguing that his sentence of one hundred years of imprisonment without the possibility of parole is unconstitutional under Miller v. Alabama, 567 U.S._, 132 S. Ct. 2455 (2012). The dispositive issue is whether Miller’s rule requiring a sentencing judge to consider a juvenile offender’s age when sentencing that offender to life without parole applies retroactively on collateral review. We conclude that it does not. We deny Beach’s petition.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 In 1984, a Roosevelt County jury convicted Beach of deliberate homicide for a crime committed in 1979, when Beach was seventeen. Under Montana’s sentencing scheme, the District Court could impose a maximum sentence of one hundred years’ imprisonment without the possibility of parole. See §§ 45-5-102(2), 46-18-202(2), -222, -305, MCA (1978). On May 11, 1984, following its consideration of a written presentence investigation report and statements by both Beach and the prosecutor in open court, the District Court imposed the maximum sentence. Beach concedes that the sentence was within the discretion of the District Court and that the sentence was not mandated by law. The record does not show that the court expressly considered Beach’s youth when imposing the sentence.
¶3 In the years since, Beach repeatedly has attacked his conviction and sentence. See Beach v. McCormick, No. 98-35957, 1999 U.S. App. Lexis 20999 (9th Cir.), cert. denied 528 U.S. 1194, 120 S. Ct. 1255 (2000); State v. Beach, 2013 MT 130, 370 Mont. 163, 302 P.3d 47; Beach v. State, 2009 MT 398, 353 Mont. 411, 220 P.3d 667; Beach v. Day, 275 Mont. 370, 913 P.2d 622 (1996); State v. Beach, 217 Mont. 132, 705 P.2d 94 (1985). Beach now petitions for a writ of habeas corpus, attacking the constitutionality of his sentence under the United States Supreme Court’s recent decision in Miller.
STANDARD OF REVIEW
¶4 This Court determines the retroactivity of a constitutional rule as a matter of law. State v. Reichmand, 2010 MT 228, ¶ 6, 358 Mont. 68, 243 P.3d 423.
DISCUSSION
I.
¶5 As an initial matter, the State urges that Beach’s habeas corpus petition is procedurally barred.
¶6 Article H, Section 19 of the Montana Constitution provides, “The privilege of the writ of habeas corpus shall never be suspended.” Under Montana’s statutory scheme for reviewing claims by convicted offenders, habeas corpus is not the method for collaterally reviewing the conviction or sentence of a person who has been adjudged guilty of a crime and has exhausted direct appeal. Section 46-22-101(2), MCA. Rather, a petition for postconviction relief is the method by which an offender who has been found guilty may collaterally attack his conviction or sentence. Section 46-21-101(1), MCA. Petitions for postconviction remedies carry strict limitations. See § 46-21-102, MCA. In Lott v. State, 2006 MT 279, 334 Mont. 270, 150 P.3d 337, we held that statutoxy limitations on the availability of the writ of habeas corpus are unconstitutional under Article II, Section 19 of the Montana Constitution as applied to an offender sentenced to a “facially invalid sentence” where the facial invalidity stems from a rule created after time limits for directly appealing or petitioning for postconviction relief have expired. Lott, ¶ 22.
¶7 The State argues that Lott does not apply because Beach’s sentence is not facially invalid. Beach counters that the recent United States Supreme Court decision in Miller makes his sentence facially invalid. Miller requires following a certain procedure before sentencing a juvenile to life without the possibility of parole. Miller, 567 U.S. at _, 132 S. Ct. at 2471. Beach is imprisoned under a sentence that he argues equates to life without parole. Because Miller was not announced until 2012, Beach could not have raised a claim under that case until after time limits for direct review and postconviction relief had run. In these circumstances, we are satisfied that Beach’s claim sufficiently calls into question the facial validity of his sentence to lift the statutory bar to a petition for habeas corpus relief.
II.
¶8 The United States Constitution’s Eighth Amendment prohibits cruel and unusual punishment. “The concept of proportionality is central to the Eighth Amendment.” Graham v. Florida, 560 U.S. 48, 59, 130 S. Ct. 2011, 2021 (2010). While in practice the concept of proportionality does not affect most sentences, see generally, Ewing v. California, 538 U.S. 11, 123 S. Ct. 1179 (2003), proportionality bears on the harshest types of punishments when an Eighth Amendment challenge is raised.
¶9 Because of the concept of proportionality, the Eighth Amendment requires individualized sentencing in death penalty proceedings to determine whether that punishment corresponds to an offender’s character, circumstance, and crime. Lockett v. Ohio, 438 U.S. 586, 604, 98 S. Ct. 2954, 2964-65 (1978); Woodson v. North Carolina, 428 U.S. 280, 303-05, 96 S. Ct. 2978, 2991-92 (1976). Further, the death penalty categorically represents an unconstitutionally disproportionate punishment when imposed for certain crimes (like non-homicide offenses, Kennedy v. Louisiana, 554 U.S. 407, 438, 128 S. Ct. 2641, 2660 (2008)), and on certain classes of offenders with lesser capacities (like intellectually disabled persons, Atkins v. Virginia, 536 U.S. 304, 321, 122 S. Ct. 2242, 2252 (2002), and juveniles, Roper v. Simmons, 543 U.S. 551, 575, 125 S. Ct. 1183, 1198 (2005)).
¶10 The Supreme Court recently made clear that a sentence of life imprisonment without the possibility of release, though not the harshest punishment for an adult offender, is subject to more exacting scrutiny when imposed on a juvenile. In Graham, the Supreme Court held that life without parole represents a categorically disproportionate sentence for a juvenile convicted of a non-homicide offense. Graham, 560 U.S. at 75, 130 S. Ct. at 2030. Next, in Miller, the Court considered the proportionality of life without parole imposed on a juvenile for a homicide offense. The Miller Court declined to address whether the Eighth Amendment categorically bars a life without parole sentence imposed on a juvenile convicted of homicide. Miller, 567 U.S. at_, 132 S. Ct. at 2469. The Court instead specified that appropriate circumstances to impose such a sentence are “uncommon.” Miller, 567 U.S. at_, 132 S. Ct. at 2469. To ensure that imposing life without parole on a juvenile homicide offender is proportional, the Eighth Amendment requires that, before imposing such a sentence, a sentencer “take into account how children are different, and how those differences counsel against irrevocably sentencing them to a lifetime in prison.” Miller, 567 U.S. at_, 132 S. Ct. at 2469. Accordingly, the Eighth Amendment “forbids a sentencing scheme that mandates life in prison without possibility of parole for juvenile offenders” because such a scheme prevents a sentencer from taking into account constitutionally necessary considerations. Miller, 567 U.S. at_, 132 S. Ct. at 2469.
¶11 Beach argues that his sentence equates to life without parole. Beach concedes thatMiiier’s holding forbidding mandatory life without parole sentences does not apply to his case because his sentence was not mandatory. Both at the time of Beach’s offense and now, Montana sentencing statutes have prescribed an individualized sentencing procedure that allows the sentencing court, after considering all circumstances of the offender and the offense, to fashion a sentence within the range provided by the statute under which the offender was convicted. See §§ 46-18-101, -201, MCA(1978); §§ 46-18-101, -201, MCA (2013). Nevertheless, Beach argues that his sentence is unconstitutional under Miller because his sentencer did not consider how Beach’s age counseled against his sentence.
¶12 Beach’s conviction and sentence became final for purposes of direct review in 1985. Miller was announced in 2012. Beach may benefit from Miller only if Miller creates a rule that applies to a sentence imposed years before Miller was issued.
m.
A.
¶13 Beginning with Linkletter v. Walker, 381 U.S. 618, 85 S. Ct. 1731 (1965), the United States Supreme Court struggled for over two decades with how and when to apply constitutional rules retroactively in criminal cases. Justice Harlan was the most influential critic of the Court’s retroactivity approach during this period. In dissents in Mackey v. United States, 401 U.S. 667, 91S. Ct. 1160 (1971), and Desist v. United States, 394 U.S. 244, 89 S. Ct. 1030 (1969), Justice Harlan devised an alternative approach for determining retroactivity.
¶14 The distinction between direct and collateral review represents the central feature of Justice Harlan’s framework. Justice Harlan believed that the judicial function requires applying all rules of constitutional law to cases yet to be tried and on direct review. Mackey, 401 U.S. at 681. But Justice Harlan also believed that new rules generally should not apply retroactively to offenders on collateral review because of the interest in finality that attaches once direct review ends, administrative costs associated with retrial years after the fact, and the historic functions of habeas corpus. Mackey, 401 U.S. at 689-92. Justice Harlan conceived of two exceptions to the general rule of non-retroactivity on collateral review. The first exception is for new substantive rules that place “certain kinds of primary, private individual conduct beyond the power of the criminal law-making authority to proscribe.” Mackey, 401 U.S. at 692. Justice Harlan reasoned that substantive rules lessen the interest in finality because “[t]here is little societal interest in permitting the criminal process to rest at a point where it ought properly never to repose.” Mackey, 401 U.S. at 693. Moreover, because conduct that is no longer punishable cannot be retried, overturning a conviction based on a substantive rule does not tax the state through requiring another trial. Substantive rules also echo the historic availability of habeas corpus to attack a court’s jurisdiction to imprison a person. Mackey, 401 U.S. at 692-93.
¶15 Justice Harlan’s second exception encapsulates procedural rules that are “implicit in the concept of ordered liberty” and “alter our understanding of the bedrock procedural elements” necessary to the fairness and accuracy of a conviction. Mackey, 401 U.S. at 693 (citation omitted); Desist, 394 U.S. at 262, 89 S. Ct. at 1041. Justice Harlan offered the rule from Gideon v. Wainwright, 372 U.S. 335, 345, 83 S. Ct. 792, 806 (1963) (requiring that an indigent defendant be provided counsel), as an example of a rule satisfying this exception. Mackey, 401 U.S. at 694.
¶16 In Griffith v. Kentucky, 479 U.S. 314, 107 S. Ct. 708 (1987), the United States Supreme Court adopted the first leg of Justice Harlan’s framework, stating that any newly-announced constitutional rule will apply to cases still pending on direct review. Griffith, 479 U.S. at 328, 107 S. Ct. at 716. Then, in Teague v. Lane, 489 U.S. 288, 109 S. Ct. 1060 (1989), a plurality of the Court adopted the remainder of Justice Harlan’s framework, holding that new rules generally will not apply retroactively to cases on collateral review. Teague, 489 U.S. at 310, 109 S. Ct. at 1075. A rule is new when “not dictated by precedent existing at the time the ... conviction became final.” Teague, 489 U.S. at 301, 109 S. Ct. at 1070 (emphasis in original). Echoing Justice Harlan, after Teague, “[a] new rule applies retroactively in a collateral proceeding only if (1) the rule is substantive or (2) the rule is a watershed rul[e] of criminal procedure implicating the fundamental fairness and accuracy of the criminal proceeding.” Wharton v. Bockting, 549 U.S. 406, 416, 127 S. Ct. 1173, 1180 (2007) (internal quotation marks and citations omitted).
¶17 Although this framework originally focused on the retroactivity of rules used to attack convictions, the Supreme Court has refined the framework in cases attacking sentences. In Penry v. Lynaugh, 492 U.S. 302, 109 S. Ct. 2934 (1989), Penry argued on collateral review that the Eighth Amendment prohibits imposing the death penalty on an intellectually disabled person. Penry, 492 U.S. at 328, 109 S. Ct. at 2952. Before reaching the merits of that claim, the Court conducted the Teague retroactivity analysis. The Court noted that Justice Harlan’s description of a substantive rule — one that places “certain kinds of primary, private individual conduct beyond the power of the criminal law-making authority to proscribe” — is phrased in terms of “substantive categorical guarantees accorded by the Constitution, regardless of the procedures followed.” Penry, 492 U.S. at 329, 109 S. Ct. at 2952 (emphasis added). Because, in the context of sentencing, rules that “deprivet ] the State of the power to impose a certain penally” or prohibit a “certain category of punishment for a class of defendants because of their status or offense” also are categorical guarantees, the Court determined that these types of sentencing rules are substantive. Penry, 492 U.S. at 329-30, 109 S. Ct. at 2952-53. The Court accordingly concluded that Penr/s claim called for a substantive rule not subject to the general rule of non-retroactivity. Penry, 492 U.S. at 330, 109 S. Ct. at 2953.
¶18 By contrast, the Court has held that sentencing rules that do not “prohibit the imposition of [a particular sentence] on a particular class of persons” are not substantive. Saffle v. Parks, 494 U.S. 484, 495, 110 S. Ct. 1257, 1263-64 (1990) (concluding that a prohibition against instructing a death penalty jury to avoid sympathy when determining punishment is not a substantive rule). See also Sawyer v. Smith, 497 U.S. 227, 242, 110 S. Ct. 2822, 2831 (1990) (concluding that the substantive rule exception “has no application” to a new rule prohibiting the imposition of capital punishment by a jury that has been led to believe that the ultimate decision to impose the death penalty rests elsewhere).
¶19 The United States Supreme Court further clarified the scope of the exceptions to the general rule of non-retroactivity for sentencing rules in Schriro v. Summerlin, 542 U.S. 348, 124 S. Ct. 2519 (2004). The offender in that case sought to benefit from the rule announced in Ring v. Arizona, 536 U.S. 584, 122 S. Ct. 2428 (2002), requiring that a juiy rather than a judge find aggravating factors necessary to impose a death sentence. Schriro, 542 U.S. at 351, 122 S. Ct. at 2522. The Schriro Court stated, “A rule is substantive rather than procedural if it alters the range of conduct or the class of persons that the law punishes.... In contrast, rules that regulate only the manner of determining the defendant’s culpability are procedural.” Schriro, 542 U.S. at 353, 124 S. Ct. at 2523 (emphasis in original). Substantive sentencing rules that “place particular conduct or persons covered by the statute beyond the state’s power to punish” are retroactive because they “necessarily carry a significant risk” that the offender “faces a punishment that the law cannot impose upon him.” Schriro, 542 U.S. at 352, 124 S. Ct. at 2522-23 (internal quotation marks and citation omitted). The Court concluded that the Ring rule was not substantive because “the range of conduct punished by death ... was the same before Ring as after.” Schriro, 542 U.S. at 354, 124 S. Ct. at 2524.
¶20 The Court instead determined that the Ring rule was procedural because it “altered the range of permissible methods for determining whether a defendant’s conduct is punishable by death.” Schriro, 542 U.S. at 353, 124 S. Ct. at 2523. The Court held that the Ring rule was not a watershed procedural rule, however, because it did not create an “impermissibly large risk” of inaccuracy. Schriro, 542 U.S. at 356, 124 S. Ct. at 2525 (citations omitted). The Schriro Court’s determination that the Ring rule was not watershed is consistent with its application of that exception. Since adopting Justice Harlan’s framework in 1989, the Supreme Court has never concluded that a new rule fits into the watershed procedural rule exception, and has stated that it is “unlikely” it ever will. Teague, 489 U.S. at 313, 109 S. Ct. at 1077. During that time, the Supreme Court has provided only one example of a rule that meets the watershed procedural rule exception — the rule announced in Gideon.
B.
¶21 The Montana Supreme Court has applied the federal retroactivity framework since State v. Egelhoff, 272 Mont. 114, 125-27, 900 P.2d 260, 267 (1995). For example, in State v. Whitehom, 2002 MT 54, 309 Mont. 63, 50 P.3d 121, we examined the retroactivity of the rule we announced in State v. Guillaume, 1999 MT 29, 293 Mont. 224, 975 P.2d 312.
¶22 Guillaume held that applying a weapons enhancement statute on top of an offense that already includes use of a weapon in the elements of the offense is unconstitutional under Montana’s double jeopardy clause. Guillaume, ¶ 16. In Whitehom, after surveying the federal retroactivity framework, we held that Guillaume was retroactive because it created a substantive rule: the rule prohibited imposition of a certain punishment (an additional punishment for use of a weapon) on a particular class of offenders (offenders who already had been punished for the same conduct). Whitehom, ¶¶ 36-42.
¶23 This Court’s Egelhoff decision appears to have assumed that the United States Constitution requires state courts to apply the federal retroactivity framework. See Egelhoff, 272 Mont. at 125, 900 P.2d at 267 (“With regard to the question of retroactivity, the United States Supreme Court has additionally made its position more clear and we find this also to be binding upon us.”). In Danforth v. Minnesota, 552 U.S. 264, 128 S. Ct. 1029 (2008), the United States Supreme Court clarified that its retroactivity analysis need not be followed by state courts. Danforth, 552 U.S. at 280-81, 128 S. Ct. at 1041. Danforth noted that Egelhoff placed this Court among three state high courts that incorrectly concluded that states must apply the federal retroactivity framework. Danforth, 552 U.S. at 281 n.17, 128 S. Ct. at 1042 n.17. Nonetheless, we have continued to apply the federal framework in the years since Danforth. In Reichmatid, 2010 MT 228, 358 Mont. 68, 243 P.3d 423, we recognized this Court’s “right to craft its own unique retroactivity jurisprudence, using federal requirements as a floor,” before employing the Griffith principle that rules are retroactive on direct review to address a claim under a state constitutional right. Reichmand, ¶¶ 13-15. Just recently, in State v. Cook, 2012 MT 34, 364 Mont. 161, 272 P.3d 50, we recognized the distinction between substantive and procedural rules for purposes of determining retroactivity on collateral review. Cook, ¶ 17. We applied the federal framework to determine that the rule the petitioner invoked was not retroactive because, although it was new and procedural, it was not watershed. Cook, ¶¶ 17-19.
¶24 Against this backdrop of faithful application, Beach has not made a principled argument for departing from the United States Supreme Court’s retroactivity framework to resolve his petition. In both his briefs and in oral argument, Beach focused on showing that Miller is retroactive under the federal retroactivity framework. Beach’s briefing on applying a state-specific retroactivity standard is scant, and his oral argument raised the possibility of a different standard only briefly, in rebuttal to the State’s argument. In neither his briefs nor in oral argument did Beach specify what standard we should apply if not the retroactivity standard we have applied in previous cases.
¶25 In the limited argument Beach has developed on departing from the retroactivity framework, he has suggested that Miller should be applied retroactively to his case because Miller implicates fundamental rights found in Article II, Sections 15 and 22 of the Montana Constitution. Beach also recounts Whitehom’s comment that “it is illogical for this Court to refuse to extend constitutional protections to citizens simply because their claims are raised by collateral review rather than hy way of direct appeal.” Whitehom, ¶ 42. He fails to note, however, the very next line in that opinion: “Accordingly, we conclude that ... this Court erred in failing to recognize and apply the foregoing case law that distinguishes a procedural rule from a substantive rule when addressing retroactivity” Whitehorn, ¶ 42 (emphasis added). In Whitehorn, we applied the federal retroactivity framework, recognizing the illogic of not applying substantive rules retroactively when that would permit “the criminal process to rest at a point where it ought properly never to repose.” Mackey, 401 U.S. at 693 (Harlan, J., dissenting).
¶26 Beach has failed to explain why the cited provisions of the Montana Constitution require a different retroactivity model for Miller. See State v. Covington, 2012 MT 31, ¶ 21, 364 Mont. 118, 272 P.3d 43. Beach has further failed to address why Miller requires retroactive application in light of the interests that collateral review affects and the purposes that it serves. We are not obligated to develop legal analysis that may lend support to an appellant’s arguments. In re Estate of Bayers, 1999 MT 154, ¶ 19, 295 Mont. 89, 983 P.2d 339 (1999).
¶27 Two of today’s dissenting opinions develop their own legal analyses, each proffering a new path for determining retroactivity not advanced by Beach. Justice Wheat offers an ad hoc approach, suggesting that the Court simply compare the interests of fairness and finality to determine the retroactivity of the rule invoked in this case. Dissent, ¶ 60. But his Dissent does not offer a measure by which to compare these interests. Nor does it acknowledge the aspects of fairness that the interest in finality subsumes — stability in the law, timely resolution of disputes, and closure for everyone involved in a case, including victims. Dissent, ¶¶ 63-65; see Mackey, 401 U.S. at 691 (Harlan, J., dissenting) (“No one, not criminal defendants, not the judicial system, not society as a whole is benefited by a judgment providing a man shall tentatively go to jail today, but tomorrow and every day thereafter his continued incarceration shall be subject to fresh litigation on issues already resolved.”). The logical conclusion of Justice Wheat’s approach is that a conviction would never be final in this state until a reviewing court deems it “fair” to so declare.
¶28 Meanwhile, Justice Shea would embark on a novel state-specific approach to retroactivity by overruling several prior decisions of this Court. He posits that those decisions perpetuated Egelhoffs mistaken assumption that we are bound to apply the federal retroactivity framework. Dissent, ¶ 97. Justice Shea faults the Court’s analysis in Reichmand, but overlooks our express, and correct, observation in that case that Danforth permits this Court to adopt any retroactivity standard with regard to state constitutional rights. Reichmand, ¶ 13. In Reichmand, we examined the retroactivity of a new rule affecting a state constitutional right. Reichmand, ¶ 2. After acknowledging our ability to choose any standard, we applied the federal retroactivity framework to that state right. Reichmand, ¶ 15. We did likewise in Cook, where we reaffirmed that “[Retroactive application is needed in situations that ‘necessarily carry a significant risk that a defendant stands convicted of an act that the law does not make criminal’ or faces a punishment that the law cannot impose upon him.” Cook, ¶ 17 (quoting Schriro, 542 U.S. at 351, 124 S. Ct. at 2522-23). It cannot be said that the Court did not “voluntarily” make the federal retroactivity framework its own in these two cases. Dissent, ¶ 100.
¶29 Most importantly, Justices Wheat and Shea’s respective theories could have been, but were not, argued by Beach. As a result, this Court has not had the benefit of the State’s position on the approaches that Justices Wheat and Shea would have us adopt. Under this Court’s policy of stare decisis, we keep faith with precedent “unless it is demonstrably made to appear that” our precedent “manifestly is wrong.” State ex rel. Perry v. Dist. Ct., 145 Mont. 287, 310, 400 P.2d 648, 660 (1965) (citation omitted). The burden of this demonstration is on the party seeking to overturn the precedent. See In re McCabe, 168 Mont. 334, 337, 544 P.2d 825, 827 (1975) (notingthe petitioner’s failure to “demonstrate any sufficient reason for this Court to overturn” its prior construction); see also U.S. v. Infl Bus. Mach. Corp., 517 U.S. 843, 856, 116 S. Ct. 1793, 1801 (1996) (“Though from time to time we have overruled governing decisions that are unworkable or are badly reasoned, we have rarely done so on grounds not advanced by the parties.”) (internal citations and quotations omitted). Beach has not met his burden to so demonstrate, and it would be unwise for this Court to depart from long-settled precedent to apply an analysis that has not been developed or tested by the parties to the case. The Court accordingly will apply the same retroactivity framework in this case that it has applied to every previous collateral review case since Teague was decided.
IV.
A.
¶30 Before getting to the retroactivity of the rule Beach invokes, we must first establish that he, in fact, invokes a new rule. Beach argues that, under Miller, a sentencer must consider a juvenile’s youth before sentencing that juvenile to life without parole. The State responds that Miller does not establish this rule. Instead, the State argues, Miller merely bars the mandatory imposition of a life without parole sentence on a juvenile. The State suggests that Miller's language about required sentencing considerations is dicta.
¶31 Dictum is “[a]n opinion by a court... that is not essential to the decision and therefore not binding even if it may later be accorded some weight.” Black’s Law Dictionary 549 (Bryan A. Gamer ed., 10th ed. 2009). Miller's statements about required sentencing considerations are not dicta. The Miller Court held that mandatory imposition of a life sentence is unconstitutional because a mandatory scheme prevents a sentencer from considering how a juvenile’s youth affects the proportionality of that sentence, and the Eighth Amendment requires a sentencer to so consider. The Supreme Court could not have been clearer when it said, “Although we do not foreclose a sentencer’s ability to [impose life without parole] in homicide cases, we require it to take into account how children are different, and how those differences counsel against irrevocably sentencing them to a lifetime in prison.” Miller, 567 U.S. at_, 132 S. Ct. at 2469.
¶32 We think it clear that Miller establishes two rules. First, sentencing schemes that mandate life incarceration without the possibility of parole for juvenile offenders are unconstitutional. Miller, 567 U.S. at_, 132 S. Ct. at 2469. Second, a sentencer must “follow a certain process” before imposing a life without parole sentence on a juvenile. Miller, 567 U.S. at_, 132 S. Ct. at 2471. Beach invokes the second rule.
¶33 Under the retroactivity framework, new rules are treated differently from old rules. See Penry, 492 U.S. at 319, 109 S. Ct. at 2947. An offender on collateral review generally cannot benefit from a new rule, whereas she can benefit from an old rule. Teague, 489 U.S. at 310, 109 S. Ct. at 1075. A rule is new unless dictated by precedent existing at the time the offender’s conviction became final. Teague, 489 U.S. at 301, 109 S. Ct. at 1070.
¶34 Beach has omitted argument on this point, seemingly conceding the novelty of Miller's sentencing consideration rule. Indeed, Miller rests on the twin recognitions that (1) children are different for sentencing purposes, and (2) life sentences without the possibility of parole are similar to death sentences when imposed on juveniles. See Miller, 567 U.S. at_, 132 S. Ct. at 2463-66. The Supreme Court did not frilly recognize these principles until Roper in 2005 and Graham in 2010. Beach’s conviction became final in 1985. Although the case law existing in 1985 may have foreshadowed Miller'a sentencing consideration rule, see Eddings v. Oklahoma, 455 U.S. 104, 115, 102 S. Ct. 869, 877 (1982), these cases certainly did not dictate or compel such a rule. We conclude that Miller's sentencing consideration rule is a new rule, subject to the general rule of nonretroactivity on collateral review.
B.
¶35 A new rule is not retroactive on collateral review unless it is a substantive rule or a watershed procedural rule. Teague, 489 U.S. at 310-11, 109 S. Ct. at 1075-76. Since 2012, many state and lower federal courts have wrestled with Miller’s retroactivity. These courts appear to agree that Miller creates a new rule subject to the general rule of non-retroactivity. See, e.g., In re Morgan, 713 F.3d 1365, 1366-67 (11th Cir. 2013); Diatchenko v. Dist. Atty. for Suffolk Dist., 466 Mass. 655, 667 (2013). The courts diverge, however, on whether Miller fits into one of the exceptions to the general rule. Courts that have held Miller retroactive generally conceive of Miller as creating a substantive rule. See, e.g., Illinois v. Davis, 6 N.E.3d 709, 722 (Ill. 2014); Iowa v. Ragland, 836 N.W.2d 107, 117 (Iowa 2013). By contrast, courts that have held Miller non-retroactive generally conceive of Miller as creating a procedural rule, but not a watershed procedural rule. See, e.g., Michigan v. Carp 496 Mich. 440, 495 (2014); Pennsylvania v. Cunningham, 81 A.3d 1, 26-29 (Pa. 2013).
¶36 Most of these courts have been concerned with whether Miller's prohibition on mandatory life without parole sentences is retroactive. See, e.g., Davis, 6 N.E.3d at 723; Carp, 496 Mich. at 483 n.13. But see Aiken v. Byars, 410 S.C. 534, 543-44 (2014). Because Miller's mandatory sentencing rule has no application in Montana, the ensuing analysis does not concern — at least directly — the retroactivity of that rule. We focus instead on the retroactivity of Miller's rule requiring consideration of a juvenile offender’s youth before imposing a life without parole sentence.
¶37 Beach includes only one sentence in his brief suggesting that Miller’s sentencing consideration rule may represent a watershed procedural rule. Beach instead has focused his retroactivity argument on showing that the Miller rule is substantive. The strategy makes sense considering that the United States Supreme Court effectively has interpreted the watershed procedural rule exception asa “null set.” R. Fallon, J. Manning, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 1246 (6th ed. 2009); see also Sepulveda v. United States, 330 F.3d 55, 61 (1st Cir. 2003) (watershed procedural rules under the federal retroactivity framework are “hen’s-teeth rare”). The Supreme Court continuously has equated the watershed procedural rule exception with Gideon and Gideon alone. In this context, we cannot say that Miller*3 rule is a watershed procedural rule. Montana always has permitted a sentencer to consider a juvenile offender’s youth when sentencing that offender to a term of years with no possibility of parole. Miller’s rule merely goes a step further by requiring that consideration. The rule’s effect on the fairness and accuracy of a criminal proceeding is not on par with Gideon. Accordingly, Miller*s sentencing consideration rule is not a watershed procedural rule.
¶38 Justice Cotter agrees with Beach that Miller announced a new substantive rule. Dissent, ¶ 115. A substantive sentencing rule is a rule that “prohibits] a certain category of punishment for a class of defendants because of their status or offense.” Penry, 492 U.S. at 330, 109 S. Ct. at 2953. In other words, a substantive sentencing rule is a “categorical guarantee]] accorded by the Constitution, regardless of the procedures followed,” Penry, 492 U.S. at 329, 109 S. Ct. at 2952, that “placets] particular conduct or persons covered by the statute beyond the state’s power” to subject to a particular punishment, Schriro, 542 U.S. at 352, 124 S. Ct. at 2522-23. In Miller, the Supreme Court specifically stated that it did “not categorically bar a penalty for a class of offenders or type of crime,” and instead mandated “only that a sentencer follow a certain process ... before imposing” life without parole on a juvenile. Miller, 367 U.S. at_, 132 S. Ct. at 2471 (emphases added). Miller did not hold that juvenile life without parole sentences are categorically unconstitutional. Miller, 367 U.S. at_, 132 S. Ct. at 2469. Miller “dictated what process must take place before a life-without parole sentence could be imposed, [but] it did not prohibit a state from imposing that penalty on a certain class of offenders.” 7 W. Lafave, J. Israel, N. King, & O. Kerr, Criminal Procedure § 28.6(e) (3rd ed. 2007,2014-2015 supplement).
¶39 Beach’s own summary of Miller defeats his suggestion that Miller is substantive. “Miller,” he explains, “prohibits a particular punishment (life-without-parole) for a class of defendants (juveniles) unless specific youth related factors are first considered.” (Emphasis added.) In other words, under Miller, a sentencing court retains the constitutional authority to sentence a juvenile to life without parole. If Beach’s case were remanded for sentencing, a sentencing judge, upon following Miller’s sentencing consideration rule, could resentence Beach to the exact same sentence he received before. This differs from a substantive rule. For instance, regardless of the procedures followed, a sentencer after Graham could not resentence a juvenile non-homicide offender to life without parole; a sentencer after Roper could not resentence a juvenile to the death penalty; a sentencer after Atkins could not resentence an intellectually disabled offender to the death penalty; and a sentencer after Kennedy could not resentence a non-homicide offender to the death penalty. Because Millers sentencing consideration rule “regulates only the manner of determining” a sentence by requiring a certain process, and does not alter the range of punishment that Beach could receive, Schriro, 542 U.S. at 353, 124 S. Ct. at 2523, it is procedural and not substantive.
¶40 Beach seeks to forestall this conclusion by reframing the required considerations under Miller as “elements” of a life without parole sentence imposed on a juvenile. The case on which Justice Cotter relies, Dissent ¶¶ 118-20, sounds a similar theme. See In re Willover, No. HO40757,2015 Cal. App. LEXIS 322, *20-21 (stating that Miller created “a rule that sets forth the specific considerations to be made during a sentencing decision” of a juvenile homicide offender). An element is a certain fact that is essential to an offense or punishment. See Alleyne v. United States, 570 U.S._,_, 133 S. Ct. 2151, 2155 (2013). By its terms, Miller requires only that a sentencer consider certain factors; it does not make the finding of “certain fact[s] essential” to a life without parole sentence. Schriro, 542 U.S. at 354, 124 S. Ct. at 2524.
¶41 The logical conclusion to Beach’s elements argument is that any new rule that conditions the imposition of a particular sentence on a particular procedure would be considered substantive. But that does not comport with cases holding such rules to be procedural only. See Beard v. Banks, 542 U.S. 406, 420, 124 S. Ct. 2504, 2515 (2006) (finding non-retroactive a rule prohibiting imposition of the death penalty by jury unless the jury can consider all mitigating factors); Schriro, 542 U.S. at 354, 124 S. Ct. at 2524 (concluding that a rule prohibiting imposition of the death penalty unless elements of that sentence are found by a jury is procedural and not substantive); Sawyer v. Smith , 497 U.S. at 242, 110 S. Ct. at 2831 (finding non- substantive a rule that prohibits the imposition of the death penalty by a sentencer under the mistaken belief that responsibility for determining the propriety of the death penalty rests elsewhere). In all of these cases, just as in Beach’s case, the examined rules did not “prohibit!! ] a certain category of punishment for a class of defendants because of their status or offense,” Penry, 492 U.S. at 330, 109 S. Ct. at 2953 — the rules instead prohibited a certain category of punishment unless the sentencer followed a prescribed process. This demonstrates a significant difference from the Willover case. The court in Willover determined that, “Because petitioner was sentenced at a time when the prevailing case law required a presumption of [life without parole], there is a ‘significant risk’ that petitioner Taces a punishment that the law cannot impose upon him.’ ” In re Willover, 2015 Cal. App. LEXIS 322 at *21. No such presumption existed in Montana law at the time Beach was sentenced.
¶42 Finally, if the Miller considerations are elements of a life without parole sentence, Beach does not explain how his proposed solution to the constitutional infirmity of his sentence — resentencing by a judge who must consider these elements — is any more constitutional than his original sentence, considering that all elements necessary to raise the maximum allowable sentence for a crime must be found by a jury, not by a judge. See Apprendi v. New Jersey, 530 U.S. 466, 476, 120 S. Ct. 2348, 2355(2000).
C.
¶43 Beach makes three more arguments, all of which may bear on the Miller rule’s retroactivity in general, but do not bear directly on whether the Miller rule fits into one of the retroactivity framework’s exceptions.
¶44 First, Beach notes that the companion case in Miller was Jackson v. Hobbs, an appeal by a prisoner on collateral review. Because Jackson benefitted from Miller, and Beach is similarly situated to Jackson on collateral review, Beach argues that fairness dictates that he too should benefit from Miller*a rule.
¶45 Retroactivity, however, is an affirmative defense to be raised by the government. “[A] federal court may, but need not, decline to apply [the retroactivity framework] if the [s]tate does not argue it.” Caspari v. Bohlen, 510 U.S. 383, 389, 114 S. Ct. 948, 953 (1994). Arkansas (the state responding to Jackson’s petition for habeas corpus) did not argue to the Supreme Court that the rule Jackson sought was non- retroactive. Given this omission, the Supreme Court did not examine or decide the retroactivity of the Miller rule. Arkansas’s waiver of its retroactivity defense in Jackson’s appeal does not mean that the Supreme Court determined that Miller is retroactive.
¶46 Second, Beach argues that Miller is retroactive because the cases upon which it relies are retroactive. Beach is correct that Roper and Graham are retroactive as substantive rules. See, e.g., In re Sparks, 658 F.3d 257, 262 (5th Cir. 2011) (concluding that Graham is substantive and retroactive); Little v. Dretke, 407 F. Supp. 2d 819, 823-24 (W.D. Tex. 2005) (concluding that Roper is substantive and retroactive). Roper and Graham are similar to Kennedy and Atkins in that they “categorically bar a penalty for a class of offenders or type of crime.” Miller, 367 U.S. at_, 132 S. Ct. at 2471. But Miller explicitly disclaimed creating a categorical bar to a type of punishment. Miller, 367 U.S. at_, 132 S. Ct. at 2471. In its effect, Miller more closely resembles two of the other cases upon which it relied — Woodson and Lockett, which invalidated mandatory death penalty sentences and required individualized sentencing. Lockett, 438 U.S. at 604,98 S. Ct. at 2964-65; Woodson, 428 U.S. at 303-05,96 S. Ct. at 2991-92. Beach has not identified any cases holding that Woodson and Lockett qualify as retroactive under the current retroactivity framework.
¶47 Third, Beach argues that it would be unjust to permit offenders on direct review to benefit from Miller but not to afford the same benefit to offenders on collateral review. In a case Beach cited as supplemental authority, and quoted in oral argument, the California Court of Appeal for the Second Judicial District made a similar point:
We find particularly troubling the apparent inequity that would arise if the prospect of an individualized, discretionaiy judicial determination of whether a juvenile murderer should be afforded parole eligibility would depend solely upon the happenstance of the precise moment that the defendant’s conviction became final. No court that has rejected the retroactive application ofMi/Zer has advanced a rationale to resolve this inequity.
In re Wilson, 233 Cal. App. 4th 544, 567 (2015). With this argument, the California court and Beach fail to recognize two things. First, Miller’s non-retroactivity is no more inequitable than the nonretroactivity of the rules in Beard, Schriro, or Sawyer, all of which similarly involved procedures meant to ensure the accuracy of sentences, yet involved the harshest of punishments — the death penalty. Second, the concept of equity between offenders on direct and collateral review does not stand in a vacuum. For instance, Justice Wheat’s protest that it is unfair to not apply Miller by virtue of the “mere[]” timing of Beach’s conviction, Dissent, ¶ 73, ignores the unfairness of re-opening this case after a “mere” thirty years have passed without closure for the victim’s family. The law strikes a balance between the interests of equity among offenders and finality of convictions. That balance is embodied in the principles of retroactivity that we have applied in our prior cases and that we apply again today.
CONCLUSION
¶48 Because the Miller sentencing consideration rule is new and is neither a substantive rule nor a watershed procedural rule, we conclude that it is not retroactive to Beach’s claim on collateral review. Retroactivity is a threshold issue, Teague, 489 U.S. at 300, 109 S. Ct. at 1070, and Beach does not pass the threshold. Accordingly, we do not reach the merits in this case.
ORDER
¶49 The petition for writ of habeas corpus is denied.
DATED this 5th day of May, 2015.
JUSTICE RICE and DISTRICT JUDGE WHEELIS, sitting for CHIEF JUSTICE McGRATH concur.
In this opinion, juvenile" refers to a person who committed a crime when under the age of eighteen.
In this opinion, we assume without deciding that Beach was sentenced to the equivalent of life without parole.
Justice Harlan’s dissent in Mackey was never printed in the Supreme Court Reporter. We cite only to where it appears in the United States Reports.
In Montana, direct review occurs when an offender is convicted by a state court and, in the months following that conviction, appeals her decision to the Montana Supreme Court and (if federal issues are involved) seeks appeal with the United States Supreme Court. Under Justice Harlan’s framework, a rule announced by the United States Supreme Court will benefit an offender while her claim is still pending on direct review. After an offender exhausts direct review, her claim becomes final, and she thereafter may seek only collateral review. Collateral review has two stages. In the first stage, the offender may petition Montana courts, including this Court, for collateral review (usually styled as a petition for postconviction relief, but sometimes, as in this case, styled as a petition for a writ of habeas corpus), and may appeal this Court’s decision on federal issues to the United States Supreme Court. In the second collateral review stage, the offender may seek federal habeas corpus review on federal issues from a federal district court, a federal court of appeals, and the United States Supreme Court. Under Justice Harlan’s framework, a new rule announced after an offender’s conviction has become final — when only collateral review remains — generally will not apply retroactively to benefit an offender.
We recognize that courts (including this Court and the United States Supreme Court) have struggled with whether a substantive rule is an exception to the general rule of non-retroactivity, or whether the general rule of non-retroactivity simply does not apply to substantive rules. See Schriro v. Summerlin, 542 U.S. 348, 351 n.4, 124 S. Ct. 2519, 2523 n.4 (2004); State v. Whitehorn, 2002 MT 54, ¶ 37, 309 Mont. 63, 43 P.3d 922 (2002). We think this a distinction without significance. In this opinion, we refer to substantive rules as exceptions to the general rule of non-retroactivity.
Reichmand also suggested that “the U.S. Supreme Court’s retroactivity analysis for federal constitutional errors is binding upon the states when federal constitutional errors are involved.” Reichmand, ¶ 13 (emphasis in original). This statement is correct to the extent that it means that the federal doctrine effectively sets the floor for the retroactivity of federal rights in Montana. But this statement should not be taken to mean that this Court cannot provide greater retroactivity to federal rights than permitted under the federal standard — under Danforth, we are not required to employ the federal retroactivity analysis for either federal or state rights.
The Dissent’B reference to State v. Maine, 2011 MT 90, 360 Mont. 182, 255 P.3d 64, does not bolster its analysis. Our decision in Maine was supported by precedent going back decades. Maine, ¶ 45 (Baker, J., concurring). In this case, our precedent, reaffirmed most recently in Reichmand and Cook, dictates a result in conflict with what Justice Shea proposes. In addition, Maine addressed arguments squarely presented and briefed by the parties. Maine, ¶ 27.
It stands to reason that jurisdictions that at one time mandated juvenile life without parole sentences have more offenders who stand to benefit from Miller and to litigate its retroactivity.
Justice Wheat’s Dissent appears to agree, Dissent, ¶ 54, and Justice Shea’s Dissent does not appear to take issue with this analysis.
See Brief for Respondent, Jackson v. Hobbs, http://perma.cc/7bz4-vfyc (U.S. 2012) (No. 10-9647).
Beach cites Sumner v. Shuman, 483 U.S. 66, 72, 107 S. Ct. 2716, 2727 (1987) (invalidating a statute mandating a death sentence for a prisoner who kills someone while serving a life sentence), as an example of an instance when Woodson and Lockett were applied retroactively on collateral review. But Sumner does not address retroactivity under the current framework; indeed, Sumner does not appear to address a retroactivity argument at all. Moreover, Woodson was announced before Sumner’s conviction became final, meaning Woodson was not applied retroactively in Sumner. Beach also cites Campbell v. Blodgett, 978 F.2d 1502 (9th Cir. 1992), Thigpen v. Thigpen, 926 F.2d 1003 (11th Cir. 1991), and McDougall v. Dixon, 921 F.2d 518 (4th Cir. 1990), to show Sumner’s retroactive application, but none of these cases appear to address Sumner’s retroactivity.
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court.
¶1 Corey Hansen appeals from the District Court’s orders denying leave to file an amended complaint and granting summary judgment to the Bozeman Police Department. We affirm.
¶2 Hansen presents the following issues for review:
¶3 Issue One: Did the District Court err in denying Hansen’s motion for leave to file an amended complaint?
¶4 Issue Two: Did the District Court properly grant summary judgment to the Bozeman Police Department?
BACKGROUND
¶5 Corey Hansen is a veteran who suffers from service-connected physical conditions, including a seizure disorder. He has a service dog that alerts him to oncoming seizures. In 2011 Hansen and a few friends planned a visit to the C’Mon Inn, a hotel in Bozeman, Montana. Hansen had a reservation and had stayed at the hotel with his service dog in the past. He left copies of the certification papers for his service dog on file at the hotel. Those papers were still on file in September 2011 when Hansen arrived to check in, accompanied by his service dog wearing the appropriate identification vest.
¶6 The CMon Inn staff refused to allow Hansen to register at the hotel because he was accompanied by his service dog. The hotel’s reason for excluding Hansen was that dogs are not allowed on the premises. This refusal persisted after Hansen explained that he had a disability that required the presence of the service dog; that the presence of the service dog had been noted when the reservation was made; that he had stayed there in the past with his dog; and that the dog’s papers were on file at the hotel. Eventually Hansen called 911 and complained that the hotel was violating his rights and discriminating against him by refusing him entry. A hotel employee also called 911 to ask that Hansen be removed from the premises.
¶7 Three Bozeman Police Department officers responded. They first interviewed Hansen and his friends, and then the CMon Inn manager. The manager claimed that Hansen had become “disorderly” when employees questioned him about his service dog and asked that Hansen be removed from the premises. The officers told Hansen that he would have to leave, but suggested other motels that would allow him to stay with his dog and obtained a CMon Inn business card so that Hansen could file a complaint if he wished.
¶8 Hansen filed a complaint against the hotel with the Montana Human Rights Bureau. After an investigation and an evidentiary hearing, the hearing examiner determined that the CMon Inn had discriminated against Hansen and had violated his rights under the Montana Human Rights Act. The hearing examiner awarded Hansen $15,000 in damages against the CMon Inn.
¶9 Hansen filed a separate Human Rights complaint against the Bozeman Police Department. The Human Rights Bureau investigated and concluded that the police did not discriminate against him. The Human Rights Commission upheld that conclusion and issued a right to sue notice. Hansen filed the present action against the Bozeman Police Department, contending that the responding officers themselves violated the Human Rights Act when they “aided, abetted and facilitated” the CNIon Inn’s discrimination against him.
¶10 Hansen appeals from the District Court’s refusal to allow him to amend his complaint and from the subsequent order granting summary judgment to the Bozeman Police Department. We affirm.
STANDARD OF REVIEW
¶11 This Court reviews a district court’s decision on a motion under Rule 15, M. R. Civ. P. to file an amended pleading to determine whether there was an abuse of discretion. Seamster v. Musselshell County Sheriffs Office, 2014 MT 84, ¶ 6, 374 Mont. 358, 321 P.3d 829.
¶12 This Court reviews a district court’s decision on a motion for summary judgment de novo, using the same criteria as the district court under Rule 56 M. R. Civ. P. Passmore v. Watson, 2014 MT 287, ¶ 9, 376 Mont. 529, 337 P.3d 84.
DISCUSSION
¶13 Issue One: Did the District Court err in denying Hansen’s motion for leave to file an amended complaint?
¶14 Hansen filed the complaint in this action on October 18,2012, and moved for leave to file an amended complaint on June 3, 2014, proposing to include a new claim that the Bozeman Police Department negligently trained and supervised its officers. The deadlines for the close of discovery and for amendment of pleadings had been set in a stipulated scheduling order and had already passed. Hansen contended that he did not learn of the facts to support the new claim until he deposed the responding officers the last day of the discovery period. Bozeman objected to the motion.
¶15 The District Court concluded that Hansen had unduly delayed both deposing the officers and filing the motion to amend. Further, Hansen’s claims had been through two Human Rights proceedings, including investigations and a hearing. The District Court therefore concluded that Hansen’s claim that he did not have information on a failure to train issue was “disingenuous.” Additionally, while Hansen did not request a new pretrial scheduling order, the new claim would require additional discovery and designation of expert witnesses. The District Court determined that the motion for leave to amend was therefore untimely and prejudicial to Bozeman, and should he denied.
¶16 We find that the District Court thoroughly considered the positions of the parties and the context of the case to determine that leave to amend should not be granted. Determining whether to grant leave to amend is within the discretion of a district court, which acts arbitrarily if it acts without employing conscientious judgment, or exceeds the bounds of reason in view of all the circumstances. Campbell v. Bozeman Investors, 1998 MT 204, ¶ 34, 290 Mont. 374, 964 P.2d 41. Hansen has not demonstrated that the District Court abused its discretion, and the decision to deny leave to file the amended complaint is affirmed.
¶17 Issue Two: Did the District Court properly grant summary judgment to the Bozeman Police Department?
¶18 Hansen’s complaint alleged two claims for relief: that the responding officers discriminated against him by violating § 49-2-302, MCA (part of the statutes referred to as the Montana Human Rights Act), and by violating the Federal Americans With Disabilities Act. The District Court granted summary judgment to Bozeman on both claims, concluding that neither Act required that the officers enforce Hansen’s asserted rights against the C’Mon Inn. The essential facts are not in dispute and therefore there is only an issue of law.
¶19 Montana law provides that it is an unlawful discriminatory practice for a public accommodation to refuse service to a person “because of a physical or mental disability.” Section 49-2-304, MCA. As noted, the Human Rights Bureau, in a separate proceeding and after hearing, determined that the C’mon Inn violated § 49-2-304, MCA, by refusing to provide a room to Hansen. Hansen contends that the Bozeman police officers were required to materially assist him at the scene in his dispute with the hotel personnel. At the hearing on summary judgment, Hansen’s attorney argued that the officers responded to the situation with the wrong attitude, that they did not try to get the hotel to reconsider its position, and that they did an inadequate investigation. He did not contend that the officers should have forced the hotel to give Hansen a room. The officers, he said, were required “to at least attempt to enforce his rights.”
¶20 The District Court considered these arguments and the Human Rights statutes and was unable to find support for these contentions, concluding that officers responding to a 911 call are not required to force another to make a reasonable accommodation to a person with disabilities. Rather, Hansen’s statutory remedy, which he utilized, was to pursue a claim under the Human Rights statutes. Montana law, § 49-2-501 to -504, MCA, provides that the duty to enforce the Human Rights Act rests with the Montana Department of Labor and Industry (Department). Persons “aggrieved by any discriminatory practice” may file a complaint with the Department, § 49-2-501, MCA, which is the exclusive remedy to address unlawful discrimination in Montana. Section 49-2-512(1), MCA; Edwards v. Cascade County Sheriff, 2009 MT 451, ¶ 69, 354 Mont. 307, 223 P.3d 893.
¶21 When an aggrieved person files a complaint, the Department is required to investigate and attempt to informally settle the dispute. Section 49-2-504(1), (2), MCA. The Department must issue a finding based upon the facts of the case as to whether there is reasonable cause to believe that unlawful discrimination has occurred. Section 49-2-504(7), MCA; Reeves v. Dairy Queen, 1998 MT 13, ¶ 28, 287 Mont. 196, 953 P.2d 703. The Department may determine that the facts either support the claim or that they do not. Section 49-2-504(7)(b), (c), MCA. If there is reasonable cause to believe that there was discrimination, the matter is referred to a contested case hearing. Section 49-2-505, MCA. The hearing officer issues a decision and either party may appeal to the Human Rights Commission. Section 49-2-505(3) to (5), MCA. The Human Rights Division hearings officer may provide appropriate relief to the aggrieved party, § 49-2-506, MCA, which may be enforced by petition to district court, § 49-2-508, MCA.
¶22 The express allegation in Hansen’s complaint was that Bozeman itself violated the Human Rights Act when it “aided and abetted” the C’Mon Inn’s discriminatory conduct. Hansen’s claim is based upon §49-2-302, MCA:
It is unlawful for a person, educational institution, financial institution, or governmental entity or agency to aid, abet, incite, compel or coerce the doing of an act forbidden under this chapter or to attempt to do so.
The Montana Human Rights Act does not contain a definition of the terms “aid, abet, incite, compel or coerce” as used in § 49-2-302, MCA. The District Court and the parties relied upon the Restatement of Torts for a definition of “aiding and abetting”:
For harm resulting to a third person from the tortious conduct of another, one is subject to liability if he
(a) does a tortious act in concert with the other or pursuant to a common design with him, or
(b) knows that the other’s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other so to conduct himself, or
(c) gives substantial assistance to the other in accomplishing a tortious result and his own conduct, separately considered, constitutes a breach of duty to the third person.
Restatement (Second) of Torts, § 876. Assuming that this definition applies, Bozeman does not qualify as an aider or abettor of C’Mon Inn’s discrimination. Most obviously, the hotel had already discriminated against Hansen by refusing to register him before the officers arrived. There is nothing but speculation to support a contention that the C’Mon Inn staff would have reversed its decision if only the officers had done or said something different. And, it is notable that the C’Mon Inn organization continued its resistance to Hansen’s claim through the investigation and the evidentiary hearing that resulted in an adverse decision.
¶23 There is also no material support for the contention that the responding Bozeman officers committed a discriminatory act “in concert with” or as part of a “common design” with the hotel, or that the officers gave “substantial assistance or encouragement” to the hotel to discriminate against Hansen. While Hansen sees assistance and encouragement in the officers’ ultimate request that he leave the hotel and seek a room elsewhere, there is no showing that this was anything more than their good faith effort to diffuse the impasse between Hansen and the hotel staff. Last, the officers did not discriminate against Hansen through their own separate conduct. Therefore, we find no evidence to support a contention that they aided or abetted C’Mon Inn’s conduct.
¶24 We agree with the District Court’s conclusion that the Human Rights Act on its face does not make law enforcement officers responsible for remedying unlawful discrimination following the aggrieved party’s call to 911. To the contrary, the law sets out clear procedures and remedies to address and correct discrimination. While § 49-2-601, MCA, makes engaging in willful discrimination a misdemeanor, nothing in that section evidences an intent to allow or require law enforcement officers to supplant the statutes providing for enforcement of protections against discrimination in Montana. Hansen is unable to concretely describe the parameters of a law enforcement officer’s responsibility in a situation like the one in this case. See McDonald v. DEQ, 2009 MT 209, 351 Mont. 243, 214 P.3d 749 (determining the parameters required for employer’s accommodation of employee’s service dog).
¶25 Hansen sued under the Human Rights Act, and we find no basis therein to require law enforcement officers to investigate and determine the merits of discrimination disputes. Determination of whether there has been unlawful discrimination can involve intricate issues of law and proof. Reeves, ¶¶ 10-18, 21; BNSF v. Feit, 2012 MT 147, ¶ 8, 365 Mont. 359, 281 P.3d 225. These are not the kinds of situations that are suited to resolution by officers responding to a 911 call. These are, however, the kinds of situations commonly considered and disposed of under the investigation, hearing and enforcement provisions in Montana law.
¶26 We reach a similar conclusion under the Federal Americans with Disabilities Act. Under the ADA, 42 USCA § 12132, “no qualified individual with a disability” may be “excluded from participation or be denied the benefits of the services, programs or activities of a public entity, or be subject to discrimination by any such entity.” Like the Montana Human Rights Act, the ADA does not contain any express requirement that the officers enforce or vindicate whatever rights Hansen had against the hotel.
¶27 The parties agree that Bozeman is subject to the requirements of that statute. Sheehan v. San Francisco, 743 F.3d 1211 (9th Cir. 2014). This certainly prohibits Bozeman from itself unlawfully discriminating against citizens, but it does not also cany an obligation to enforce citizens’ rights as against third parties. The District court concluded as follows:
There’s no dispute that police officers are subject to the ADA and that Mr. Hansen was qualified to participate or receive the benefit of the Bozeman Police Department services. But the Court does not find that, first of all, there are sufficient allegations either in the Complaint or as even supplemented through the briefing that he was denied the benefit of the Police Department services or that he was specifically discriminated against by the Bozeman Police Department by reason of his disability.
We agree with the District Court’s assessment of the ADA claim.
¶28 There is no evidence that Bozeman denied any services to Hansen, aside from his contention that the officers were required to do something more than they did to assist him in his dispute with the CMon Inn. The officers responded promptly to Hansen’s 911 call; they assessed the situation, interviewing Hansen first; and they tried to assist Hansen to find some other place to stay. While the officers did not do what Hansen says they should have done, they did not discriminate against Hansen because of his disability. They had no obligation to force the CMon Inn to provide him a room or to negotiate on his behalf.
¶29 The District Court properly exercised its discretion in denying Hansen’s motion for leave to file an amended complaint and properly granted summary judgment to the Bozeman Police Department.
¶80 The District Court is affirmed.
JUSTICES BAKER, COTTER, SHEA and WHEAT concur.
We have not located copies of these documents in the record on appeal.
Law enforcement agencies are subject to non-discriminatory requirements of Montana law. Section 49-2-308, MCA; Edwards, ¶ 62.
|
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Donald Pulst (Pulst) appeals from the judgment of the Montana Twelfth Judicial District Court, Liberty County, convicting him of sexual assault, sexual intercourse without consent, and indecent exposure. We affirm in part, reverse in part, and remand for proceedings consistent with this Opinion.
ISSUES
¶2 We review the following issues:
1. Did the District Court abuse its discretion by admitting evidence of uncharged acts of sexual assault allegedly committed by Pulst?
2. Did the District Court abuse its discretion by excluding evidence thatK.S. was physically abused by her husband several years after the sexual assaults?
3. Did the District Court err by imposing a written sentence that was inconsistent with the sentence it orally pronounced?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 A.B. was bom in 1988 to her mother, J.B. Although she lived in Washington until she was 15 years old, A.B. and her family visited Montana frequently during her childhood, traveling to Chester, Montana several times per year to visit A.B.’s grandparents, uncles, aunts, and cousins.
¶4 During the visits, Pulst, who is A.B.’s uncle, would take A.B. on drives in his vehicle and sexually assault her. Pulst took A.B. on drives several times per year while A.B. was between 7 and 11 years old. During each drive, Pulst would place her on his lap, allow her to operate the steering wheel, and then sexually assault her while she did so. Pulst’s actions hurt A.B. and made her feel uncomfortable, but Pulst instructed A.B. not to tell anyone about his actions, and A.B. remained silent for several years.
¶5 When A.B. was about 11 years old she began attending sexual education classes at her school and discussing sexual education topics with her parents. She was instructed and warned about sexual harassment, sexual assault, and sexual predators, and A.B. began to realize that what Pulst had been doing to her was wrong. However, she initially chose not to tell anyone about what Pulst had done to her. Instead, believing that she “had [her] own power to make it stop,” she resolved to no longer take drives with Pulst.
¶6 During December 1999, Pulst visited Washington. While he was there, he stayed with A.B.’s family in their home. On the last night of his visit, A.B. reported that Pulst sexually assaulted her in her bedroom. (This event will hereinafter be referred to as the “Washington Assault.”) A.B. later stated that after this assault she realized that she would not be able to simply remove herself from certain situations and avoid being sexually assaulted by Pulst. That night, A.B. told her mother, J.B., about the assault and about similar assaults that had occurred during their visits to Montana.
¶7 J.B. confronted Pulst about A.B.’s allegations soon thereafter, and she told Pulst that she would report him to the police if he did not do so himself. Pulst reported A.B.’s allegations to the Liberty County Sheriffs Office soon thereafter. J.B. also told her sister, W.D., about Pulst’s inappropriate contact with A.B. In response, W.D. spoke with her own daughter, KS. She reminded KS. that it was inappropriate for anyone other than her doctor to touch her in certain places, and in response KS. reported that Pulst had sexually assaulted her.
¶8 KS., who lived in Chester, Montana, had frequent contact with Pulst. Beginning when KS. was four or five years old, Pulst would take KS. on drives and allow her to operate the steering wheel. As with A.B., Pulst would place KS. on his lap and sexually assault her during these drives. KS. also reported that Pulst had masturbated in front of her and her brother and that Pulst had, on at least one occasion, removed KS.’s underwear and digitally penetrated her vagina.
¶9 The Liberty County Sheriffs Office investigated these and other allegations after they were made in early 2000. For reasons that are not clear from the record, no criminal charges were pursued until 2012, when police were again informed by a family member that Pulst had been accused of molesting A.B. and KS.
¶10 On June 5, 2012, the State filed an information in the District Court charging Pulst with sexual assault, sexual intercourse without consent, and indecent exposure. He had been interviewed by Department of Justice agents several weeks earlier. Consistent with statements he made in 2000, Pulst did not dispute A.B.’s and KS.’s allegations. Pulst even went so far as to say that he did not think either A.B. or KS. would lie about the allegations. He did claim, however, that if he had committed acts of sexual assault, he did not remember them.
¶11 On October 19,2012, Pulst filed a motion to suppress evidence of the Washington Assault at trial. Pulst claimed that the evidence was not relevant and, in the alternative, that any probative value the evidence had was substantially outweighed by the danger of unfair prejudice. Based on some confusion about the timeline of events, the District Court initially issued an order granting Pulst’s motion. The order was reversed and the motion denied once the parties resolved certain factual misunderstandings. Doing so, the District Cotut stated that:
The State’s position, as I understand it, is that they are not intending to present any information for the purpose of having the jury convict on the basis of that alleged [Washington Assault], but rather to allow the State to explain the chain of events set in motion by the allegations that arose from December of1999. Now, I do find that the State should be allowed, as part of the presentation of this case, to make reference to that incident and the allegations that arose from that, but that that should not include any unnecessary details regarding inappropriate contact or touching, penetration. I don’t see any purpose in discussing that.... So having said that, I’m going to allow the State to do that then. And we may need to address this, just a general presentation, that Mr. Pulst engaged in some conduct similar to what she had experienced in the past, that this happened in her home where she perhaps felt safer to make a disclosure or sort of outrage where she felt that she had to — I don’t know what she felt she had to do.... I will allow that for that limited purpose because I do think that the State should be allowed an opportunity to explain the particular events that led to further investigation and/or statements made by Ah'. Pulst.
¶12 The District Court conducted a jury trial that began on January 7,2013. A.B., K.S., J.B., and W.D. were among the witnesses the State called to testify. As part of their testimony, A.B. and J.B. described the events that occurred in Washington and how they led to A.B. relating her allegations of sexual assault to J.B. As part of KS.’s testimony, she described the effects that the sexual assault has had on her life. She related that:
It’s, you know — it’s really, really hard on me. I used to have, you know, horrible nightmares about it. Thought things w[ere] getting better, but then last — I mean it’s not been a long time. It’s 12 years ago that I turned it in. I still can’t be like alone in a room with a male, that even if I know them, it’s like really — I’ll like have panic attacks. That’s ruining, you know, potential jobs for me. If I might interview with a male, I can’t even — I can’t handle it. It’s really hard on me. Like the relationship with my husband, if he touches me the wrong way, it triggers something, you know.
In response, Pulst asked whether KS. had ever been abused by her husband. After KS. responded “no," Pulst attempted to introduce evidence that W.D., KS.’s mother, had noticed and taken pictures of extensive bruising on KS. at some point after KS. was married. Pulst theorized that some kind of domestic abuse was an alternate explanation for KS.’s traumatization and that evidence of abuse was relevant to KS.’s credibility. The State objected to introduction of this evidence, and the District Court sustained the objection.
¶13 Following the trial, a jury found Pulst guilty of all the charges brought against him. The District Court held a sentencing hearing on May 24,2013. It pronounced its sentence orally following the hearing. It committed Pulst to Montana State Prison for several terms of years, and it suspended portions of the terms, subject to Pulst’s compliance with various conditions that it imposed. The District Court primarily adopted the conditions recommended in Pulst’s pre-sentence investigation report, though the District Court modified some of the conditions. The District Court entered a written sentence on June 12, 2013.
STANDARDS OF REVIEW
¶14 We review a criminal sentence longer than one year for legality. State v. Greene, 2015 MT 1, ¶ 13, 378 Mont. 1, 340 P.3d 551. We generally review a district court’s rulings on the admissibility of evidence for abuse of discretion. State v. Berosik, 2009 MT 260, ¶ 28, 352 Mont. 16, 214 P.3d 776. But, where the district court’s reasons for its evidentiary rulings are not apparent from the record, we will review the rulings de novo. State v. Clifford, 2005 MT 219, ¶ 52, 328 Mont. 300, 121 P.3d 489.
¶15 Pulst argues that we should review the District Court’s evidentiary rulings de novo in this case. However, the District Court’s reasons for the evidentiary rulings at issue on appeal are apparent from the record. The District Court thoroughly considered on the record the parties’ arguments for and against admission of the evidence, and it carefully explained its reasons for the rulings. We review the rulings for an abuse of discretion. Clifford, ¶ 52.
DISCUSSION
¶16 2. Did the District Court abuse its discretion by admitting evidence of uncharged acts of sexual assault allegedly committed by Pulst ?
¶17 Pulst argues that the District Court abused its discretion when it decided to admit evidence of the Washington Assault. Although both parties agree on appeal that the evidence was relevant pursuant to the transaction rule of § 26-1-103, MCA, Pulst argues that the probative value of the evidence was substantially outweighed by danger of unfair prejudice and that the evidence should have been excluded pursuant to M. R. Evid. 403. We disagree.
¶18 Relevant evidence is admissible unless a rule of evidence precludes its admission. M. R. Evid. 402; State v. Stewart, 2012 MT 317, ¶ 58, 367 Mont. 503, 291 P.3d 1187. M. R. Evid. 403 allows a district court, as an exercise of its discretion, to exclude relevant evidence where the evidence’s “probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury.” This rule does not require exclusion of relevant evidence simply because it is prejudicial. Indeed, most evidence offered by the prosecution in a criminal trial will be prejudicial to the defendant. Stewart, ¶ 68; State v. Bieber, 2007 MT 262, ¶ 59, 339 Mont. 309, 170 P.3d 444. Instead, evidence is excludable by M. R. Evid. 403 only if the danger of prejudice from the evidence is unfair and substantially outweighs the evidence’s probative value. M. R. Evid. 403; Stewart, ¶ 68.
¶19 Evidence is unfairly prejudicial if it tempts the juiy to decide the case on an improper basis. State v. Franks, 2014 MT 273, ¶ 15, 376 Mont. 431, 335 P.3d 725. Unfair prejudice may arise from evidence that arouses the jury's hostility or sympathy for one side. Franks, ¶ 16. Evidence of crimes, wrongs, or acts of the defendant that are not directly at issue in a case are especially likely to create unfair prejudice. See Franks, ¶¶ 14-16. This is particularly true for evidence of child molestation, given its “highly inflammatory” nature, and we have advised district courts and parties to “tread with caution” when introducing such evidence. Franks, ¶ 17. A district court may minimize unfair prejudice by admitting evidence for a particular purpose and limiting the uses to which the jury may put the evidence. See M. R. Evid. 105; State v. Hantz, 2013 MT 311, ¶ 44, 372 Mont. 281, 311 P.3d 800; McDermott v. Carie, 2005 MT 293, ¶¶ 20-23, 329 Mont. 295, 124 P.3d 168.
¶20 In this case, the District Court carefully controlled the admission of evidence of the Washington Assault, limiting the danger of unfair prejudice. It ruled that the evidence was admissible only for the limited purpose of explaining the timing of A.B.’s disclosure, and it limited discussion of the assault to the bare facts of its occurrence and the surrounding circumstances. During trial, it was vigilant in enforcing this ruling, and it ensured that the parties respected the limitations it imposed on the evidence. It also gave instructions to the jury on at least three separate occasions reminding it of the limited use to which the evidence could be put. Ultimately, A.B. and J.B. testified that Pulst had touched A.B. inappropriately during Pulst’s visit to Washington and that this led to A.B.’s disclosure of the instances of sexual assault that were at issue in the case. There was no description of Pulst’s actions other than statements that he had touched A.B. inappropriately by repeating things he had previously done during drives in Montana. Given the court’s careful treatment of the evidence, there was little temptation or opportunity for the jury to decide the case on an improper basis.
¶21 District courts have broad discretion to admit or exclude evidence under M. R. Evid. 403. State v. Passmore, 2010 MT 34, ¶ 64, 355 Mont. 187, 225 P.3d 1229. In light of the District Court’s treatment of the evidence that limited its prejudicial effects, we see no reason to disturb its discretionary decision to admit evidence of the Washington Assault. The District Court, by carefully limiting the evidence that was admitted and controlling the manner in which it was introduced, ensured that any unfair prejudice did not substantially outweigh the probative value of the evidence.
¶22 2. Did the District Court abuse its discretion by excluding evidence thatKS. was physically abused by her husband several years after the sexual assaults?
¶23 At trial, Pulst sought testimony from W.D. that she had seen and taken pictures of bruises on K.S. years after Pulst’s sexual assaults. He claimed that the evidence would impeach KS.’s testimony by contradicting her cross-examination statement that she was not physically abused by her husband and by providing an alternate explanation for the effects K.S. claimed to have suffered as a result of Pulst’s assaults. The District Court decided that the evidence was not relevant and refused to admit it. Pulst argues that this was an abuse of discretion. We disagree.
¶24 Evidence is relevant if it tends to make “any fact that is of consequence to the determination of the action” more or less probable. M. R. Evid. 401. This may include “evidence bearing upon the credibility of a witness.” M. R. Evid. 401. Evidence that is not relevant is not admissible. M. R. Evid. 402.
¶25 The evidence that Pulst seeks to admit is not, as Pulst contends, evidence that KS. was abused by her husband. At most, this is a remote inference that might possibly be drawn from the evidence. More accurately, Pulst sought to introduce evidence that W.D. observed and took pictures of bruises on KS. several years after the alleged sexual assaults. He also sought W.D.’s testimony that she believed the bruises might be attributable to abuse by KS.’s husband.
¶26 This evidence — evidence of bruising on KS. and W.D.’s mere speculation as to its cause — is not relevant evidence. It does not tend to make any fact “of consequence to the determination of the action” more or less probable. The fact that KS. may have experienced extensive bruising years after Pulst sexually assaulted her does not tend to show that KS.’s husband or anyone else abused her. Moreover, even if we assume otherwise, such abuse would not be a fact “of consequence to the determination of the action,” as abuse years after the alleged sexual assaults would not tend to show that Pulst was innocent of the crimes with which he was charged. Even if the evidence suggested that KS. lied about whether her husband had abused her, this would not establish the inference that she had lied to her parents, police, and the court when she reported that Pulst had sexually assaulted her. Finally, the evidence does not show that KS. misattributed the cause of her emotional injuries to Pulst’s sexual assault, and even if it did, the cause of her continuing injuries is not a fact “of consequence to the determination of the action.”
¶27 District courts have broad discretion to decide whether evidence is relevant. Henricksen v. State, 2004 MT 20, ¶ 64, 319 Mont. 307, 84 P.3d 38. As Pulst has not demonstrated on appeal that this evidence tends to make any fact “of consequence to the determination of the action” more or less probable, we will not disturb the District Court’s discretionary decision that the evidence was not relevant and should be excluded.
¶28 3. Did the District Court err by imposing a written sentence that was inconsistent with the sentence it orally pronounced?
¶29 Pulst argues that the District Court’s written sentence is inconsistent with its oral pronouncement. Specifically, he argues that conditions 4, 7,16, and 25 of the written judgment differ from those pronounced at the sentencing hearing. The State concedes that written conditions 4 and 7 deviate from the conditions orally pronounced and should be corrected. It does not agree, however, that written conditions 16 or 25 were inconsistent with the conditions orally pronounced.
¶30 As written, condition 16 reads: “If deemed appropriate by the Probation & Parole Officer, Defendant shall obtain a chemical dependency evaluation by a state-approved evaluator. Defendant shall pay for the evaluation and follow all of the evaluator’s treatment recommendations.” This is consistent with the condition as pronounced at the sentencing hearing. The District Court stated that:
I’m going to include provisions of Paragraph 16. The recommendation made in Paragraph 16 does not require you to obtain such a chemical dependency evaluation, but that requirement would only be made if a State hearings officer deems it appropriate. Let’s all hope ... you never get to that stage. This would be as a result of some infraction or rule violation, and they would have the opportunity to determine if such an evaluation is appropriate at that time.
In its oral pronouncement, the District Court described the condition as it was written. It expressed no intention to modify the condition. We agree with the State that the District Court’s written condition 16 is consistent with the condition as orally pronounced.
¶31 However, we agree with Pulst that condition 25 as written is inconsistent with the condition as orally pronounced. As written, condition 25 reads: “Defendant shall attend self-help meetings at the direction of the Probation & Parole Officer to assist with Defendant’s rehabilitation.” (Emphasis added.) When the District Court orally pronounced the condition, the District Court transcript included:
THE COURT: ... I’m going to include the provision of Paragraph [2]5. The probation officer may direct you to attend self-help meetings if deemed appropriate and necessaiy and designed to assist you with your rehabilitation.
That’s a modification there, all right. Do you want that language in there?
[THE STATE]: Yes, Your Honor.... I’m sorry, on 25, if deemed appropriate by the probation/parole officer?
THE COURT: By the probation/parole officer, if deemed appropriate and designed to assist Mr. Pulst’s rehabilitation.
(Emphasis added.) Despite the State’s contention otherwise, the District Court modified condition 25 in its oral pronouncement. It explicitly declared that it made a modification, and it expressed the intention to alter the mandatory language of the written condition so that it was instead permissive and based on the probation/parole officer’s judgment of the appropriateness ofthe condition. Condition 25, as written, is inconsistent with the oral pronouncement of the condition.
¶32 The “oral pronouncement of a criminal sentence in the presence of the defendant is the legally effective sentence and valid, final judgment.” Greene, ¶ 29 (internal quotation marks omitted). Where a written judgment increases the sentence, it should be reversed. The State concedes that conditions 4 and 7 were unlawfully increased in the written judgment, and it is clear upon reviewing the record that condition 25 was also unlawfully increased in the written judgment. Consequently, we reverse the judgment and remand for the purpose of correcting conditions 4, 7, and 25 of the District Court’s written judgment.
CONCLUSION
¶33 The District Court did not abuse its discretion when it allowed limited evidence of an uncharged act by Pulst to be introduced. It also did not abuse its discretion when it decided that evidence of possible physical abuse of K.S. by her husband was not relevant and consequently inadmissible. However, the District Court did err when it issued a written sentence that was partially inconsistent with the sentence it had orally pronounced. We affirm in part, reverse in part, and remand for the purpose of correcting the written judgment.
JUSTICES COTTER, BAKER, McKINNON and RICE concur.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Mavoureen Speiser (Speiser) appeals from the order of the Montana Fourth Judicial District Court, Missoula County, confirming probate of Violet Quirin’s June 23,2010 will. We affirm.
ISSUES
¶2 We review the following issues:
1. Did the District Court err when it confirmed probate of the 2010 will?
2, Did the District Court err by issuing an order inconsistent with its pretrial order?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Violet Quirin (Quirin) died on January 10,2011. She was survived by two adult daughters, Speiser and Cathie Schmiedeke (Schmiedeke). Prior to her death, Quirin had executed three wills. The first was signed on November 16,2005, the second was signed on March 1,2007, and the third was signed on June 23,2010. In the 2005 and 2007 wills Quirin divided her property equally between her daughters. However, in the 2010 will, Quirin wrote, “I acknowledge my love and respect for my daughters, [Speiser] and [Schmiedeke], hut make no provision for them in this will,” and she instead divided her estate among several friends and charitable organizations.
¶4 The 2010 will was the product of Quirin’s interactions with attorney Nancy Moe. Quirin contacted Moe on June 2,2010, and asked her to draft a new will for Quirin. Moe met with Quirin for around an hour and a half on June 4,2010. Quirin told Moe that her daughters were the current beneficiaries of her will and that she no longer wished for them to benefit from her estate. She told Moe that she would like to change her will to benefit organizations and individuals with whom she had long, trusting relationships. Moe advised Quirin that a will contest might result from such a change, but Quirin persisted, stating that she and her daughters were “not close.” Quirin told Moe that she wanted to leave her house to her church, to leave the money in her bank accounts to Missoula Aging Services, and to dispose of certain personal property to several friends. Quirin also told Moe that she had given her friend Kristine Fankell $100,000 to use for Quirin’s benefit, and that she wished for Fankell to keep any portion of the $100,000 that remained at the time of Quirin’s death.
¶5 Moe concluded that Quirin intended to make a new will, understood that she was making a new will, understood her assets, and otherwise understood the consequences of what she was doing. Moe, therefore, drafted a will based on her June 4 discussion with Quirin. She mailed a draft of the will to Quirin on June 18,2010. On June 23, 2010, Moe, accompanied by two paralegals from her office, visited Quirin’s home. Moe and the paralegals observed that Quirin was dressed and articulate and that there was nothing to suggest that Quirin did not have testamentary capacity. Quirin and Moe spoke about the will and their June 4 conversation. Quirin signed the will prepared by Moe during this visit. The paralegals signed the will as witnesses.
¶6 When Fankell visited Quirin several months later, Quirin discussed the 2010 will and told Fankell that she was adamant about keeping the will as it was. Quirin also told Fankell that the 2010 will named Fankell personal representative of Quirin’s estate.
¶7 On January 18,2011, following Quirin’s death, Fankell submitted the 2010 will for informal probate and asked that, according to the terms of the will, she be appointed personal representative of Quirin’s estate. The Clerk of the District Court granted these requests, ordering informal probate and appointing Fankell personal representative. On May 3,2011, Speiser petitioned for formal probate of the will Quirin executed on March 1, 2007. She claimed that Quirin lacked testamentary capacity when she signed the 2010 will and that Quirin’s estate should be distributed according to the terms of the 2007 will.
¶8 Prior to the matter going to trial, the parties agreed and stipulated to numerous facts and to admission of several exhibits. The parties also quoted language from In re Estate of Lightfield, 2009 MT 244, 351 Mont. 426, 213 P.3d 468, and stipulated that the language provided the test for determining testamentary capacity. The court entered a pretrial order on April 10, 2014, that listed the stipulated facts, exhibits, and test for testamentary capacity. The order also identified fourteen issues of fact that remained to be litigated and specified that no issues of law were contested.
¶9 On June 20, 2014, following a trial, the District Court issued findings of fact, conclusions of law, and an order. The District Court ultimately decided that Speiser failed to show that Quirin lacked testamentary capacity, and it confirmed probate of the 2010 will. Speiser appeals.
STANDARDS OF REVIEW
¶10 We review a district court's findings of fact to determine if they are clearly erroneous. In re Estate of Lambert, 2006 MT 229, ¶ 9, 333 Mont. 444, 143 P.3d 426. A court's findings are clearly erroneous if they are not supported by substantial evidence, the court misapprehended the effect of the evidence, or we are convinced by our review of the record that the district court made a mistake. Lambert, ¶ 9. We review a district court’s conclusions of law for correctness. Lambert, ¶ 9.
DISCUSSION
¶11 1. Did the District Court err when it confirmed probate of the 2010 will?
¶12 Speiser contends that Quirin lacked testamentary capacity to execute the 2010 will. She contends that the District Court erred when it found otherwise, arguing that it applied an incorrect standard of law and that its finding was clearly erroneous. We disagree.
¶13 Proponents of a will have the burden of establishing prima facie proof of its due execution. Once a duly executed will is submitted for probate, the testator’s competence is presumed, and any contestants have the burden of establishing lack of testamentary capacity. Lightfield, ¶ 28. Here, the District Court decided that the 2010 will was duly executed. Speiser does not contest this decision, and she, therefore, had the burden to establish lack of testamentary capacity. ¶14 For over fifty years, we have stated that the test for determining testamentary capacity is:
[A] testator is competent if he is possessed of the mental capacity to understand the nature of the act, to understand and recollect the nature and situation of his properly and his relations to persons having claims on his bounty whose interests are affected by his will ... . The testator must have sufficient strength and clearness of mind and memory to know, in general, without prompting, the nature and extent of the property of which he is about to dispose, and the nature of the act which he is about to perform, and the names and identity of the persons who are to be the objects of his bounty, and his relation towards them.
E.g., Lightfield, ¶ 27; In re Estate of Prescott, 2000 MT 200, ¶ 34, 300 Mont. 469, 8 P.3d 88; In re Estate of Lien, 270 Mont. 295, 299, 892 P.2d 530, 532 (1995); In re Estate of Bodin, 144 Mont. 555, 560, 398 P.2d 616, 619 (1965). In more recent cases, we have retained this test while restating it as “testamentary capacity requires that the testator be aware of three elements: (1) the nature of the act to be performed, (2) the nature and the extent of the property to be disposed of, and (3) the objects of his or her bounty.” Lightfield, ¶ 28; In re Estate of Harms, 2006 MT 320, ¶ 14, 335 Mont. 66, 149 P.3d 557; Prescott, ¶ 34.
¶15 Speiser contends that awareness of these three elements is an additional component rather than a restatement of the test for testamentary capacity. Speiser, therefore, argues that the District Court erred when it based its testamentary capacity finding solely on Quirin’s awareness of the three elements. She states that before reaching such a decision, the District Court was also required to consider whether Quirin possessed the “mental capacity to understand” and “sufficient strength and clearness of mind and memory to know” the elements.
¶16 This is incorrect. In Prescott, we affirmed the derision of a district court granting summary judgment on the question of whether the testator lacked testamentary capacity. Prescott, ¶¶ 20,34, 39,42, 46,48. In that case, we limited our analysis to evidence concerning the testator’s awareness of the three elements. We did not independently consider the testator’s mental capacity to understand the elements. We also did not independently consider the testator’s strength and clearness of mind and memory to know the elements. We concluded that the District Court did not err by granting summary judgment based solely on uncontroverted evidence of the testator’s awareness of the three elements. Prescott, ¶¶ 35-48. Similarly, the District Court in this case did not err by basing its testamentary capacity finding solely on Quirin’s awareness of the three elements.
¶17 Speiser also contends that the District Court’s testamentary capacity finding was incorrect. Whether a testator has testamentary capacity is a question of fact, which we review for clear error. Lightfield, ¶¶ 24, 29. We will only reverse a district court’s finding regarding testamentary capacity if it is not supported by substantial evidence, the court misapprehended the effect of the evidence, or we are convinced by our review of the record that the district court made a mistake. Lambert, ¶ 9. Here, the District Court’s testamentary capacity finding was supported by substantial evidence, the effect of which the District Court did not misapprehend.
¶18 As discussed above, testamentary capacity exists if, at the time the will is executed, a testator is “aware of... (1) the nature of the act to be performed, (2) the nature and the extent of the property to be disposed of, and (3) the objects of his or her bounty.” Lightfield, ¶ 28. The District Court found that Quirin was aware of each of the three elements at the time of execution, and this finding was supported by substantial evidence.
¶19 First, Quirin’s awareness of the nature of the will execution was supported by substantial evidence. Quirin arranged, specifically and of her own volition, to meet a lawyer and have her will changed. She then kept track of and persisted in the process for almost a month. The three people present when the will was executed testified that Quirin understood what she was doing. Also, several months after the 2010 will was executed, Quirin discussed the will, the changes she had made, and expressed her desire to leave the will unchanged.
¶20 Second, Quirin’s awareness of the nature and extent of her property was also supported by substantial evidence. During the months surrounding execution of the 2010 will, Quirin had several interactions with her banks, withdrawing money and changing the names on accounts. She kept large amounts of money in her house but was able to recall where the money was kept and approximately how much money was hidden. When discussing with Moe the changes to make to her will, Quirin was able to identify her assets, including her cash, the amount of money she had given to Fankell for her care, her bank accounts, and her house.
¶21 Finally, Quirin’s awareness of the objects of her bounty was also supported by substantial evidence. Quirin specifically requested removal of her daughters from her will. After she was advised against doing so, Quirin persisted. As such, the will specifically mentioned Speiser and Schmiedeke and specifically excluded them from succeeding to the estate. For the months following execution of the will, Quirin seemed to understand that she had removed her daughters from her will, describing this to Fankell and stating that preventing them from succeeding to her estate continued to be her wish. Moreover, Quirin’s removal of Speiser and Schmiedeke did not seem accidental. Instead, it was knowing conduct that followed a pattern of increasing estrangement between Quirin and her daughters. It followed Quirin moving out of Speiserts house, Quirin accusing Speiser of stealing money from her, Quirin changing the locks to her house so that neither Speiser’s nor Schmiedeke’s keys would work, and Quirin removing Speiser’s name from her bank accounts.
¶22 Speiser does not contend that evidence supporting the foregoing facts does not exist. Instead, she argues that some evidence contradicted the District Court’s, findings and, particularly, that some evidence indicated that Quirin did not understand the nature and extent of her property. However, it is not the role of this Court to weigh conflicting evidence or to determine whether there is support for findings that were not made. In re Estate of Bradshaw, 2001 MT 92, 11 11, 20, 305 Mont. 178, 24 P.3d 211. Where conflicting evidence exists, we will not substitute our judgment for the district court’s. Harms, ¶ 12. Thus, the mere presence of conflicting evidence does not mean that the District Court’s finding of testamentary capacity was clearly erroneous, nor does it alter our conclusion that the District Court’s finding of testamentary capacity was supported by substantial evidence. See Harms, ¶ 35.
123 2. Did the District Court err by issuing an order inconsistent with its pretrial order?
124 Speiser contends that the District Court deviated from the pretrial order when it entered its order confirming probate of the 2010 will. She contends that the District Court applied a different legal standard for testamentary capacity than the one specified in the pretrial order and that the District Court did not rule on all of the factual issues identified in the pretrial order. For these reasons, she argues that the District Court violated M. R. Civ. P. 16(d) and failed to afford her due process.
125 The District Court did not err by applying a different legal standard than the one specified in the pretrial order. Instead, the District Court applied the standard specified in the pretrial order. As discussed above, the District Court applied the test identified in Lightfield, which was also the test quoted in the pretrial order and the test that Speiser argues the District Court should have applied.
126 The District Court also did not err by not specifically addressing each factual issue identified in the pretrial order. Speiser contends that district courts are required to address eveiy factual issue identified in a pretrial order. However, this Court has never adopted such a rule, and Speiser does not provide any reasons why we should do so now. Instead, she recommends this rule in conclusory statements and bare citation to Baston v. Baston, 2010 MT 207, 357 Mont. 470, 240 P.3d 643; and Weimar v. Lyons, 2007 MT 182, 338 Mont. 242, 164 P.3d 922. As these cases do not stand for such a rule and are distinguishable from the present case on their facts, and as we are not required to develop legal analysis to support Speiser’s conclusory statements, we hold that the District Court did not err when it did not specifically address each of the factual issues identified in the pretrial order.
¶27 In Bastón and Weimar, we required the district courts and parties to limit evidence, arguments, and decisions at trial to matters identified in a pretrial order. Bastón, ¶¶ 19-20; Weimar, ¶¶ 20-21. We reasoned that the purpose of a pretrial order is to “prevent surprise, simplify the issues and permit counsel to prepare their case for trial on the basis of the pretrial order.” Boston, ¶ 19; accord Weimar, ¶ 20. We have repeatedly reached similar conclusions based on this same rationale. E.g., Murphy Homes, Inc. v. Muller, 2007 MT 140, ¶¶ 44-45, 337 Mont. 411, 162 P.3d 106; Zimmerman v. Robertson, 259 Mont. 105, 111, 854 P.2d 338, 342 (1993). However, we have never required district courts to address every factual issue identified in a pretrial order. See Baston, ¶¶ 19-20; Weimar, ¶¶ 20-22; Murphy Homes, Inc., ¶¶ 44-45; Zimmerman, 259 Mont. at 111, 854 P.2d at 342. Nor does the rationale of the foregoing cases require adoption of such a rule. Unlike in Bastón and Wiemar, the District Court in this case did not address any issues beyond the scope of the pretrial order. Instead, it did not explicitly consider several factual issues that it identified as unresolved in its pretrial order. Unlike in Bastón and Weimar, this did not create surprise issues, hamper the parties’ efforts to prepare for trial, or otherwise prejudice the parties. As Speiser does not provide any arguments for adopting such a rule, beyond bare citation to these distinguishable cases, we hold that the District Court did not err when it did not specifically address every factual issue identified in its pretrial order.
¶28 It also did not deprive Speiser of due process by not addressing those factual issues. Due process “requires a reasonable notice as to give everyone interested their opportunity to be heard.” Bastón, ¶ 18. The District Court did not address any issues not identified in the pretrial order. By virtue of the pretrial order, Speiser was aware of all of the potential issues to be litigated and the legal standards that would be applied. She was given notice of these issues at a time that left her with ample opportunity to prepare her case. The District Court’s decision to not explicitly address all of the issues did not deprive her of notice or the opportunity to be heard.
CONCLUSION
¶29 The District Court did not err when it determined that Quirin possessed testamentary capacity at the time she executed the 2010 will. This finding was based on the correct legal standard and was supported by substantial evidence. The District Court also did not err by not specifically addressing each of the factual issues identified in the pretrial order. For these reasons, the District Court’s order confirming probate of the 2010 will is affirmed.
CHIEF JUSTICE McGRATH, JUSTICES McKINNON, COTTER and SHEA concur.
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JUSTICE SHEA
delivered the Opinion of the Court.
¶1 Birth mother, R.N.-S., appeals an order of the First Judicial District Court, Lewis and Clark County, terminating her parental rights to her four children, T.N.-S., N.N.-S., E.N.-S., and A.N.-S. We affirm.
¶2 The issues on appeal are:
1. Was the treatment plan appropriate when it did not require Mother to obtain a chemical dependency evaluation, despite chemical dependency being the source of Mother’s parenting deficiencies?
2. Was Mother’s counsel ineffective for failing to advocate for inclusion of a chemical dependency evaluation in the treatment plan?
3. Was the District Court required to disclose to the parties transcripts of its in-chambers interviews with the children ?
PROCEDURAL AND FACTUAL BACKGROUND
¶3 The appellant (Moth er) is the mother of the four children at issue in this case: T.N.-S., N.N.-S., E.N.-S., and A.N.-S. At the time of the termination hearing, the children were ages 15, 12, 9, and 4, respectively.
¶4 In October 2012, the Department of Health and Human Services (the Department) received a report that Mother and Father were using drugs and alcohol, were failing to supervise the children while under the influence, lacked housing, and were unable to provide for their children’s basic needs. The Department contacted the parents, who agreed to place the children with Mother’s sister and enter into a voluntary services agreement. The parents were required to submit to drug tests and, after two clean drug tests from each parent, the children were returned. A third drug test of the Father was positive for methamphetamine. The Department attempted to locate the family when it received the positive test result, but was unable to do so.
¶5 On January 3, 2013, the Department contacted the parents regarding another report indicating that the parents were again unable to care for the children due to drug use. The parents again entered into a voluntary services agreement. The parents were asked to submit to drug tests again and to meet with a Child Protection Specialist (CPS). Both parents failed to show up for drug tests or meetings with the CPS. Mother scheduled a later meeting with the CPS but failed to show up. On January24,2013, Mother finally attended a meeting with the CPS and told the CPS that she and Father were selling drugs to survive.
¶6 On January 30, 2013, the Department petitioned to have the children adjudicated youths in need of care. On May 13, 2013, the District Court held a hearing on the Department’s petition and adjudicated the children youths in need of care. In July 2013, the District Court adopted the treatment plan agreed to and signed by Mother and her attorney.
¶7 The treatment plan set out several treatment goals and objectives for Mother. Relevant to the issues on appeal, were the following goals: goal number 2 for Mother was “To assess and improve [Mother’s] mental health status.” Under that goal, Mother was required to complete a psychological evaluation and follow through with all recommendations of the evaluator. Goal number 3 for Mother was “To address [Mother’s] chemical dependency issues (drug/alcohol) and remain chemically free.” Under that goal, Mother was required to remain free from drugs and alcohol and submit to random drug and alcohol testing. The treatment plan did not require Mother to complete a chemical dependency evaluation. Neither Mother nor her attorney objected to any part of the treatment plan.
¶8 In August 2013 and again in September 2013, Mother tested positive for methamphetamine. In October 2013, Mother was arrested for drug possession and was incarcerated from December 18, 2013, through March 19, 2014. In March 2014, Mother was accepted into Treatment Court. In Treatment Court, Mother was required to submit to random drug testing, attend weekly court hearings, participate in intensive outpatient therapy and individual counseling, and attend Alcoholics Anonymous or Narcotics Anonymous meetings.
¶9 On March 28,2014, the Department petitioned the District Court to terminate Mother’s parental rights to all four children. The District Court held a termination hearing over two days, June 24 and 27,2014. At the hearing, the CPS testified that Mother failed to complete several key tasks in her treatment plan, including attending a parenting course. The CPS identified the primary goal of the treatment as getting Mother evaluated by professionals and then having Mother follow through on the professionals’ treatment recommendations, particularly to deal with her drug abuse. The CPS testified that the primary evaluation was the psychological evaluation conducted by Dr. Bowman Smelko, PsyD, whose primary recommendation was that Mother engage in substance abuse treatment. Dr. Smelko’s report noted that Mother had already been through a period of detox due to her incarceration and she might be able to begin inpatient treatment. The report also recommended Dialectical Behavioral Therapy (DBT) to address the substance abuse and emotional and behavioral issues.
¶10 The CPS further testified that Mother was given a list of chemical dependency evaluators, told she could get an evaluation, and told the Department would pay for any recommended treatment if the evaluation found Mother needed it. However, Mother never pursued an evaluation. The CPS testified that Mother should be commended for her successes in Treatment Court, but that she had only been sober for a short period of time and was not likely to be able to handle raising four kids single-handedly in the near future. The CPS testified that the Department was pursuing termination because Mother had only minimally complied with her treatment plan and it was unlikely Mother would be prepared to care for the children in a reasonable amount of time.
¶11 Dr. Smelko testified that he completed a psychological evaluation with Mother while she was in jail on the drug charges. Before the evaluation, Dr. Smelko examined information from the affidavits filed in the petition for adjudication of the children as youth in need of care, medical reviews, and drug screenings. Dr. Smelko then interviewed Mother and administered a battery of tests. Mother admitted to extensive drug use, particularly of methamphetamine. Based on all the information he gathered, Dr. Smelko opined that Mother’s drug abuse was the primary concern in Mother’s ability to parent.
¶12 The guardian ad litem for the children, a CASA volunteer, testified that she believed termination was in the best interests of the children and expressed her support for the Department’s petition to terminate. The child and family therapist similarly testified that she believed termination of Mother’s parental rights was in the best interests of the children, particularly because the oldest had assumed the role of a parent to his younger siblings. The therapist further testified that she believed termination was best because the children were all “in limbo” while they waited to find out what their permanent arrangement would be, which would likely make it difficult for them to develop attachments to Mother. The current foster mother of the three older children testified that the children had made great progress in the year they had been with her, but were experiencing confusion and uncertainty about the future. The foster mother expressed concern that the children would backslide on the progress they had made if they were returned to their Mother at this point.
¶13 Mother’s probation officer, treatment court coordinator, and individual counselor all testified that Mother was demonstrating commitment to her recovery, meeting all the requirements of Drug Treatment Court, and making good progress since beginning Drug Treatment Court. The probation officer testified that if Mother stayed on track, she would finish the Treatment Court program in September 2015. Mother testified that she was doing well in Treatment Court, and was 72 days sober at that point. Mother further testified that drug treatment was never offered to her by the Department and that she could not comply with the treatment plan while she was still using drugs. Mother specifically disputed the CPS’s testimony that the CPS had offered Mother a chemical dependency evaluation and treatment.
¶14 On the second day of the hearing, the District Court conducted in-chambers interviews with each of the three oldest children in the presence of a court reporter. The District Court told the children that the court was required to create a transcript of the interviews, but that the parties and their lawyers would not see the transcripts of the interviews. Mother’s attorney requested transcripts of the interviews, but the District Court denied the request.
¶15 After the hearing, the District Court issued its findings of fact, conclusions of law, and order terminating Mother’s rights. The District Court found that termination was appropriate under § 41-3-609(lXf), MCA, because the children were previously adjudicated youths in need of care, an appropriate treatment plan approved by the court was not completed by Mother, and the conduct or condition rendering Mother unfit was unlikely to change within a reasonable time. In accordance with § 41-3-609(2)(c), MCA, the District Court determined the conduct or condition rendering Mother unfit was unlikely to change in a reasonable time because of Mother’s drug problems. The District Court concluded that the best interests of the children dictated termination of Mother’s rights, and that the children’s best interest outweighed Mother’s rights. Mother appeals that order.
STANDARD OF REVIEW
¶16 We review for an abuse of discretion a district court’s termination of parental rights. A district court abuses its discretion when it “acts arbitrarily, without employment of conscientious judgment, or exceeds the bounds of reason resulting in substantial injustice.” In re R.M.T., 2011 MT 164, ¶ 26, 361 Mont. 159, 256 P.3d 935. We review the District Court’s findings of fact to determine whether they are clearly erroneous. In re D.B., 2007 MT 246, ¶ 18, 339 Mont. 240, 168 P.3d 691. We review the district court’s conclusions of law to determine whether they are correct. In re D.B., ¶ 18.
¶17 This Court exercises plenary review of whether a parent was denied effective assistance of counsel in termination proceedings. In re C.M.C., 2009 MT 153, ¶ 20, 350 Mont. 391, 208 P.3d 809.
DISCUSSION
¶18 1. Was the treatment plan appropriate when it did not require Mother to obtain a chemical dependency evaluation, despite chemical dependency being the source of Mother’s parenting deficiencies?
¶19 Mother argues that the treatment plan’s lack of appropriate diagnosis and treatment of the source of her parenting problems — her drug addiction — set her up for failure. The Department points out that a primary goal of the treatment plan was to address Mother’s drug abuse and argues that the CPS gave Mother the opportunity and information to obtain a chemical dependency evaluation and any recommended treatment, but that Mother did not pursue that opportunity.
¶20 The right to parent a child is a fundamental liberty interest, and it must be protected by fundamentally fair procedures. In reD.B., ¶ 17. Before a court may terminate parenting rights, there must be an “appropriate” treatment plan that the parent failed to comply with. Section 41-3-609(l)(f), MCA. This Court has not specifically defined what constitutes an “appropriate” treatment plan as a matter of law and, indeed, no such bright-line definition is possible given the unique circumstances existing in each case. In re M.M., 271 Mont. 52, 56, 894 P.2d 298, 301 (1995). In determining whether a treatment plan was appropriate, one consideration is whether the parent was represented by counsel and stipulated to the treatment plan. In re M.M., 271 Mont. at 56, 894 P.2d at 301. Here, both Mother and her counsel stipulated to the treatment plan. While this fact does not establish that the plan was appropriate, it is entitled to consideration. In re M.M., 271 Mont. at 56, 894 P.2d at 301.
¶21 By statute, every treatment plan must identify the problems or conditions that resulted in the abuse or neglect of the child and treatment goals and objectives that will address those conditions. Section 41-3-443(2), MCA. The particular problems facing both the parent and the child should also be considered in determining the appropriateness of a treatment plan. In re M.M., 271 Mont. at 56, 894 P.2d at 301. The statute addressing treatment plans specifically lists the requirement that the parent “obtain and follow through with alcohol or substance abuse evaluation and counseling, if necessary” as a permissible provision in a treatment plan. Section 41-3-443(3)(d), MCA.
¶22 Mother argues that the Department’s and District Court’s failure to include the requirement that Mother obtain and follow through with a substance abuse evaluation and treatment made the treatment plan ineffective, and left Mother ill equipped to complete the plan’s requirements in a reasonable time. We admit that it is difficult to understand why the treatment plan did not require substance abuse evaluation and treatment when it was apparently clear to everyone involved that the primaiy problem with Mother’s parenting was her substance abuse. Moreover, § 41-3-443(3Xd), MCA, specifically contemplates that chemical dependency evaluation and treatment will be appropriate requirements in some circumstances, and the circumstances here would certainly seem to warrant that requirement. However, the treatment plan’s omission of that requirement does not necessarily render it inappropriate.
¶23 Mother’s argument rests on the assumption that she would have gotten sober and been able to complete her treatment plan if she had been required to receive a chemical dependency evaluation and complete treatment. As evidence of this, she points to her success in Drug Treatment Court which she views as her first opportunity for drug treatment.
¶24 However, Mother received the functional equivalent of a chemical dependency evaluation, and she was at least offered treatment through the Department, if not required to seek it. In his psychological evaluation, Dr. Smelko found that Mother had a serious drug problem and recommended treatment. We see no functional distinction between Dr. Smelko’s evaluation, which concluded Mother suffered a serious drug problem that required treatment, and a chemical dependency evaluation, which presumably would have come to the same conclusion. Moreover, the CPS testified that she gave Mother a list of chemical dependency evaluators and informed Mother that the Department would pay for an evaluation and any recommended treatment. Mother disputes that she was ever offered chemical dependency evaluation or treatment. It is apparent, however, that the District Court credited the CPS’s testimony over Mother’s. As an appellate court, we must accept the District Court’s credibility determination. See M. R. Civ. P. 52(aX6) (“the reviewing court must give due regard to the trial court’s opportunity to judge the witnesses’ credibility”); Garrison v. Averill, 282 Mont. 508, 518, 938 P.2d 702, 708 (1997) (in the face of conflicting testimony, “it is within the province of the trier of fact to weigh the evidence and determine the credibility of witnesses; we will not substitute our judgment for that of the trier of fact on such matters”).
¶25 In essence, the difference between what Mother received and what she argues she should have received is the difference between being offered help with her drug problem, and being required to get help with her drug problem. The treatment plan identified Mother’s drug problem as a major source of Mother’s parenting problems. The only task it required her to complete in order to address her drug problem, however, was to abstain from all drugs and alcohol. While it is reasonable to assume that an addict will require help to abstain from drugs and alcohol, Mother was offered that help when the CPS gave her a list of chemical dependency evaluators and told her the Department would pay for the evaluation and any recommended treatment. The treatment plan Mother received required her to remain drug free and left it to Mother and the Department to work out how to accomplish that objective; the plan Mother argues she should have received would have required what was only offered. The difference between these two plans does not render the approved plan inappropriate.
¶26 More importantly, the District Court’s termination order is largely predicated on the needs of the children, rather than Mother’s failure to complete the treatment plan. We have long held, and the District Court correctly noted, that “the best interests of the children are of paramount concern in a parental rights termination proceeding and take precedence over the parental rights.” In re DA., 2008 MT 247, ¶ 21, 344 Mont. 513, 189 P.3d 631; In re C.A.R., 214 Mont. 174, 182, 693 P.2d 1214, 1219 (1984); In re Bad Yellow Hair, 162 Mont. 107, 112, 509 P.2d 9, 12 (1973). A child’s need for a permanent placement in a stable, loving home supersedes the right to parent a child. In re DA, ¶ 21. For that reason, the law requires that, “[i]f a child has been in foster care under the physical custody of the state for 15 months of the most recent 22 months, the best interests of the child must be presumed to be served by termination of parental rights.” Section 41-3-604(1), MCA.
¶27 Even if we assume for the sake of argument that failing to require a chemical dependency evaluation and treatment violated Mother’s rights, the children’s best interests outweigh Mother’s right to parent. Mother does not argue that the District Court’s conclusion that termination was in the best interests of the children was incorrect, and our review of the record shows it was supported by sufficient evidence. The children had already been in foster care for over 15 months, giving rise to the statutory presumption that their best interest was served by termination of Mother’s rights. Section 41-3-604(1), MCA. The testimony at the hearing demonstrated that Mother would require at least six to nine months more sobriety before she would be stable enough to parent, and the Department had legitimate concerns about Mother’s ability to provide housing and financial support for four children by herself while trying to meet all of the demands of Drug Treatment Court and the difficulties of early sobriety. The guardian ad litem, child protection specialist, and family therapist all testified that termination of Mother’s rights was in the children’s best interest.
¶28 Mother requests that we remand to the District Court with instructions to give her more time to prove her sobriety and work her treatment plan. It is not reasonable, however, for the courts to force children to adjust their timelines and subordinate their needs to meet their parents’ timelines. See, e.g., In re DA., ¶ 26 (holding that, while parents were making progress in getting sober and completing their treatment plans, the district court did not abuse its discretion when it concluded the best interests of the children weighed against giving the parents more time to complete their treatment plans). Although Mother is to be commended for her efforts and success in maintaining her sobriety thus far, granting the relief she requests would necessarily mean placing her rights above the best interests of the children — that we cannot do.
¶29 2. Was Mother's counsel ineffective for failing to advocate for inclusion of a chemical dependency evaluation in the treatment plan?
¶30 Mother argues that her counsel was ineffective for failing to object to the treatment plan when it did not require a chemical dependency evaluation and treatment. In a termination of parental rights proceeding, a parent has a due process right to effective assistance of counsel. In re A.S., 2004 MT 62, ¶ 20, 320 Mont. 268, 87 P.3d 408. This Court has adopted “benchmark, although nonexclusive, criteria” for evaluating effectiveness of counsel in termination proceedings. In re AS., ¶ 27. The first factor requires consideration of counsel’s experience and training representing parents in termination proceedings, and the second is the quality of advocacy demonstrated at the hearing. In re C.M.C., 2009 MT 153, ¶ 30, 350 Mont. 391, 208 P.3d 809 (citing In re A.S., ¶ 26). Even if counsel’s performance is found to be ineffective under these criteria, the parent must have suffered prejudice as a result. In re C.M.C., ¶ 30 (citing In re A.S., ¶ 31). Mother requests that we remand to the District Court for further factual development of the record regarding the criteria for evaluating effectiveness of counsel in a termination proceeding. See In re Mental Health of K.G.F., 2001 MT 140, ¶ 93, 306 Mont. 1, 29 P.3d 485 (remanding for a hearing to develop the factual record regarding counsel’s effectiveness).
¶31 Mother’s claim of ineffective assistance of counsel suffers the same problems as Mother’s argument that the treatment plan was inappropriate. The difference between the treatment plan Mother received and the one she argues she should have received boils down to the difference between being offered help with addressing her drug problem and being required to get the help. Since we have concluded that this difference did not render the treatment plan inappropriate, we must likewise conclude that Mother has failed to demonstrate that she suffered prejudice as a result of counsel’s failure to object to the treatment plan. See In re C.M.C., ¶ 30 (even if counsel’s assistance was ineffective, the parent must have suffered prejudice to be entitled to relief). Mother’s claim of ineffective assistance of counsel, therefore, is unavailing.
¶32 3. Was the District Court required to disclose to the parties transcripts of its in-chambers interviews with the children?
¶33 Mother argues the District Court erred when it declined to provide the parties with transcripts of the court’s in-chambers interviews, and that the District Court’s error left Mother unable to formulate appropriate arguments regarding how the children’s wishes relate to their best interest and Mother’s current circumstances.
¶34 In a previous ruling, we held that district courts may conduct in-chambers interviews of children in abuse and neglect cases. In re M.L.H., 220 Mont. 288, 292-93, 715 P.2d 32, 34-35 (1986). Our holding relied on the statute that provides for in-chambers interviews of children in marital dissolution proceedings:
The court may interview the child in chambers to ascertain the child’s wishes as to residence and parental contact. The court may permit counsel to be present at the interview. The court shall cause a record of the interview to be made and to be part of the record in the case.
Section 40-4-214, MCA. We specifically cited to the commissioners’ note to that statute, which states:
The general rule is that the judge may interview the child in chambers. It is often important for the judge to discover the attitudes and wishes of the child, and there is no reason to subject the child to the formality of the courtroom and the unpleasantness of cross-examination. This provision does not require the judge to permit counsel to be present at the interview, but he must make some kind of record of the interview (using a court reporter or a tape recorder) so that counsel for all parties will have access to the substance of the interview.
Section 40-4-214, MCA (emphasis added). Based on that language, we reasoned that “the parties to the [abuse and neglect] hearing have just as great a need for access to the substance of the interview as do parties to a custody in dissolution hearing.” In re M.L.H., 220 Mont, at 293, 715 P.2d at 35. We further noted that, “as a matter of due process, a record made in-chambers provides this Court access to evidence on which the District Court may have relied in making its order.” In re 220 Mont. at 293, 715 P.2d at 35. We accordingly held that “a district court may conduct an in-chambers interview of children in an abuse, neglect and dependency proceeding. However, once the District Court, in its discretion, decides to hold such an interview it must make a record of the interview.” In re M.L.H., 220 Mont. at 293, 715 P.2d at 35.
¶35 Both the commissioners’ note and our ruling in In re M.L.H. indicate that the purpose of the transcript is partly to allow the parties to know the substance of the interviews, which implies that the district court must disclose the transcript upon request. The commissioners’ note, however, is not law. See Baxter v. State, 2009 MT 449, ¶ 42, 354 Mont. 234, 224 P.3d 1211 (commission comments do not carry the weight of law); § 1-11-103(5), MCA (“Unless specifically and expressly adopted as part of the law by the legislature, annotations [and] code commissioner notes... included in the Montana Code Annotated may not be construed as part of the legislative text....”).
¶36 The language of the statute itself does not support an interpretation requiring the district court to disclose the transcript upon request. Subsection (2) of § 40-4-214, MCA, allows the district court to seek the advice of professionals and requires the court to make the advice received available to counsel upon request: “The court may seek the advice of professional personnel, whether or not employed by the court on a regular basis. The advice given must be in writing and made available by the court to counsel upon request.” Section 40-4-214(2), MCA (emphasis added). Subsection (1), providing for in-chambers interviews of children, does not include similar language requiring the court to disclose the substance of the interviews upon request. When the legislature includes language in one part of a statute, but omits it from a related statute or another part of the same statute, the omission is presumed to be intentional. Cross v. VanDyke, 2014 MT 193, ¶ 19, 375 Mont. 535, 332 P.3d 215 (citing Keene Corp. v. U.S., 508 U.S. 200, 208, 113 S. Ct. 2035, 2040 (1993)).
¶37 Since we are instructed not to insert into a statute what has been omitted, we cannot read into the statute a requirement that the district court disclose the transcript of the interview to the parties upon request. See § 1-2-101, MCA (“In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted.”) Therefore, we hold that the statute does not require the district court to disclose the transcript of the interview to counsel for the parties. To the extent that In re M.L.H suggests otherwise, it is overruled.
¶38 We note, however, that § 40-4-214, MCA, grants the district court discretion to permit counsel for the parties to be present at the in-chambers interview. Section 40-4-214, MCA (“The court may permit counsel to be present at the interview.”). The legislature thus granted the district court discretion to allow or not allow the parties to know the substance of the interviews. This does not mean that the district court’s discretion to disclose or withhold the substance of the interviews is unfettered. Due process considerations may require disclosure in certain instances, particularly where the district court relies on information from the interviews in reaching its determination. But those are not the facts here. We have reviewed the transcripts of the in-chambers interviews and the court’s findings and conclusions and found nothing suggesting the District Court relied on any of the information from the in-chambers interviews of the children in making its termination decision. Hence, we are satisfied that the District Court acted within its discretion when it denied Mother’s request for transcripts of the interviews.
CONCLUSION
¶39 While the treatment plan might have been more effective if it had required Mother to obtain a chemical dependency evaluation and treatment, rather than simply requiring that Mother abstain from drugs and alcohol and leaving it to the Department to offer Mother the evaluation and treatment, we are not convinced that this distinction is sufficient to render the treatment plan inappropriate. Similarly, we hold counsel's failure to object to the treatment plan was not prejudicial. The District Court’s termination decision rested on the best interests of the children and the reality that Mother could not be expected to be ready to resume parenting in a reasonable amount of time. Finally, the District Court properly exercised its discretion to deny Mother’s requests for the transcripts. Affirmed.
JUSTICES McKINNON, COTTER, BAKER and RICE concur.
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court,
fl Kyle McKeever appeals from the District Court’s order of March 5,2013, denying his motion to suppress evidence. We affirm.
¶2 The issue on appeal is whether the District Court properly denied McKeever’s motion to suppress the contents of the prescription bottle found during the arrest.
BACKGROUND
¶3 In December 2012 a Glendive Police Department officer stopped McKeever’s car after recognizing him as a person who had a suspended driver’s license. The officer noted that McKeever was nervous, trembling and swallowing frequently. McKeever stated that he could not go to jail, and that he was on his way to the public library to get driving directions to Great Falls. After confirming that McKeever’s license was suspended, the officer placed McKeever under arrest. McKeever consented to a search of his vehicle, and the officer called for backup and a second officer arrived. The officer conducted a pat-down search and discovered a prescription medication bottle in the cuff of McKeever’s pants leg. The prescription was for a controlled substance called Alprazolam and the label indicated that it had been issued to a person named Motschenbacher.
¶4 The officer asked McKeever what was in the bottle and McKeever did not respond. One or both of the officers opened the bottle and saw that it contained tissue paper over a few pills. McKeever told the officers he did not know where he got the bottle and did not know why it was in his pants cuff. At some point during this process one of the officers handcuffed McKeever and told him he would be taken to the Dawson County Detention Center.
¶5 At the Detention Center McKeever was cited for driving with a suspended or revoked license. The officer subsequently confirmed that the pills in the bottle were a controlled substance and cited McKeever for criminal possession of dangerous drugs.
¶6 In 2013 the State charged McKeever with felony criminal possession of dangerous drugs, § 45-9-102, MCA. McKeever entered a plea agreement with the State after the District Court denied his motion to suppress the drugs seized at the time of arrest. McKeever pled guilty to the drug possession offense, reserving the right to appeal the District Court’s pre-trial suppression order. On May 24,2013, the District Court sentenced McKeever to a three-year deferred imposition of sentence, as specified in the plea agreement.
¶7 McKeever filed a timely notice of appeal, but his opening brief was not filed until July 18, 2014. The State’s response brief was filed October 15, 2014, and McKeever’s reply brief was filed February 27, 2015.
STANDARDS OF REVIEW
¶8 This Court reviews a district court’s decision on a motion to suppress evidence to determine whether the findings of fact are clearly erroneous, and whether the district court correctly applied the law. State v. Hilgendorf, 2009 MT 158, ¶ 11, 350 Mont. 412, 208 P.3d 401. We will affirm a district court when it reaches the correct result, even if it is for the wrong reason. In re BAM, 2008 MT 311, ¶ 24, 346 Mont. 49, 192 P.3d 1161.
DISCUSSION
¶9 Issue: Whether the District Court properly denied McKeever’s motion to suppress the contents of the prescription bottle found during the arrest.
¶10 The District Court’s order denying the motion to suppress determined that McKeever did not contend that the vehicle stop was unlawful and did not contend that the officers improperly conducted a pat-down search. While McKeever accepted that discovery of the pill bottle was lawful, he objected to the officers’ opening it without a search warrant. The District Court found that the search was incident to the arrest pursuant to § 46-5-102, MCA. The pill bottle “appeared to be contraband” because the prescription was in the name of another person and was for a controlled substance. Because McKeever did not provide a reasonable explanation for his possession of the bottle, the District Court determined that the officers “would have been remiss in their duty” to not check the contents of the bottle. While the bottle contained a controlled substance, if it had been empty or had contained something other than a controlled substance, there would have been no crime.
¶11 The District Court determined that because the officers “obviously had probable cause” to obtain a search warrant for the pill bottle, they would have inevitably discovered its contents. Alternatively, because McKeever was in custody, the District Court determined that a “standard inventoiy search” at the Detention Center would have discovered the contents of the pill bottle, citing Hilgendorf¶ 26. The District Court determined that the officers therefore would have inevitably discovered the pills and denied the motion to suppress.
¶12 On appeal McKeever contends that opening the pill bottle was an illegal search because he was under arrest and handcuffed, and opening the bottle did not serve to protect the officers, did not prevent him from escaping, did not relate to the driving offense, and was not justified by exigent circumstances. McKeever disagrees with application of the concept of inevitable discovery because it would “eviscerate” constitutional protections against unreasonable searches. He also contends that concluding the pills would have been discovered upon booking at the detention center is speculation, and that the State presented no evidence as to the “standard protocol for inventory searches.”
¶ 13 On appeal the State contends that there was no “search” of the contents of the prescription bottle because McKeever by his words and actions disclaimed any personal privacy interest in the prescription bottle. A search is not illegal if the defendant has disclaimed an interest in the object seized, § 46-5-103, MCA. He therefore lacked a reasonable expectation of privacy in the prescription bottle, and without a violation of privacy there can be no unreasonable search and the search was not illegal. The prescription was issued to another person who was not present; it was for a controlled substance, § 50-32-229(2)(a), MCA; and the bottle was therefore contraband that could be used in a prosecution, § 46-5-103(2), MCA.
¶14 The Fourth Amendment to the United States Constitution protects persons from unreasonable searches and seizures, and Article n, Sections 10 and 11 of the Montana Constitution provide similar but heightened protections. State v. A Blue 1993 Chevrolet Pickup, 2005 MT 180, ¶ 9, 328 Mont. 10, 116 P.3d 800. These provisions generally require that a search be conducted pursuant to a warrant based upon probable cause. State v. Dickinson, 2008 MT 159, ¶ 18, 343 Mont. 301, 184 P.3d 305. Under the Montana Constitution a “search” occurs if governmental action breaches a person’s reasonable expectation of privacy. State v. Goetz, 2008 MT 296, ¶ 25, 345 Mont. 421, 191 P.3d 489. Whether a “search” occurred in a particular case requires determining that the person challenging the state’s action had an actual expectation of privacy that society is willing to recognize as reasonable. Goetz, ¶ 27.
¶15 The theory of inevitable discovery relied upon by the District Court is an exception to the requirement for a search warrant and can allow the use of evidence that might otherwise be excluded. Dickinson, ¶ 18. The inevitable discovery rule posits that evidence obtained without a search warrant may nonetheless be used against the defendant if law enforcement officers would clearly have been entitled to a warrant or would have inevitably discovered the evidence in a manner that did not require a warrant. State v. Ellis, 2009 MT 192, ¶¶ 48-49, 351 Mont. 95, 210 P.3d 144. Implied within the application of the rule is a conclusion that a search warrant was required, and that the evidence was seized in violation of the warrant requirement. We do not resolve this case through application of the inevitable discovery rule, but conclude that there was no search in the constitutional sense because the evidence does not demonstrate that McKeever had a reasonable privacy interest in the contents of the prescription bottle.
¶16 The initial search in this case discovered the prescription bottle in the cuff of McKeever’s trousers. That search was lawful as a search incident to arrest and McKeever does not contend otherwise. Section 46-5-102, MCA; Dickinson, ¶ 18; State v. Lanegan, 2004 MT 134, ¶ 13, 321 Mont. 349, 91 P.3d 578. McKeever contends that there was a second search when one or both of the officers opened the bottle to determine its contents. However, if McKeever had no reasonable expectation of privacy, there was no constitutional “search.” State v. Hill, 2004 MT 184, ¶ 24, 322 Mont. 165, 94 P.3d 752. Our inquiry is whether under the facts of this case, the Court can conclude McKeever had an actual expectation of privacy and, if so, whether that is an expectation that society is willing to recognize as objectively reasonable. Hill, ¶ 24.
¶17 When the person claiming an unconstitutional search does not articulate any reason other than his mere presence to support an expectation of privacy, the argument “is not compelling,” and has the effect of a voluntaiy relinquishment of interest in the object. Hill, ¶¶ 26,28. A voluntary relinquishment of interest in an item is akin to abandonment for assessing whether the person has a protectable expectation of privacy. 1993 Chevrolet, ¶ 14. The overriding inquiry in this context is intent, which may be inferred from both statements and acts of the person. 1993 Chevrolet, ¶ 15.
¶18 In this case the totality of the circumstances demonstrates that McKeever had no reasonable expectation of privacy in the pill bottle. When the prescription bottle was found during the initial search, McKeever did not remain silent but expressly disclaimed knowledge of where the bottle came from or how it got into his cuff. He claimed no ownership of the bottle or its contents. The name on the prescription was not his, and the prescription was for a controlled substance. These circumstances completely undermine McKeever’s argument that he had a reasonable expectation of personal privacy in the prescription bottle. To the contrary, he virtually abandoned it once it was discovered. In Hill the defendant was stopped for a speeding violation, which led ultimately to the discovery of a large quantity of drugs in the trunk of the car he was driving. In response to the officer’s questions, Hill stated that there was nothing in the trunk of the car, and, when duffle bags were found, said that they were not his. This Court held that Hill had “voluntarily relinquished any interest in the vehicle’s trunk and its contents.” Hill, ¶ 28. Therefore, any claimed expectation of privacy was “not objectively reasonable.” McKeever did much the same here, relinquishing any interest in the pill bottle.
¶19 In the absence of an articulable and supportable right of privacy in the prescription bottle, there was no search in the constitutional sense.
¶20 The District Court therefore achieved the correct result by denying McKeever’s motion to suppress.
¶21 Affirmed.
JUSTICES WHEAT, SHEA and BAKER concur.
|
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Kelly Mitchell appeals from the order of the Montana Twenty-Second Judicial District Court, Carbon County, denying his petition to reinstate his driver’s license. We affirm.
ISSUE
¶2 We review the following issue: Did the District Court err when it decided that Mitchell violated § 61-8-328, MCA, by crossing the center line of a road with his vehicle?
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Police Officer Matthew Grieshop was patrolling a road near Red Lodge on May 31, 2014. At around 1:00 a.m., he began following two vehicles. The vehicle furthest from Grieshop was operated by Mitchell. After some time, the vehicle between Grieshop and Mitchell passed Mitchell’s vehicle. As it did so, Mitchell’s vehicle crossed over the yellow center line of the road. While Grieshop was following Mitchell, Mitchell’s vehicle also crossed the fog line on the right side of the road. After observing these incidents, Grieshop stopped Mitchell’s vehicle.
¶4 Grieshop issued Mitchell a citation for crossing the center line and then sought to administer a breath alcohol test. Mitchell refused to perform the test, and Grieshop arrested him for driving under the influence of alcohol or drugs. Pursuant to § 61-8-402, MCA, Mitchell’s driver’s license was suspended.
¶5 On June 24, 2014, Mitchell petitioned the District Court to reinstate his driver’s license. Following a hearing on July 9,2014, the District Court denied Mitchell’s petition. Reviewing video from Grieshop’s vehicle, it decided that “Mitchell’s vehicle slightly crossed over the yellow center line.” Consequently, it concluded that Mitchell violated § 61-8-328, MCA, and that Grieshop had particularized suspicion sufficient to justify stopping Mitchell. The sole issue presented to the District Court was whether Grieshop had particularized suspicion to stop Mitchell’s car.
STANDARD OF REVIEW
¶6 We review a district court’s legal conclusions for correctness. E.g., Brown v. State, 2009 MT 64, ¶ 8, 349 Mont. 408, 203 P.3d 842.
DISCUSSION
¶7 Did the District Court err when it decided that Mitchell violated § 61-8-328, MCA, by crossing the center line of a road with his vehicle?
¶8 Although Mitchell generally argues that his driver’s license should be reinstated, the issue he presents is much narrower. The issue we consider in this Opinion is correspondingly narrow. Mitchell argues that Grieshop did not have particularized suspicion to justify his stop of Mitchell’s vehicle. Mitchell acknowledges that any statutory violation would have been sufficient to establish particularized suspicion for a traffic stop. See State v. Haldane, 2013 MT 32, ¶ 26, 368 Mont. 396, 300 P.3d 657. He argues, however, that it is not a statutory violation, as a matter of law, to momentarily cross a road’s yellow center line with a vehicle. To support this argument, Mitchell quotes § 61-8-328, MCA, which states that:
Whenever a roadway has been divided into two or more clearly marked lanes for traffic... [a] vehicle must be operated as nearly as practicable entirely within a single lane and may not be moved from the lane until the operator has first ascertained that the movement can be made with safety.
Mitchell contends that the phrase “as nearly as practicable” indicates that the Legislature contemplated that vehicles would occasionally move from their lane, and he argues that the Legislature did not intend to make a momentary deviation from a lane of traffic a statutory violation.
¶9 When interpreting a statute, we first consider the plain meaning of the statutory language. We will not look any further if the meaning of the statute is clear on its face. Mont. Sports Shooting Ass’n v. State, 2008 MT 190, ¶ 11, 344 Mont. 1, 185 P.3d 1003; see § 1-2-101, MCA. As part of the plain meaning analysis, we consider the context in which the language is used. See Mont. Sports Shooting Ass’n, ¶ 11 (“We construe a statute by reading and interpreting the statute as a whole, ‘without isolating specific terms from the context in which they are used by the Legislature.’ ” (quoting City of Great Falls v. Morris, 2006 MT 93, ¶ 19, 332 Mont. 85, 134 P.3d 692)).
¶ 10 Mitchell’s interpretation of § 61-8-328, MCA, is not consistent with the language of the statute. A thing is “practicable,” according to its ordinary definition, if it is reasonably possible to accomplish or feasible in a particular situation. Black’s Law Dictionary 1361 (Biyan A. Gamer ed., 10th ed. 2014); The American Heritage Dictionary of the English Language 1383 (5th ed. 2011). Considering this ordinary definition — especially in light of the statute’s statement that “[a] vehicle ... may not he moved from the lane until the operator has first ascertained that the movement can be made with safely” (emphasis added) — the meaning of § 61-8-328, MCA, is clear from its plain language. The plain meaning of the statute is not that momentarily crossing the center line is permissible, but that moving from a lane of traffic is usually prohibited to the extent that it is feasible for a vehicle to be operated within the lane of traffic. Mitchell does not argue that it was not practicable for him to operate his vehicle inside the lane of traffic. Bather, he only argues that the statute provides an exception for any momentary deviation from a lane of traffic. The plain language of the statute, however, does not provide such an exception for any momentary deviation.
¶11 Despite Mitchell’s contention otherwise, our decision in State v. Lafferty, 1998 MT 247, 291 Mont. 157, 967 P.2d 363, is not inconsistent with this conclusion. In that case, we stated that § 61-8-328, MCA, “relates to moving from a marked traffic lane to another marked traffic lane. Here, [the Defendant] did not move from one of the marked eastbound traffic lanes.... She merely crossed onto and barely over the fog line on the far right side of the right traffic lane in which she was travelling.” Lafferty, ¶ 14. Mitchell contends that we decided that the defendant in Lafferty did not violate § 61-8-328, MCA, because momentarily crossing a fog line or a center line is not a violation. This is incorrect. We did not find a violation because the defendant did not enter another lane of traffic. In this case, by crossing the center line, Mitchell did enter a different lane of traffic. For this reason, the situation in the present case is distinguishable from the facts on which our decision in Lafferty was based.
¶12 For the foregoing reasons, the District Court did not err by deciding that Mitchell violated § 61-8-328, MCA, when he directed his vehicle across the yellow center line.
CONCLUSION
¶13 Mitchell’s argument thathe did not violate § 61-8-328, MCA, when he briefly crossed a road’s yellow center line with his vehicle is incorrect. As this was the only basis on which he challenged his traffic stop and the resulting suspension of his driver’s license, we affirm the District Court’s order denying Mitchell’s petition to reinstate his driver’s license.
CHIEF JUSTICE McGRATH, JUSTICES McKINNON, BAKER and RICE concur.
This is not to say that a violation will exist every time a vehicle crosses a yellow center line or otherwise leaves its lane of traffic. This decision does not foreclose the possibility that it will not be practicable to remain in a lane of traffic in all situations. We merely decide, based on the narrow issue presented by Mitchell, that momentary deviations are not excepted per se.
|
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court.
¶1 This matter comes to the Court pursuant to M. R. App. P. 15 on a question of Montana law certified by the United States Court of Appeals for the Ninth Circuit:
Whether, in a case involving a claim of damages by a third party, an insurer who does not receive timely notice according to the terms of an insurance policy must demonstrate prejudice from the lack of notice to avoid defense and indemnification of the insured.
This Court accepted the certified question by Order of July 8,2014, and the parties and several amid curiae have filed briefs.
¶2 We answer the question: yes.
BACKGROUND
¶3 According to facts supplied by the Court of Appeals, this case originally arose from a civil action filed in the Montana Third Judicial District Court. In March 2010 GTL filed suit against Greytak and Tanglewood (hereafter, Greytak) for non-payment of an obligation arising from a construction project. GTL was insured by Atlantic Casualty under a commercial general liability policy. In March 2010 Greytak sent a letter to GTL asserting that it had grounds for various counterclaims involving construction defects, and in November 2010 Greytak filed counterclaims against GTL in the state court action.
¶4 In April 2011 GTL and Greytak entered a settlement agreement that required GTL to notify Atlantic of Greytak’s counterclaims. GTL and Greytak also agreed that if Atlantic did not appear to defend the case and did not file a declaratory action on the coverage issue, GTL would allow judgment to be entered against it and in favor of Greytak for $624,685.14 plus costs. If Atlantic did appear to defend, Greytak could pursue its claims to judgment; Greytak would look only to Atlantic for recovery; and Greytak would insure that GTL would have no responsibility for any resulting judgment. Finally, the agreement provided that if Atlantic filed a declaratory action, Greytak would defend with the purpose of establishing coverage for GTL. On May 23, 2011, GTL notified Atlantic of Greytak’s counterclaims. Greytak separately notified Atlantic of its counterclaims on August 5,2011.
¶5 On January 23, 2012, Atlantic sued GTL and Greytak in the United States District Court for the District of Montana, seeking a declaration that it was not required to defend GTL from Greytak’s counterclaims or to pay any judgment. GTL defaulted and is not participating in the case. Atlantic’s policy issued to GTL stated that the insured “must see to it that we are notified as soon as practicable of an ‘occurrence’ or an offense which may result in a claim... if a claim is made or ‘suit’ is brought against any insured, you must notify us as soon as practicable. You must see to it that we receive written notice of the claim or ‘suit’ as soon as practicable.” Atlantic sought a declaration that it was not required to provide coverage of Greytak’s counterclaims because GTL had not provided timely notice as required by the policy language.
¶6 The United States District Court granted Atlantic’s motion for summary judgment and denied Greytak’s motion for summary judgment. The District Court found that Atlantic did not have timely notice of Greytak’s claims against GTL and therefore was excused from providing coverage under the policy. The United States District Court found that Montana law did not require Atlantic to demonstrate that it was prejudiced by GTL’s failure to provide timely notice of Greytak’s counterclaims. Greytak appealed to the United States Court of Appeals for the Ninth Circuit.
DISCUSSION
¶7 In the declaratory judgment action, the United States District Court concluded that Atlantic had no duty to defend or indemnify GTL on Greytak’s claims because GTL’s notice of the claim to Atlantic was untimely. The District Court found that Atlantic’s Commercial General Liability policy was clear in its requirement that GTL provide timely (“as soon as practicable”) notice of the Greytak counterclaims. The District Court, relying on Steadele v. Colony Insurance, 2011 MT 208, 361 Mont. 459, 260 P.3d 145, concluded that compliance with the notice requirement in the insurance contract was a condition precedent to coverage, barring recovery under the policy unless the requirement is met or waived. Reviewing the facts, the District Court concluded that Greytak’s April 30, 2010 demand letter to GTL triggered the notice requirement in the Atlantic policy, and that GTL’s notice to Atlantic almost a year later was not timely. The District Court, again relying upon Steadele, held that Montana law did not require Atlantic to show that it was prejudiced by GTL’s untimely notice, only that the notice was untimely.
¶8 The issue presented by the certified question is whether Montana law applies the “notice-prejudice” rule to the insurance policy that Atlantic issued to GTL; specifically, whether the policy provision requiring GTL to notify the insurer of a covered event “as soon as practicable” can be invoked to bar coverage without a consideration of whether a delay in notification caused prejudice to Atlantic.
¶9 Several cases have considered the status of the notice-prejudice rule under Montana law. In State Farm Mutual Ins. Co. v. Murnion, 439 F.2d 945 (9th Cir. 1971), the Court considered an insurance policy that required notification of an occurrence as soon as practicable. Applying Montana law, the Court held that while notice requirements in an insurance policy are given effect and are a condition precedent to the insurer’s liability, the insured may provide proof of “timeliness of notice and excuse for delay” on the issue of whether the insurer is bound to provide coverage. In Sorensen v. Farmers Ins. Exch., 279 Mont. 291, 927 P.2d 1002 (1996), the issue was whether the insured’s settlement with a third party without notifying its insurer abrogated the insurer’s duty to provide coverage. This Court applied the “no prejudice” rule adopted in other states, holding that “absent some showing of material prejudice to the underinsurance carrier, a claim for underinsured motorist coverage may not be precluded on a technicality.” Sorenesen, 279 Mont, at 295, 927 P.2d at 1004. We applied the no prejudice rule as a matter of public policy, because denying coverage because of an action that can have no material effect on the insurer does not further the purpose of having insurance. Sorensen, 279 Mont. at 296, 927 P.2d at 1005, followed in Augustine v. Simonson, 283 Mont. 259, 264, 940 P.2d 116, 119 (1997). See also XL Specialty Ins. Co. v. Patrol Helicopters, Inc., 2009 U.S. Dist. Lexis 118475 (D. Mont.) (Montana, consistent with the law in the majority of jurisdictions, would require an insurer to show prejudice before avoiding liability based upon the insured’s failure to provide notice of a claim as soon as practicable); BNSF Railway v. Cringle, 2010 MT 290, 359 Mont. 20, 247 P.3d 706 (procedural time limits in statutes and regulations are subject to equitable application when a party fails to comply).
¶10 In Steadele this Court considered application of the notice-prejudice rule, but without expressly using that term in the analysis. In that case, homeowners sued a contractor over defects in their home and in December 2008 took a default judgment when the defendant failed to appear. Colony insured the defendant but never received notice of the controversy or the lawsuit until several months after judgment of $1.8 million had been entered against its insured. Colony denied the plaintiff homeowners’ demand to pay the default judgment because it had not received timely notice of the claim from its insured. The homeowners sued, and the district court granted summary judgment to Colony based upon the late notice. On appeal Colony argued that the failure to provide notice until after judgment was entered against its insured was a material breach of the insurance contract that caused Colony severe prejudice and therefore terminated its obligation under the policy.
¶11 This Court noted that exclusions from insurance coverage are to be narrowly and strictly construed because they are “contrary to the fundamental protective purpose of an insurance policy,” and that policies are to be construed in favor of the insured and in favor of providing coverage. Steadele, ¶¶ 18-19; see also § 28-1-408, MCA, providing that a condition that results in a forfeiture is to be strictly interpreted against the party for whose benefit it was created. This Court also noted that the purpose of the notification requirement was to provide the insurer with the opportunity to “defend its interests and to prevent or mitigate adverse judgments.” We cited older cases that held that notification is a condition precedent to coverage and that failure of notification will result in a bar to recovery from the insurer. Steadele, ¶¶ 21-22. Ultimately we determined that because Colony did not receive notice until after a judgment was entered against its insured, the failure to give notice was not de minimis, and Colony was “prejudiced in that it was deprived of the ability to investigate, to locate witnesses, to appoint counsel, to engage in discovery, to negotiate a settlement and to develop a trial strategy.” Steadele, ¶¶ 28-29.
¶12 Steadele should not be read to renounce the notice-prejudice rule. While the opinion did not expressly reference the rule, this Court upheld summary judgment for the insurer based in part upon our conclusion that the insurer had been prejudiced by the failure of notice and therefore was not required to provide coverage. We pointed to this conclusion of Steadele in Newman v. Scottsdale Ins. Co., 2013 MT 125, ¶¶ 65-66, 370 Mont. 133, 301 P.3d 348. However, Newman held that an insurer waives the ability to rely upon a lack of notice required by the policy by relying upon other reasons for denying coverage. Newman, 168.
¶13 A majority of the states have adopted the notice-prejudice rule in insurance coverage disputes, requiring that the insurer demonstrate that it was materially prejudiced by not having received prompt notice or notice as soon as practicable of an event that could trigger coverage. See Prince George’s County v. Local Govt. Ins. Trust, 879 A2d 81, 94, n. 9 (Ct. App. Md.), listing the thirty eight states and two territories that have adopted the rule as a matter of common law. Also as noted, this Court has adopted the notice-prejudice rule in several insurance dispute contexts, most recently in Estate of Gleason v. Central United Life Ins. Co, 2015 MT 140, ¶¶ 37-38, 379 Mont. 219, 350 P.3d 49, in the context of first-party (insured v. the insurer) insurance coverage disputes.
¶14 The public policy of Montana is to narrowly and strictly construe insurance coverage exclusions in order to promote the “fundamental protective purpose” of insurance. Steadele, ¶ 18; Newman, ¶ 35. An insured’s technical or illusory failure to comply with obligations of a policy will not automatically terminate coverage, and an insurer who does not receive timely notice required by the terms of an insurance policy must demonstrate prejudice from that lack of notice in order to avoid the obligation to provide defense and indemnification of the insured. This rule applies whether the claim arises from the insured as in Gleason or from a third party claiming damages as in the present case. The purpose of the notice-prejudice rule is to protect the insured or those claiming through the insured from a loss of insurance coverage over a technical violation of the policy when that violation is of no prejudicial consequence to the insurer. Nothing in Steadele should be construed to provide for any contrary rule. At the same time, a policy may include notice requirements, and an insured who fails to provide required notice to the insurer does so at his or her peril. If the insurer is able to show prejudice arising from the lack of notice, the insured may not be covered by the policy, as in Steadele.
¶15 Most of Atlantic’s arguments were directed to the merits of a prejudice inquiry, which is outside the scope of the certified question and which we decline to address.
¶16 The Court of Appeals certified the question:
Whether, in a case involving a claim of damages by a third parly, an insurer who does not receive timely notice according to the terms of an insurance policy must demonstrate prejudice from the lack of notice to avoid defense and indemnification of the insured.
Our answer is: Yes, an insurer who does not receive timely notice according to the terms of an insurance policy must demonstrate prejudice from the lack of notice to avoid defense and indemnification of tiie insured.
JUSTICES SHEA, WHEAT, BAKER and COTTER concur.
It is clear from the policy language that it does not impose a specific time within which the insured must provide notice to the insurer.
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JUSTICE BAEER
delivered the Opinion of the Court.
¶1 Karrie Lynn Serranía sued LPH, Inc., and Discovery Dental Group, PLLC (DDG), in the Fourth Judicial District Court, Missoula County, over their attempt to collect a disputed dental bill. After months of litigation, the District Court entered judgment and sanctions against Serranía and her counsel, Terry Wallace. Serranía and Wallace appeal. We address the following issues:
1. Whether the appeal is justiciable.
2. Whether the District Court correctly awarded LPH summary judgment on Serrania’s Fair Debt Collection Practices Act claim.
3. Whether the District Court abused its discretion in sanctioning Wallace.
¶2 We affirm all aspects of the judgment properly before us, with the exception of one portion of the sanctions.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In 2009, Serrania went to DDG with a toothache. She signed a contract before receiving treatment. The contract states, “Payment of all treatment and services rendered are my responsibility and I agree to pay collection and legal fees if any delinquent balance is placed with an agency or attorney for collection of suit.” The contract also states, “I understand that I am responsible for all costs and dental treatment.”
¶4 In July 2011, DDG referred Serrania’s account to LPH, a debt collection agency. DDG informed LPH that Serrania owed $1,112.13. The debt comprised costs for treatment rendered to Serrania, her then-husband, and her son, along with interest on unpaid amounts, and a fee for a bad check. LPH initiated steps to collect the debt. LPH mailed Serrania a letter that notified her of the debt and explained that if she did not dispute the debt within thirty days, LPH would presume the debt’s validity. After thirty days passed without dispute, LPH mailed Serrania a collections placement letter with charges for additional interest and collection fees. Serrania did not immediately pay the debt, nor did she advise LPH of a dispute within thirty days. A few months later, LPH filed a complaint against her in Missoula County Justice Court, but the complaint was eventually dismissed after Serrania filed counterclaims that exceeded the Justice Court’s jurisdiction.
¶5 In July 2012, Serrania sued LPH and DDG in the Fourth Judicial District Court, alleging that LPH violated the Fair Debt Collection Practices Act (FDCPA), that DDG committed credit defamation, and that both violated the Montana Consumer Protection Act. Serrania sought to recover approximately $650,000 in damages. LPH and DDG counterclaimed for breach of contract and unjust enrichment.
¶6 In December 2012 and January 2013, LPH and DDG jointly moved for partial summary judgment on their contract counterclaim, and LPH individually moved for partial summary judgment on Serrania’s FDCPA claim. Serrania responded to the joint motion for summary judgment on the contract counterclaim, but failed to respond to LPH’s motion on the FDCPA claim.
¶7 On February 27, 2013, the District Court held a pretrial conference. Wallace, Serrania’s attorney, failed to attend the conference. On LPH and DBG’s motion, the District Court ordered Wallace to pay $1,000 in sanctions each to counsel for LPH and DDG for the unwarned absence. The Court also entered summary judgment against Serranía on the contract and FDCPA claims. In the months that followed, Serranía moved to vacate the sanctions and moved for relief from the FDCPA summary judgment order, referring to that order as an “advisory opinion.”
¶8 In May 2013, counsel for LPH and DDG informed Serranía that they would move to dismiss their unjust enrichment counterclaim, as they had pled unjust enrichment in the alternative to their breach of contract counterclaim. Serranía nonetheless filed a motion for summary judgment on the unjust enrichment claim. In an e-mail to opposing counsel, Wallace explained this motion by writing that, “Plaintiff wants judgments against LPH and DDG.” LPH and DDG responded by moving to dismiss the unjust enrichment claim, which the District Court did. LPH also moved the court to impose sanctions, arguing that Serranía and Wallace’s conduct constituted vexatious litigation.
¶9 In July 2013, DDG moved to compel Serranía to respond to discovery requests asking her to identify the name of her employer, her employment position, and the nature of her job duties. LPH joined the motion. Serranía responded by moving to quash the discovery requests.
¶ 10 On December 2,2013, the District Court issued an order resolving a number of outstanding motions and issues, some of which are recounted above, but many of which are not for the sake of brevity. The court’s order set a show cause hearing for December 19, 2013, for Wallace to explain why the court should not sanction Serranía and Wallace for their conduct in the course of litigation. After that hearing, on January 7,2014, the court sanctioned Serranía and Wallace in the amount of $42,113.32 to be paid to LPH, and $32,647.94 to be paid to DDG. Additionally, the court sanctioned Wallace $10,000 for “his blatant lack of candor and his disrespectful conduct toward the Court and the legal process and his egregious abuses of the legal rights of the Defendants.”
¶11 Serranía underwent bankruptcy after the District Court issued judgment. Her debts resulting from the dental bill and the District Court’s orders were discharged. Nonetheless, Serranía now appeals the sanctions orders, as well as the contract and FDCPA summaiy judgment orders, and Wallace, through Serranía, appeals the sanctions against him.
STANDARDS OF REVIEW
¶12 Whether an appeal is justiciable is a threshold question that this Court determines before proceeding to the merits. Progressive Direct Ins. Co. v. Stuivenga, 2012 MT 75, ¶ 16-17, 364 Mont. 390, 276 P.3d 867. This Court reviews summary judgment orders de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. This Court reviews sanctions orders for abuse of discretion. Johnson v. Booth, 2008 MT 155, ¶ 13, 343 Mont. 268, 184 P.3d 289.
DISCUSSION
¶13 1. Whether Serrania’s appeal is justiciable.
¶14 The judicial power of Montana’s courts encompasses only live controversies. Stuivenga, ¶ 17. An appeal is moot and non-justiciable when “an intervening event or change in circumstances” renders this Court unable “to grant effective relief or to restore the parties to their original position.” Stuivenga, ¶ 17.
¶15 LPH argues that a change in circumstances has mooted Serrania’s appeal. Specifically, in October 2014, a United States Bankruptcy Court discharged the District Court’s judgments against Serranía. Thus, the sanctions and contract judgments no longer may be collected against Serranía. Because this Court cannot grant effective relief to Serranía with respect to appeals on those issues, those appeals are moot.
¶16 By contrast, it appears that the bankruptcy trustee abandoned Serrania’s FDCPA claim against LPH. Serranía possesses that claim and stands to benefit if this Court were to reverse the District Court on it. Serrania’s appeal of the District Court’s summary judgment order on her FDCPA claim is Uve, and we will examine its merits.
¶17 Finally, while Serranía no longer has an interest in the sanctions orders, Wallace does. The general rule is that only a party to a case has standing to appeal an adverse judgment in the case. Marino v. Ortiz, 484 U.S. 301, 304, 108 S. Ct. 586, 587 (1988) (“The rule that only parties to a lawsuit ... may appeal an adverse judgment is well settled.”). Courts recognize an exception to this rule, however, for a party’s attorney who has been sanctioned and seeks to appeal those sanctions. Nisus Corp. v. Perma-Chink Sys., Inc., 497 F.3d 1316, 1319 (Fed. Cir. 2007) (“As an exception to [the] general rule, a nonparty such as an attorney who is held in contempt or otherwise sanctioned by the court in the course of litigation may appeal from the order imposing sanctions... .”); Bartels v. Sports Arena Emps. Local 137, 838 F.2d 101, 104 (3rd Cir. 1988) (“[T]here is no doubt at all but that at some point an attorney subject to sanction may appeal.”). Indeed, in In re Estate of Bayers, 2001 MT 49, 304 Mont. 296, 21 P.3d 3, an attorney representing a party appealed sanctions that were entered against him, and we reviewed that appeal. Bayers, ¶¶ 1-2. Like the attorney in Bayers, Wallace has an interest in overturning the sanctions entered against him. Accordingly, we will review the merits of the sanctions against him.
¶18 2. Whether the District Court correctly awarded LPH summary judgment on the FDCPA claim.
¶19 The FDCPA prohibits a debt collector from collecting a debt through “any false, deceptive, or misleading representation or means,” 15 U.S.C. § 1692e, or through “unfair or unconscionable means,” 15 U.S.C. § 1692f. Further, the FDCPA imposes an affirmative duty on a debt collector to, within five days of initial communication with a consumer, inform the consumer that she has thirty days to contest the debt or else the collector will presume that the debt is valid. 15 U.S.C. § 1692g(a). If the consumer disputes the debt within thirty days, the collector must cease collection efforts and take steps to verify the debt. 15 U.S.C. § 1692g(b).
¶20 The District Court granted summary judgment to LPH on Serrania’s FDCPA claim because it concluded that: (1) LPH fulfilled its duty to inform Serranía that she must dispute her debt within thirty days or else LPH would presume that the debt was valid; (2) Serranía did not dispute the debt; and (3) Serrania’s failure to dispute the debt within the thirty days barred her from asserting FDCPA claims that revolve around the debt’s invalidity.
¶21 In ruling that Serrania’s failure to dispute the debt barred her claims that LPH violated the FDCPA through misrepresenting that debt, the District Court relied heavily on two United States District Court cases. See Palmer v. I.C. Sys., Inc., No. C-04-03237, 2005 U.S. Dist. LEXIS 27946 (N.D. Cal. Nov. 8, 2005); Bleich v. Revenue Maximization Group, 233 F. Supp. 2d 496 (E.D.N.Y. 2002). In both cases, a debt collector communicated an allegedly false debt amount to a debtor, and informed the debtor that she had a right to dispute the debt within thirty days or else it would be presumed valid. The debtor did not take advantage of that right. Palmer, 2005 U.S. Dist. LEXIS 27946 at *11; Bleieh, 233 F. Supp. 2d at 500. In Bleieh, the district court determined that Congress imposed a duty on debt collectors to inform a debtor of her right to dispute a debt within thirty days “to avoid FDCPA litigation based solely on the debt’s validity as communicated by the collection agency to the [debtor].” Bleich, 233 F. Supp. at 500. Similarly, in Palmer, the district court examined the FDCPA’s language and concluded that “where, as here, it is undisputed that the consumer never contacts the collector to contest the debt before the final collection attempt, plaintiff cannot assert a cause of action under the FDCPA solely based upon the debt collector’s attempt to collect an invalid debt.”Paimer, 2005 XJ.S. Dist. LEXIS 27946 at *15.
¶22 Some months after the District Court entered its summary judgment order, two federal circuit courts examined and rejected the theory espoused in Palmer and Bleich. In McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240 (3rd Cir. 2014), cert. denied, 2014 U.S. Lexis 7516 (Nov. 10, 2014), the Third Circuit held, “[A] consumer is not required to seek validation of a debt he or she believes is inaccurately described in a debt communication as a prerequisite to filing suit under § 1692e.” McLaughlin, 756 F.3d at 248. The court noted that the FDCPA’s “text provides no indication that Congress intended to require debtors to dispute their debts under § 1692g before filing suit under § 1692e, and in fact, the statutory language suggests the opposite.” McLaughlin, 756 F.3d at 247. The court further noted that holding that a debtor forfeits her FDCPA claim by failing to quickly dispute a debt undermines the FDCPA’s purpose as a remedial statute, aimed at protecting “unsophisticated debtors, who have no reason to suspect that they would be prevented from filing suit concerning deceptive communications as a consequence of failing to invoke the optional statutory validation procedure.” McLaughlin, 756 F.3d at 247-48. Also, such a holding would “immunize false statements,” undermining the “FDCPA’s goal of ensuring debt collectors act responsibly.” McLaughlin, 756 F.3d at 248. Finally, the court noted that the debt validation procedure still serves a purpose without making it a prerequisite to suit because “it can enable debtors to cheaply and quickly resolve disputes with debt collectors” and “facilitate! ] the exchange of information....” McLaughlin, 756 F.3d at 248. The Fourth Circuit conducted nearly the same analysis in Russell v. Absolute Collection Servs., Inc., 763 F.3d 385 (4th Cir. 2014), before concluding,
In sum, a pre-suit validation requirement is unfounded in the text of the statute, contrary to the remedial nature of the FDCPA, and inconsistent with the FDCPA’s legislative purpose of eradicating abusive collection practices. We therefore hold that a debtor is not required to dispute his or her debt pursuant to § 1692g as a condition to filing suit under § 1692e.
Russell, 763 F.3d at 394.
¶23 Although neither party cited McLaughlin or Russell in their briefs on appeal, we are persuaded by the rulings of the Third and Fourth Circuits. While there is logic behind requiring a party to attempt to resolve a debt dispute outside of court before filing suit, the FDCPA simply does not impose that requirement. And, as the circuit courts observed, such a requirement undermines the FDCPA’s purposes. Therefore, we conclude that the District Court relied on incorrect reasoning in granting summary judgment to LPH on the FDCPA claim.
¶24 Nonetheless, we uphold court orders that reach the correct result. State v. Reim, 2014 MT 108, ¶ 26, 374 Mont. 487, 323 P.3d 880. In this case, one alternative ground that would entitle LPH to summary judgment on the FDCPA claim would be if LPH did not in fact attempt to collect a debt from Serrania through “any false, deceptive, or misleading representation or means,” 15 U.S.C. § 1692e, or through any “unfair or unconscionable means,” 15 U.S.C. § 1692f. Serrania alleges that LPH misrepresented her debt amount. Misrepresentation of a debt violates the FDCPA’s prohibition on attempting to collect “any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.” 15 U.S.C. § 1692R1); see also 15 U.S.C. § 1692e(2)(B) (prohibiting the false representation of “any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.”). The question becomes whether the debt that LPH represented to Serrania was “authorized by agreement... or permitted by law.” 15 U.S.C. § 1692f(l).
¶25 Serrania disputes the validity of four fypes of charges that LPH sought to collect from her: (1) charges for services rendered to Serrania’s husband and son, (2) interest charges, (3) a non-sufficient funds fee for a bad check, and (4) collections costs and attorney fees for collecting Serrania’s debt. Turning to Serrania’s contract with LPH, we have no difficulty concluding that it authorizes LPH’s attempt to recover collection costs and attorney fees. In the contract, Serrania agreed “to pay collection and legal fees if any delinquent balance is placed with an agency or attorney for collection or suit.” The contract, however, does not appear to authorize any of the other charges that Serrania disputes. We thus turn to whether the law permits these charges.
¶26 Serranía disputes the validity of billing her for treatment provided to her child and then-husband. Section 40-2-106, MCA, provides:
A husband or wife, solely on the basis of being a spouse, is not... liable for the debts contracted by the other spouse, except that the expenses for necessities of the family... are chargeable upon the property of both the husband and wife ... [and] the husband and wife may be sued jointly and separately.
Section 40-2-210, MCA, further specifies that necessities include services that are “reasonably required to provide for the health... of the married person, the person’s spouse, and minor children ... .” These provisions make a person liable for the medical expenses of her spouse and child. See Missoula YMCA v. Bard, 1999 MT 177, ¶¶ 13-15, 295 Mont. 260, 983 P.2d 933. Accordingly, these provisions permitted LPH to represent Serrania’s debt as encompassing expenses related to dental services provided to her husband and child.
¶27 Serranía also disputes the validity of adding interest to her debt. Section 31-l-106(l)(b), MCA, however, authorizes interest “on all money at a rate of 10% a year after it becomes due on ... an account stated[.]” Serranía had accounts with DDG, and DDG charged interest on those accounts when they were ninety days past due, in compliance with § 31-1-106, MCA. LPH did not misrepresent Serrania’s debt by including interest in the represented debt amount.
¶28 Finally, Serranía disputes the validity of a non-sufficient funds fee that was added to her debt after she passed a bad check. But this fee is authorized by § 27-l-717(l)(a), MCA, which states, “A person who issues a check... for the payment of money is liable for a service charge ... or for damages... if the check... is... dishonored for lack of funds....” LPH did not misrepresent Serrania’s debt by including this fee in the represented debt amount.
¶29 There is no dispute of material fact about the debt that LPH sought to collect. The fees and charges subsumed within the debt were either authorized by Serrania’s contract or permitted under the law. LPH thus is entitled to judgment on Serrania’s FDCPA claim, albeit on a different ground than that on which District Court relied. We affirm the District Court’s summary judgment order on the FDCPA claim.
¶30 3. Whether the District Court abused its discretion in sanctioning Wallace.
¶31 Wallace challenges a number of sanctions imposed against him. The first sanction derives from Wallace’s failure to attend the February 2013 scheduling conference. The District Court sanctioned Wallace under M. R. Civ. P. 16(f) for his absence. That rule provides that a court “may issue any just orders... if a party or its attorney... fails to appear at a scheduling or other pretrial conference.” M. R. Civ. P. 16(f)(1)(A). Further, “instead of or in addition to any other sanction, the court must order the party, its attorney, or both to pay reasonable expenses — including attorney fees — incurred because of any noncompliance with this rule, unless the noncompliance was substantially justified or other circumstances make an award of expenses unjust.” M. R. Civ. P. 16(f)(2).
¶32 Wallace suggests that sanctioning him for missing the conference was unjust because he missed the conference due to illness. But this excuse does not explain why Wallace could not have provided notice to the court or opposing counsel that he would not be able to attend the conference before it occurred. Wallace also argues that sanctions for missing a scheduling conference are justified only if there is a showing of bad faith or prejudice, citing Watson v. West, 2009 MT 342, ¶¶ 29, 31, 353 Mont. 120, 218 P.3d 1227. To the extent that Watson requires a finding of prejudice, the District Court had the ability to find it — LPH and DDG were forced to prepare for a conference that they otherwise would not have had to if Wallace properly had alerted them that he could not attend. The District Court was in a better position to determine whether Wallace’s unwarned absence from the conference justified imposing sanctions, and the court did not abuse its discretion by makingthat determination. See McKenzie v. Sheeler, 285 Mont. 500, 506, 949 P.2d 1168, 1172 (1997) (“[T]he trial court is in the best position to know whether the parties are disregarding the rights of opposing parties in the course of litigation and which sanctions for such conduct are most appropriate.”).
¶33 The second sanction that Wallace contests derives from Serrania’s refusal to respond to discovery requests asking her to disclose her current employer, her employment position, and the nature of her job duties. These requests are relevant to Serrania’s credit defamation claim and to damages in Serrania’s FDCPA claim. M. R. Civ. P. 37(c)(1)(a) provides that if a party “fails to provide information requested in accordance with these rules,” a court “may order the payment of reasonable expenses, including attorney fees, caused by the failure.” The District Court concluded that Serranía failed to provide information in accordance with M. R. Civ. P. 37 and ordered Serranía to pay expenses that were attributable to that failure. We cannot conclude that this was an abuse of discretion.
¶34 Wallace contests the two remaining sets of sanctions primarily on procedural grounds. In its December 2,2013 order, the District Court granted LPH’s motion for M. R. Civ. P. 11 sanctions, ordering Wallace to show cause why the court “should not sanction the Plaintiff” and
"award the Defendants the fall amount of the balance owed under the contract, and the Defendant’s debt collection fees, and attorney’s fees and costs.” At the show cause hearing, Wallace pointed out that M. R. Civ. P. 11(c)(2) requires that a motion for sanctions "be made separately from any other motion,” and that LPH violated that requirement by moving for sanctions under M. R. Civ. P. 11, § 37-61-421, MCA, and 15 U.S.C. § 1692k, all in the same motion. The District Court responded by restyling its show cause hearing on sanctions as initiated sua sponte rather than on LPH’s motion. After the show cause hearing, the District Court ordered Serranía and Wallace jointly to pay $24,797.24 to DDG and $41,113.32 to LPH as sanctions under M. R. Civ. P. 11(c). The District Court also ordered Wallace individually to pay $10,000 to the Missoula County Clerk of Court’s Office for Ins "blatant lack of candor and his disrespectful conduct toward the Court and the legal process and his egregious abuses of the legal rights of the Defendants.”
¶35 On appeal, Wallace restates his argument about the District Court not complying with the process for imposing M. R. Civ. P. 11 sanctions. These arguments have merit. But M. R. Civ. P. 61 directs, “At every stage of the proceeding, the court must disregard all errors and defects that do not affect any party’s substantial rights.” On appeal, Wallace simply has not explained how the procedural problems with the M. R. Civ. P. 11 sanctions affected his substantial rights. Wallace was on notice that he might receive sanctions for his conduct, and he knew that when he attended the show cause hearing.
¶36 Review of the record also reveals that the District Court did not abuse its discretion by sanctioning Wallace $10,000 for his "blatant lack of candor and his disrespectful conduct toward the Court and the legal process and his egregious abuses of the legal rights of the Defendants.” The District Court found that Wallace was “primarily responsible for causing this case to unreasonably grow beyond the legal issues and damages pled in Plaintiffs Complaint and the Defendant’s respective Answers and Counterclaims, and for ignoring and denying the legal effects of this Court’s ruling in its March 14,2013 [summary judgment order].” The District Court was in the best position to make these findings, and the findings justify the sanction. See McKenzie, 285 Mont, at 506, 949 P.2d at 1172. Wallace has not demonstrated clear error in the court’s findings in this regard.
¶37 On the basis of the current record, however, we cannot affirm the District Court’s order for Serranía and Wallace jointly to pay $24,797.24 to DDG and $41,113.32 to LPH. The District Court based these sanctions in part on the "filing of this frivolous law suit in the first place.” But, given this Court’s implicit conclusion earlier in this opinion that Serrania’s FDCPA claim had some grounding in the law — albeit not enough to withstand summary judgment — this suit does not appear entirely frivolous. We cannot conclude that the District Court appropriately ordered Serranía and Wallace jointly to pay $24,797.24 to DDG and $41,113.32 to LPH based on the stated findings.
CONCLUSION
¶38 We affirm all the appealed orders, with the exception of the District Court’s order that Serranía and Wallace jointly pay $24,797.24 to DDG and $41,113.32 to LPH. That sanctions order is vacated and remanded for reconsideration in light of this opinion.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, WHEAT and RICE concur.
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JUSTICE COTTER
delivered the Opinion of the Court.
¶1 Casey Kent, aged 35, died on June 14,2008, as the result of a head injury he suffered on June 2,2008, after falling while skateboarding in Cedar Pointe Estates in Columbia Falls, Montana. Sara Kent, Casey’s wife, sued the City of Columbia Falls and various other entities involved in designing, developing, and constructing Cedar Pointe Estates. She alleged multiple counts including negligence, premises liability, breach of professional duties, and wrongful death. Sara claims that a portion of the paved path upon which Casey was skating was built with a 24% grade and the steepness of this grade caused Casey’s fall and resultant fatal head injury. Sara ultimately settled with all defendants except the City of Columbia Falls. The Eleventh Judicial District Court for Flathead County granted the City’s motions for summary judgment. Sara appeals. We reverse and remand.
ISSUE
¶2 A restatement of the issue is whether the District Court properly applied the public duty doctrine to grant summary judgment to the City.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Development of a 20-acre plot of land in southeast Columbia Falls began in approximately 2003. Donald Gatzke owned the property and hired John Schwarz with Schwarz Architecture & Engineering (later APEC Engineering) to design the infrastructure, draft and submit official and detailed plans to the City, and construct what became a 79-lot residential PUD development known as Cedar Pointe Estates. A PUD, a/k/a “planned unit development,” is a planned community that allows for varied and compatible land uses. This type of development gives local governments and developers greater flexibility in designing a proposed subdivision than would be allowed with a traditional subdivision. It authorizes a city to approve a project that might not otherwise conform to applicable zoning and subdivision regulations.
¶4 In the design documents submitted to the City for approval, Gatzke and Schwarz proposed features for Cedar Pointe that did not meet City standards. For example, they proposed installing narrow streets without sidewalks. Narrow streets that do not allow emergency vehicles to navigate a neighborhood if cars are parked on the streets do not meet the City’s standards for a residential development but can satisfy the requirements for a PUD if other accommodations are made. As an accommodation for narrow streets and the lack of sidewalks, Gatzke and Schwarz proposed construction of multiple small parking lots and a trail system that included both a bike and a walking path.
¶5 In October 2003, the City Council of Columbia Falls adopted Resolution No. 1316 in which it conditionally approved the preliminaiy plat submitted for Cedar Pointe. Attached to the resolution were 28 conditions imposed by the City. Condition 12 stated: “In lieu of sidewalks throughout the development the applicant shall install a bicycle and pedestrian trail system as shown on Drawing C-3 prepared by Schwarz Engineering and dated 09-18-03 ...” with modifications. The City instructed that the trail system be widened and extended in specified locations. It also required the city manager to “approve of the design and location of the trails prior to the start of construction.”
¶6 In November 2003, the City Council approved Ordinance No. 647, an amendment to the development of the Cedar Pointe PUD. Attached to the ordinance was another set of conditions. Condition 9 provided that a non-motorized trail system (bike path) was to be constructed as part of the subdivision. It described where the bike path was to be located, the width of the bike path, and that the City would maintain all portions of the bike trail as it was located within the City’s right-of-way. Condition 10 instructed that a walking path would be built within the subdivision and would provide direct access to every lot that did not share a property line with either the bike path or a public street. The location and width of the walking path was specified. Again, the City retained the right to “approve of the design and location of the trails prior to the start of construction.”
¶7 In July 2007, the City Council approved Ordinance No. 690which included additional amendments to Cedar Pointe. Attachments to Ordinance No. 690 required that the bike path be re-routed in places and that both the bike and the walking paths be paved. The Subdivision Improvement Agreement (SIA) attached to Ordinance No. 690 stated: “The City, in its sole and exclusive discretion, shall determine when and if all of the required conditions of the PUD, Plat or related documents have been met.” Attached to the SIA was a Final Plat Report requiring the developer to post a security bond of $471,867.75 to cover completion of the proposed work. Also attached was an APEC Inspector’s Daily Record of Work Progress dated March 8, 2007, indicating remaining items to be completed. One such item was “Bike path and walking paths will need to be completed with specified grades and surfacing materials.”
¶8 On July 31, 2007, a contractor on the Cedar Pointe construction project contacted APEC questioning the grade of the bike path and whether it met ADA (Americans with Disabilities Act) standards. APEC responded in writing that the bike path must be ADA-compliant but that the walking path need not be. The letter indicated that APEC had conferred with the city manager who stated the City had no expectation of ADA-compliance for the walking path. The Manager further advised that Gatzke should seek legal advice concerning whether an ADA-non-compliant sidewalk was acceptable from a liability standpoint. APEC opined that “it would be exceedingly challenging to meet ADA grade guidelines for the complete walk path system on the Cedar Pointe properly.”
¶9 Throughout construction of the trail system, City officials made numerous on-site visits and inspections. Additionally, at multiple times during construction the City notified engineers and contractors on the project that failure to comply with the City’s instructions could result in the City’s denial of approval or rejection of the project. On December 21, 2007, the City Director of Public Works indicated that the final inspection of all infrastructure items had been completed and approved, with the exception of a short list of remaining items not pertinent to the trail system, and that the original security bond should be released.
¶10 On June 2, 2008, Casey Kent was skateboarding within the subdivision along the paved walking path. At the bottom of a 24% decline in the path, Casey fell off his board, hit his head, and lost consciousness. He was transported by ambulance and subsequently airlifted to a hospital where he died 12 days later of severe head trauma.
¶11 On June 1, 2011, Sara filed suit against the City of Columbia Falls, Gatzke, Schwarz, APEC, the Cedar Pointe Estates Homeowners’ Association, and various John Does. Among her complaints against all defendants, including the City, were allegations of negligence, willful or wanton misconduct, negligence per se, and wrongful death. She alleged claims of premises liability, nuisance, and attractive nuisance against the City, Gatzke, and the Homeowner’s Association. Lastly, she asserted a claim exclusively against the City for failure to follow its own regulations. Dining the first three years of litigation, Sara settled with all the defendants except the City of Columbia Falls.
¶12 In February 2012, early in the proceedings, the City moved for summary judgment on all counts against it. The City disputed premises liability» claiming that it did not own the property, did not construct the path, and expressly required the homeowner’s association to maintain the walking path. The City also argued that it did not assume any duty by virtue of its supervisory authority over and involvement in designing the walking path’s layout because the public duty doctrine precludes the existence of such a duty. Consequently, the City asserted, without a duty to be breached, Sara’s negligence and premises liability claims could not stand. Both Sara and APEC opposed the City’s motion. APEC filed a brief in opposition arguing that the “special relationship/detrimental reliance” exception to the public duty doctrine applied in this case; therefore, the City may be held liable.
¶13 Sara chose not to address the public duty doctrine in her brief in opposition, asserting that discussion of the doctrine, if necessary, should be reserved for a future date after all potential parties had been identified. Rather, she argued that applying the public duly doctrine was unnecessary because the City created a non-delegable legal duty for itself when it adopted resolutions and ordinances allowing the development and construction of the trail system for Cedar Pointe Estates to replace sidewalks throughout the subdivision, subject to explicit conditions. She claimed that by allowing Cedar Pointe Estates to utilize a trail system in lieu of sidewalks, the City retained the same responsibilities and liabilities for the trail system as it had for other City sidewalks. Sara observed that the general public using the trail system saw no distinction between the bike path and the walking path, nor did the City seek to establish such a distinction.
¶14 Sara also asserted that in addition to the statutory duty, the City voluntarily undertook oversight of the trail system based upon its self-imposed obligation to “approve” the trail system and its active participation in the design and location of the trail system. Relying on Dobrocke v. City of Columbia Falls, 2000 MT 179, ¶ 33, 300 Mont. 348, 8 P.3d 71, overruled in part on other grounds by Roberts v. Nickey, 2002 MT 37, 308 Mont. 335, 43 P.3d 263. Sara claimed the City’s duties required it “to act with reasonable care in the approval of the design and location of the trails ... .” She opined that the existence of these duties rendered application of the public duty doctrine unnecessary and incorrect.
¶15 The District Court conducted a hearing and on November 10, 2012, granted the City’s motion on multiple counts of the complaint, including premises liability. Upon entry of this order, Sara’s only claims against the City that remained extant were those alleging willful or wanton misconduct and wrongful death.
¶16 On December 21, 2012, this Court issued its decision in GatlinJohnson v. City of Miles City, 2012 MT 302, 367 Mont. 414, 291 P.3d 1129, in which we addressed the public duty doctrine as it pertains to public safety in a municipal park. A detailed discussion of GatlinJohnson is provided below.
¶17 In April 2013, Columbia Falls moved for summary judgment on the remaining counts. Sara both opposed the City’s motion and, in light of our decision in Gatlin-Johnson, filed a motion under M. R. Civ. P. 54(b) seeking reconsideration of the District Court’s earlier summary judgment rulings pertaining to her negligence claims and her claim that the City failed to follow its own regulations. On March 21,2014, the District Court granted the City’s motion for summary judgment. It also determined that Gatlin-Johnson was not dispositive and denied Sara’s motion for reconsideration.
¶18 Sara filed a timely appeal.
STANDARD OF REVIEW
¶19 This Court reviews a district court’s decision on a motion for summary judgment de novo, to determine whether it is correct, applying the same considerations as the district court under M. R. Civ. P. 56. Summary judgment is proper when the moving party shows that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. Gatlin-Johnson, ¶ 10 (citations omitted).
¶20 The existence of duty is an issue of law, and this Court reviews a decision on an issue of law to determine whether it is correct. GatlinJohnson, ¶ 11 (citations omitted).
DISCUSSION
¶21 Did the District Court properly apply the public duty doctrine to grant summary judgment to the City ?
¶22 As indicated by this issue statement, Sara’s appeal is narrow. Notably, we are not determining whether the City is liable to Sara nor are we determining whether the District Court’s discussion of the public duty doctrine and its exceptions is correct. Our focus here is whether the District Court should have applied the doctrine at all under the facts of this case and our ruling in Gatlin-Johnson.
Public Duty Doctrine
¶23 “The public duty doctrine provides that a governmental entity cannot be held liable for an individual plaintiffs injury resulting from a governmental officer’s breach of a duty owed to the general public rather than to the individual plaintiff.” Gatlin-Johnson, ¶ 14. Under the doctrine, “where a municipality owes a duty to the general public, that duty is not owed to any particular individual.” Prosser v. Kennedy Enters. Inc., 2008 MT 87, ¶ 18, 342 Mont. 209, 179 P.3d 1178. Such duties to the general public include law enforcement services and fire protection. “[A] law enforcement officer has no duty to protect a particular person absent a special relationship because the officer’s duty to protect and preserve the peace is owed to the public at large and not to individual members of the public.” Gonzales v. City of Bozeman, 2009 MT 277, ¶ 20, 352 Mont. 145, 217 P.3d 487. See also Coty v. Washoe Cty., 839 P.2d 97 (Nev. 1992X“[T]he duty to fight fires ‘runs to all citizens and is to protect the safety and well-being of the public at large.’ Therefore, the duty of fire and police departments ‘is one owed to the public, but not to individuals.’ ”). An exception to the public duty doctrine exists when a “special relationship” arises, “giving rise to [a] special duty that is more particular than the duty owed to the public at large.” Nelson v. Driscoll, 1999 MT 193, ¶ 22, 295 Mont. 363, 983 P.2d 972.
¶24 A special relationship generally can be established in one of the following four circumstances: (1) by a statute intended to protect a specific class of persons of which the plaintiff is a member from a particular type of harm; (2) when a government agent undertakes specific action to protect a person or property; (3) by governmental actions that reasonably induce detrimental reliance by a member of the public; and (4) under certain circumstances, when the agency has actual custody of the plaintiff or of a third person who causes harm to the plaintiff. Nelson, ¶ 22. To establish a “special relationship” under the third exception, a plaintiff must show that: (1) there has been direct contact between the public official and the plaintiff; (2) the official has provided express assurances in response to the plaintiffs specific inquiry; and (3) the plaintiff justifiably relied on the representations of the official. Prosser, ¶ 36.
District Court Arguments
¶25 Sara argued to the District Court that the City had assumed two distinct and specific duties, both of which were firmly grounded in “generally applicable principles of law,” and neither of which were owed to the public at large: (1) the City took upon itself through its ordinances a non-delegable statutory duty to approve the design and construction of the Cedar Pointe Estates’ trail system, which includes both the bike path and the walking path; and (2) the City voluntarily undertook — through its active role in deciding and monitoring the location and layout of the trail system — the duty to “act” with reasonable care in approving the walking path because its participation in the planning and building process went beyond simple approval. Sara asserted that a duty of reasonable care attached to both the statutory and voluntary obligations, and that breach of these duties was sufficient to support her tort claim against the City.
¶26 Before eventually settling with Sara, APEC had argued in opposition to the City’s motion for summary judgment that the City’s substantial participation in the design and completion of all facets of the Cedar Pointe Estates, includingthe walkingpath, created a special relationship with Casey that “reasonably induced” Casey’s reliance, to his detriment, that the walking path was designed and constructed in the same safe manner as the bike path and other sidewalks throughout the City. Thus, it was APEC — and hot Safa — that raised the public duty doctrine in opposition to the City’s motion for summary judgment.
District Court’s Rulings
¶27 The focus of Sara’s appeal is the District Court’s initial application of the public duty doctrine in its November 2012 order (Order I), and its subsequent March 2014 order following publication of GatlinJohnson, in which it refused to reconsider application of the doctrine (Order II).
¶28 In Order I, the court made the following relevant findings:
(1) The City approved construction of a private subdivision containing an interconnected trail system consisting of a bike path and a walking path.
(2) In approving the subdivision, the City mandated that “[t]he City shall approve of the design and location of the trails [in the trail system] prior to the start of construction.
(3) Correspondence between City employees and the developer suggests “that the City’s involvement went beyond mere approval; rather, the City appears to have taken an active role in deciding the location and layout of the trail system.”
The City did not challenge these findings through cross-appeal.
¶29 The District Court noted that several of Sara’s claims sounded in both negligence and premises liability. For example, three of her claims alleged that the City (1) negligently designed, built, and operated the walking path; (2) breached its duty to keep the walking path safe for travel; and (3) failed to warn of a defective or dangerous condition on the walking path. The court concluded that disposition of the case first required a determination of whether the City owed a legal duty to Sara.
¶30 The court determined that the City had no duty under premises liability because the City did not own or maintain the property upon which Casey was injured. Moreover, the court concluded that the cases imposing “adjacent landowner” premises liability did not apply to the City in this case. Sara does not appeal the court’s ruling pertaining to premises liability.
¶31 Turning to Sara’s claims and the City’s public duty doctrine argument, the court observed that Sara had presented no argument on the merits of the City’s public duty doctrine claim. The court, therefore, limited its analysis of the public duty doctrine to APEC’s argument that the “special relationship/detrimental reliance” exception to the doctrine existed in this case. Relying on Prosser, the District Court concluded that the exception to the public duty doctrine did not apply because an element of this exception required direct contact between Casey and a City official and there was no such contact. The court did not address Sara’s claims that the City breached both a statutory and a voluntary duty, independent of the public duty doctrina
¶32 In Order II, the District Court specifically acknowledged Sara’s claim that the City-adopted ordinances created a statutory duty for the City but the court characterized (he argument as an argument that the “statutory” exception of the public duty doctrine applied. Therefore, the court again applied the doctrine and determined that the ordinance was not the type of statute that created a “specific class of [protected] persons.” The District Court stated that the City of Hamilton ordinances in Prosser and the City ordinances in the instant case were both passed to promote general health and welfare and therefore did not create a duty to an individual. Consequently, the court concluded that Sara’s claim of negligence failed.
¶33 Addressing Sara’s claim of a voluntarily-acquired duty and her application of Gatlin-Johnson, the court determined that GatlinJohnson was a distinguishable premises liability case and not applicable to Sara’s claims. The court noted that it had addressed premises liability in Order I and would not revisit it. Choosing to analyze Gatlin-Johnson no further, the court concluded its analysis with the assertion that “the decision in Gatlin held that the public duty doctrine does apply to land use decisions by local government” (Emphasis in original.)
¶34 The District Court misstates the holding in Gatlin-Johnson. In Gatlin-Johnson, we held that summary judgment granted to the City was error because the court did not allow the plaintiff to present her case at trial. However, in preface to our analysis in that case, we acknowledged numerous public duty doctrine cases that have been decided in our Court over the past decade. We included Prosser in this list, acknowledging that we applied the public duty doctrine in Prosser “to land use decisions by a local government body.” However, by deciding Prosser as we did, we did not intend to hold that all future “land use decisions by a local government” would be analyzed exclusively under the public duty doctrine, regardless of the level of participation by the municipality in the design and development of the given project.
Sara's Claims On Appeal
¶35 Sara argues on appeal that the District Court erred in refusing to reconsider application of the public duty doctrine in light of our clarification in Gatlin-Johnson that “The public duty doctrine was not intended to apply in every case to the exclusion of any other duty a public entity may have.... It does not apply where the government’s duty is defined by other generally applicable principles of law.” GatlinJohnson, ¶ 17. Sara maintains that there was no need for the court to invoke the public duty doctrine because the City had both a statutory duty and a duty based upon a voluntary undertaking to protect the public using the trail system in Cedar Pointe, and that breach of these duties was sufficient to support her tort claims. Gatlin-Johnson, ¶ 19. She argues that the District Court erred when it presumptively applied the doctrine and its special exceptions without first assessing whether the City’s statutes and voluntary control were sufficient to support her tort claims.
The City’s Response
¶36 The City responds that the District Court’s Order I correctly analyzed whether the City owed a specific duty to Casey and concluded it did not. The City argues that Sara’s claims of a statutory and voluntary duty are actually assertions that the first and second exceptions of the public duty doctrine apply and therefore the District Court correctly analyzed the case under the public duty doctrine.
Gatlin-Johnson
¶37 In Gatlin-Johnson, an eight-year-old girl was severely iiyured when she fell from a slide in a Miles City-owned playground and hit her head on the ground. The child’s mother sued Miles City alleging that the City was negligent for failing to maintain sufficient “impact-absorbing material” around and beneath the slide. Gatlin-Johnson claimed that both the slide manufacturer and the Consumer Product Safety Commission required that there be 12 inches of impact-absorbing material under the slide. Gatlin-Johnson, ¶ 6. The District Court concluded that the City had a duty to safely maintain the playground area in the park, but that this duty was “owed to the general public at large” and was not a duty owed specifically to GatlinJohnson’s daughter. The court, applying the public duty doctrine, observed: “[w]here a tort claim is made against a public body, such as a municipality, the public duty doctrine bars recovery unless a duty is created by a ‘special relationship.’ ” The district court concluded no special relationship exceptions applied. Gatlin-Johnson, ¶ 7. The district court granted summary judgment to Miles City holding that the City owed no duty to Gatlin-Johnson’s daughter and that absent such a duty the City was not liable.
¶38 On appeal, this Court acknowledged numerous cases in which we recognized the applicability of the public duty doctrine, and discussed the “special relationship” exception that can render the doctrine inapplicable. Gatlin-Johnson, ¶¶ 15-16. We then addressed the district court’s reliance on language contained in previous cases that “it is necessary” for district courts “to consider the public duty doctrine whenever there is a negligence claim against a public entity or person.” Gatlin-Johnson, ¶ 17. Without expressly stating that the subject language was being misinterpreted, we explained:
Consideration of the public duty doctrine does not mean... that it always applies whenever a public entity or person is a defendant in a negligence case. The public duty doctrine was not intended to apply in every case to the exclusion of any other duty a public entity may have. It applies only if the public entity truly has a duty owed only to the public at large, such as a duty to provide law enforcement services or regulate the practice of medicine. It does not apply where the government’s duty is defined by other generally applicable principles of law.
Gatlin-Johnson, ¶ 17. We then discussed multiple cases in which we have applied the duty of care in premises liability cases to governmental defendants without relying upon the public duty doctrine. Gatlin-Johnson, ¶ 18. We observed that it was “clear that in each [summarized] case there was no need to invoke the public duty doctrine because the governmental entity had a specific duty, such as premises liability, that was sufficient to support a tort claim.” We observed that this method of addressing government liability was consistent with the Montana Tort Claims Act, which holds every governmental entity in Montana subject to liability for its torts. We referenced the definition of “claim” in the context of governmental tort liability “as arising from an act or omission ‘under circumstances where the governmental entity, if a private person, would be liable to the claimant for the damages under the laws of the state.’ ” GatlinJohnson, ¶ 19; § 2-9-101(1), MCA.
¶39 We concluded in Gatlin-Johnson that the district court erred in applyingthe public duty doctrine simply because amunicipality was the defendant and the park was open to the public. Gatlin-Johnson, ¶ 20. Consequently, we reversed and remanded the case to the district court for further proceedings. Gatlin-Johnson is not “new” law; rather, it is a reminder that courts should first determine whether a governmental defendant has a specific duty to a plaintiff arising from “generally applicable principles of law” that would support a tort claim. If a private person would be liable to the plaintiff for the acts that were committed by the government, then the governmental entity would similarly be liable. Where such a specific duty and breach exists, the public duly doctrine has no application.
Prosser
¶40 As noted above, the District Court relied on Prosser in its analysis in both Orders I and II. In Prosser, defendant Kennedy purchased a former fast food restaurant and submitted plan documents to the City of Hamilton proposing modification of the property for commercial use as a casino and lounge. Following a hearing, at which two of the plaintiffs attended and raised concerns, the Hamilton City Zoning Board of Adjustment adopted the plan by resolution and subsequently issued a permanent certificate of occupancy. Prosser, ¶¶ 5-6. The casino promptly became a nuisance with noise, fights, drug use, and garbage. Three neighbors living in a residential area adjacent to the casino sued Kennedy and the City alleging that the City owed them a special duty, i.e., had a “special relationship” with them, because ordinances approved for construction and operation of the casino and the ordinances being violated (noise, drugs, etc.,) had been adopted to protect them specifically as neighbors. They alleged the Board of Adjustment violated various ordinances in approving Kennedy’s plan, and that various City officials had failed to abate the nuisance despite plaintiffs’ requests. Prosser, ¶¶ 7-8. The district court, analyzing the case under the public duty doctrine, granted summary judgment to the City and we affirmed. Prosser, ¶ 9.
¶41 The District Court’s reliance in Order I on Prosser is understandable considering Gatlin-Johnson had not yet been issued and the District Court believed it was appropriately applying the public duty doctrine and that an analysis of the “special relationship/detrimental reliance” as argued by APEC, was required. However, the District Court again relied on Prosser in Order II when it declined to reconsider its analysis after Gatlin-Johnson was issued. We conclude this was error.
¶42 While we acknowledge some similarities between the case before us and Prosser, there is a significant distinction between Prosser and the case at bar — that is, no one in Prosser argued that the public duty doctrine did not apply. The plaintiffs in Prosser asserted throughout the proceedings that the special relationship exception applied. The Prosser Court therefore decided the case on the issues that were before if. In the case before us, Sara expressly argued that the City had duties defined under other generally applicable principles of law that rendered application of the public duty doctrine erroneous.
¶43 Additionally, in Prosser, while the city officials processed Kennedy’s paperwork, approved of her remodeling/re-commercializing plan, and later fielded irate phone calls from the plaintiffs, it does not appear that the city was actively involved in the design of the project, which was in essence a remodel of a restaurant. It did not voluntarily undertake oversight of the construction, nor did it actively participate in the design and location of the remodeled building.
¶44 Conversely, in the case before us, the record reflects that the City reviewed numerous plans and drawings for Cedar Pointe over time. It imposed multiple conditions upon the developers, including the requirement that a bicycle and pedestrian trail system be constructed. It obligated the city manager to approve the design, location, and final construction of the trails. In executing these tasks, city officials made numerous site visits and ultimately instructed that the trail system be widened and extended in specified locations. The City conducted inspections of the trail system during and after the construction phase. As the District Court found — and the City does not contest via cross-appeal — “the City’s involvement went beyond mere approval” of the project and in fact “the City appears to have taken an active role in deciding the location and layout of the trail system.” (Opinion, ¶ 28.) Many of the City’s actions were similar to those that would be typically undertaken by the architects, contractors, and engineers. Consequently, this case does not involve a uniquely governmental activity.
¶45 Additionally, the City did not distinguish for the public what was a bike path and what was a walking path. The paths were created by the same contractor and looked identical. Even the police officer who responded to Casey’s accident wrote in his report that Casey was found on the south side of the “bike path.” The record also reflects that numerous City officials walked the path, some on multiple occasions, and knew first-hand of the existence of a dangerous and ADA-non-compliant grade in a public walking path. Nonetheless, it “approved” the walking path without requiring that the path meet Code requirements.
¶46 During the discovery phase of this case, Kent asked the City to identify the standards and regulations the City relied upon while “reviewing, considering, [and] placing conditions upon and giving approval for the design of the path and trail system.” The City responded that it relied upon Title 17 of the City Code and the City’s adopted Standards for Public Works improvements. Columbia Falls Municipal Code 17.14.030 disallows subdivided land with “slopes equal to or greater than twenty-five percent subsidence,” recognizing that building on such a slope could cause environmental degradation or “be detrimental to the health, safety or general welfare of existing or future residents.” Moreover, the Standards for Public Works improvements Section 2.05 (E) required: “Bicycle Paths and/or Walkways: Access-ways for people to use with non-motorized vehicles, primarily for recreational use, the minimum width shall be 9 feet, all slopes and grades shall meet ADA requirements.” It is apparent however that the City did not require the owner, the contractors, or engineers to redesign the City-required public walking path to conform to ADA grade standards.
¶47 In arguing the District Court’s ruling should be affirmed, the Dissent discusses, among other cases, a recent Utah Supreme Court case, Cope v. Utah Valley State College, 342 P.3d 243 (UT 2014). In Cope, a dance student was injured while rehearsing a choreographed dance routine that required her dance partner to lift her to his shoulder as she completed a back flip. Cope, ¶ 4. Although the move proved to be a challenging one, the school did not provide the usual spotters to help protect the dancers as they learned a new lift. In fact, the instructor told the students to use “more power” and tiy again. He told the couple he would drop the lift from the routine if they were unable to perform it. In their third attempt, Cope’s partner lost his footing, and Cope fell and was injured. Cope, ¶ 5. She sued the college which moved for summaiy judgment on the grounds that it owed no duty to protect her. The motion was granted and Cope appealed. Cope, ¶¶ 7-8.
¶48 The Utah Supreme Court conducted an in-depth analysis of whether the dance instructor’s action was an “affirmative action” or an “omission.” The court noted that if Cope’s accident arose from an “affirmative action” taken by the college, the public duty doctrine would not apply to her claim. However, if her claim arose from an omission, the public duty doctrine may present a bar to liability. Cope, ¶ 34. The court concluded that Cope could “trace her harm back to an affirmative act by UVSC”; therefore, the public duty doctrine did not bar her claim. Cope, ¶ 39. The Utah court explained that the college created, funded, and supervised the dance team, and gave students course credit for team participation. The court stated: “UVSC’s actions in creating and overseeing the ballroom dance team had advanced to a stage where it had a duly to act in a reasonable maimer to prevent injuries cause by participation with the dance team.” In other words, “the college "launched a force or instrument of [potential] harm’ ” and assumed a duly to act reasonably. Cope, ¶ 36.
¶49 The Dissent distinguishes this case from Cope, concluding that Sara ""has done nothing to show that the City created the dangerous grade on the walk path.” To the contrary, as was the case in Cope, Sara’s claim is premised upon affirmative actions taken by the City. As the District Court found, the City did not merely approve the walkway; it took an active role in monitoring, determining, and approving the engineering aspects of the trail system. It walked the walkway and gave instruction on the design. Having undertaken this active role, the City assumed a duty to act reasonably. Cope, ¶ 36.
¶50 The City argues it had no duty to Sara. However, it has long been the rule in Montana that should one gratuitously assume to render a service, the entity so doingis “bound to the exercise of reasonable care in the performance of the services so voluntarily assumed.” Vesel v. Jardine Mining Co., 110 Mont. 82, 92, 100 P.2d 75,80 (1939). See also Nelson, ¶ 37 (“[0]ne who assumes to act, even though gratuitously, may thereby become subject to the duty of acting carefully, if he acts at all... . The rule has been applied in several Montana cases where this Court has imposed a duty of reasonable care in the performance of an undertaking”). Thus, as Sara has alleged, the jury could find the violation of a duty voluntarily assumed.
¶51 In Verity v. Danti, 585 A.2d 65 (R.I. 1991), the Rhode Island Supreme Court was asked whether the public duty doctrine applied to a case where a child was seriously injured as a result of a blocked sidewalk. While walking along a sidewalk the child encountered a large tree that blocked her passage. A stone wall abutted the tree on one side and her only way around the tree was to step off the sidewalk and onto a busy highway. In doing so, she was hit by a vehicle and seriously injured. The State claimed it was protected by the public duty doctrine but the Rhode Island Supreme Court disagreed. The court concluded that the State knew of the sidewalk obstruction and consciously decided not to remove the obstacle, thereby forcing pedestrians into peril. In fact, the court noted that the State had evaluated the condition of the sidewalk with the obstacle and concluded that it was “satisfactory.” The Rhode Island court called the State’s decision “egregious” and held “when the state has knowledge that it has created a circumstance that forces an individual into a position of peril and subsequently chooses not to remedy the situation, the public duty doctrine does not shield the state from liability.”
¶52 The same result is compelled here. Evidence sufficient to defeat summary judgment exists that the City was actively involved in the design of the path, knew of its dangerous grade, had the statutory authority to compel a modification, and yet exercised its statutory and contractual authority to approve it. We conclude that the City could be held liable to Sara should Sara establish her claims premised on violation of statutory duty and/or the voluntary assumption of a duty to act with ordinary care. We therefore conclude that the District Court erred in barring Sara’s claims on the basis of the public duty doctrine.
CONCLUSION
¶53 Having concluded that the District Court erred in applying the public duty doctrine to the case at bar, we reverse the District Court’s entry of summary judgment for the City and remand for a trial on the merits.
CHIEF JUSTICE McGRATH, JUSTICES SHEA and WHEAT concur.
Early documents refer to the subdivision as Cedar Park Subdivision. The name was changed after November 2004.
Premises liability may be imposed on a property owner who breaches the duty to use ordinary care in maintaining the premises in a reasonable safe condition and to warn others of hidden or lurking dangers. Richardson v. Corvallis Pub. Sch. Dist. No. 1, 286 Mont. 309, 321, 950 P.2d 748, 755 (1997).
It appears that William Shaw, the city manager, was on site at least five times during the pre-construction and construction phases of the project and that Lorin Lowry, the Director of Public Works, visited the site frequently and delivered site-related information to Shaw.
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JUSTICE COTTER
delivered the Opinion of the Corat.
¶1 The Board of Directors (Board) of the Bridger Creek Subdivision Community Association (Association) appeals an order issued by the Eighteenth Judicial District Court, Gallatin County, granting declaratory judgment and attorney fees and costs in favor of Appellee Bill Beebe (Beebe), the Co-Trustee of the Katherine F. Beebe Revocable Trust. We affirm in part and reverse in part.
¶2 The Board raises two issues on appeal, which we restate as follows:
1. Whether the District Court erred in granting declaratory judgment in favor of Beebe.
2. Whether the District Court erred in awarding attorney fees and costs to Beebe.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 The Association was an unincorporated community association located in Gallatin County when this suit commenced. However, during the course of this litigation, the Association became a Montana nonprofit corporation. The Board is charged with governing the Association in accordance with the Association’s Covenants and Bylaws. Beebe, as co-trustee of his wife’s trust which owns a home in the subdivision, is a member of the Association. The present dispute arises out of the interpretation of the Association’s Covenants and Bylaws.
¶4 On October 16,2012, Beebe filed a petition for declaratory relief. The Board answered and counterclaimed for unpaid homeowner assessments and dues. On February 12, 2013, Beebe filed a motion requesting a declaratory judgment supporting his interpretation of certain provisions in the Covenants and Bylaws that concern the Association’s collection of assessments from its members.
¶5 The pertinent portions of the Covenants addressing assessments are as follows:
ARTICLE VI ASSESSMENTS
SECTION 1. The Declarant for each lot owned by it within Bridger Creek Subdivision hereby covenants, and each Owner of any lot by acceptance of a purchase and sale agreement, deed or lease therefore, whether or not it shall be so expressed in any such deed, lease or any other conveyance, shall be deemed to covenant and agree to pay to the Association Ms proportionate share of maintenance established and collectedform [sic] time to time as hereinafter provided.
SECTION 2. The Owner’s proportionate share of the maintenance and special assessmentsshall be assessed in the following manner:
SECTION 4. The maintenance assessments levied by the Association shall be used exclusively for the purpose of financing the Association functions and duties,!.] Assessments shall include but not be limited to maintenance of fences, trails, linear park, weed controls and other improvements.
SECTION 5. If at any time and from time to time during any fiscal year, the maintenance assessment proves inadequate for any reason, including nonpayment of any Owner’s share thereof, the Board may levy a further assessment in the amount of such actual or estimated inadequacy which shall be assessed to the Owners in the manner set forth in Section 2 of Article VI.
SECTION 6. In addition to the maintenance assessment authorized above, the Association may levy, in any assessment year, a special assessment applicable to that year only for the purpose of defraying, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement upon the Parkland and Linear Trail System, including fixtures and personal properly related thereto, provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who vote in person or by proxy at a meeting duly called for this purpose. For the purpose of this section in [an] [sic] owner will be allowed a number of votes equal to the number of dwelling units assessed to his/her at the time of the proposed election.
(emphasis added).
¶6 Beebe alleged that the Association bypassed the Covenants and Bylaws’ approval procedure when it used maintenance funds for the construction of a trail project along Mclllhatten Road adjacent to the subdivision. Beebe argued that this project constituted a capital improvement that would be subject to a special assessment and not a maintenance assessment, thus requiring compliance with the Covenants and Bylaws’ approval procedure identified in Article VI, Section 6. He alleged that the Association failed to follow the special assessment approval procedure when collecting funds to pay for the trail project.
¶7 On April 1, 2013, the Board filed a cross-motion for summary judgment arguing that the trail project did not require a special assessment and that it had otherwise complied with the Covenants and Bylaws. The Board also requested summary judgment on its counterclaim against Beebe for his failure to timely pay homeowner assessments and dues.
¶8 On November25,2013, the District Court granted Beebe’s motion for declaratory judgment concluding that Beebe’s interpretation of the Covenants was correct as a matter of law, and denied the Board’s cross-motion for summary judgment. The court stated:
In order for the Board to collect and spend funds on capital improvements, each year the Association would like to spend money on improvements, the Association must hold a vote and receive two-thirds approval, as directed in Article VI, Section 6 of the Covenants.
The court agreed with Beebe that the funds must be used within a year of the vote. In addition, the court granted the Board’s motion for summary judgment on its counterclaim for dues and assessments, and awarded the Board reasonable attorney fees and costs associated with that claim, pursuant to the Article VI, Section 8 of the Covenants, which states:
SECTION 8. Each assessment under this Article VI shall be a separate, distinct and personal debt and obligation of the Owner against who it is assessed, and each Owner by acceptance of a purchase and sale agreement, deed or lease, shall be deemed to covenant and agree to pay the same to the Association. If the Owner does not pay such assessment or any installment thereof when due, the Owner shall be deemed in default and the amount of the assessment not paid, together with the amount of any subsequent default, plus interest at 12% per annum and costs, including reasonable attorney’s fees, shall be and become a hen upon the lot of such Owner upon recordation by the Association of a notice of default....
The gwimmt of the award to the Board was to be determined at a later evidentiary hearing.
¶9 On December 20,2013, Beebe filed a motion requesting attorney fees and costs based on the premise that he was the prevailing party in his declaratory relief action. The court granted Beebe’s motion, reasoning that just as the Board was entitled to recover reasonable attorney fees and costs on its counterclaim involving Beebe’s failure to pay his assessments and dues, Beebe had a reciprocal right to recover reasonable attorney fees and costs for the Board’s misapplication of the Covenants, citing § 28-3-704, MCA (Contractual right to attorney fees treated as reciprocal), and Article VI, Section 7 of the Covenants, which states:
SECTION 7. The Board shall also levy an assessment against any Owner, as a direct result of whose acts or failure or refusal to act or otherwise to comply with the Bridger Creek Subdivision Covenants, the Bridger Creek Subdivision Rules or the Committee Rules, for monies expended by the Association in performing its functions under the Bridger Creek Subdivision. Such assessment shall be in the amount so expended and shall be due and payable to the Association when levied. Monies so expended shall include, without limitation, reasonable engineers’t,] architects’, attorneys’ and accountants’ fees incurred by the Association.
¶10 The court dismissed Beebe’s alternative argument that he was entitled to attorney fees and costs under the Uniform Declaratory Judgment Act, § 27-8-313, MCA(UDJA). The amount of Beebe’s award was to be determined at a later evidentiary hearing.
¶11 Subsequently, each party submitted affidavits in support of their respective requests for fees and costs. Beebe requested $8,315.50, and the Board requested $1,986.75. On May 21, 2014, prior to an evidentiary hearing, the parties stipulated to the requested amounts but preserved the right to appeal the opposing party’s entitlement to attorney fees and costs. The District Court entered a final judgment including the award of the stipulated fees and costs to each party, on June 9,2014. The Board appeals.
STANDARDS OF REVIEW
¶12 “Our standard of review pertainingto a district court’s conclusions of law, in rendering a declaratory judgment, is to determine if the court’s interpretation of the law is correct.” Skinner v. Allstate Ins. Co., 2005 MT 323, ¶ 10, 329 Mont. 511, 127 P.3d 359 (quoting City of Great Falls v. Dir. of the Dep’t of Pub. Health & Human Servs., 2002 MT 108, ¶ 10, 309 Mont. 467, 47 P.3d 836).
¶13 This Court reviews for correctness a district court’s decision as to whether legal authority exists to award attorney fees. Horace Mann Ins. Co. v. Hanke, 2013 MT 320, ¶ 12, 372 Mont. 350, 312 P.3d 429. We review for an abuse of discretion a district court’s order to grant or deny attorney fees if legal authority exists for the fees. Horace Mann, ¶ 12.
DISCUSSION
¶14 1: Whether the District Court erred in granting declaratory judgment in favor of Beebe.
¶15 The Board argues that in granting Beebe’s declaratory judgment motion, the District Court interpreted the Covenants and Bylaws too narrowly and neglected to consider the Covenants and Bylaws in conjunction with past Association meeting minutes. The Board also maintains that the District Court misinterpreted the term “maintenance” within the context of the governing documents.
¶ 16 The Board correctly suggests that courts should “read declarations of covenants on their four comers as a whole, and terms are [to be] construed in their ordinary or popular sense,” citing Bordas v. Va. City Ranches Ass’n, 2004 MT 342, ¶ 24, 324 Mont. 263, 102 P.3d 1219. As this Court recognized in Rich v. Ellingson, 2007 MT 346, 340 Mont. 285, 174 P.3d 491, “[o]nly where an ambiguity exists may the court turn to extrinsic evidence of contemporaneous or prior oral agreements to determine the intent of the parties.” Rich, ¶ 15 (citation omitted). The Board concedes that “the specific words or terms of the [covenants] are not ambiguous in isolation,” and it has failed to identify any ambiguity in the Covenants or Bylaws that would compel us to consider extrinsic evidence in interpreting the documents. We therefore analyze the terms of the Covenants and Bylaws in accordance with their plain meaning.
¶17 As the District Court concluded, the project along Mclllhatten Road was for the construction of a new trail. The crux of the parties’ dispute is the proper manner in which the Board can levy funds from its members for the trail project under the Associations’ Covenants and Bylaws. The logical starting point is Article VI titled “ASSESSMENTS.”
¶18 Article VI, Section 2 of the Covenants clearly identifies two types of assessments: maintenance and special assessments. Article Vi’s subsequent provisions bolster this conclusion. Section 4 specifically addresses “maintenance assessments,” which comprise those funds levied by the Association “for the purpose of financing the Association functions and duties.” Article VI, Section 6 provides that in addition to the maintenance assessment, the Board may levy a special assessment for purposes of construction or repair of a capital improvement upon the Trail System. Beebe contends that the trail project in question is unquestionably a capital improvement which can be funded only by a special assessment, which requires the consent of two-thirds of the votes of each of the class members. The Board counters that it properly funded the trail work through maintenance assessments, and that a special assessment with the accompanying vote was not required.
¶19 The Board’s argument that maintenance assessments “can include expenditures for improvements” ignores the framework and specificity of the maintenance provision, which clearly explains that maintenance assessments “shall include but not be limited to maintenance of... other improvements.” (Emphasis added). It does not reference the construction of a capital improvement, whereas Article VI, Section 6 provides that the purpose of a special assessment is to “deffayü, in whole or in part, the cost of any construction, reconstruction, repair or replacement of a capital improvement.”
¶20 The parties do not dispute that the trail project along Mclllhatten Road is a new construction project. As the District Court stated, “[a] new trail is properly classified as a capital improvement;” thus the Board must look to Article VI, Section 6 in order to administer an assessment from the Association’s members.
¶21 We conclude, as did the District Court, that when contemplating the construction of a capital improvement, as here, the Covenants compel the Association to levy a special assessment “provided that any such assessment shall have the assent of two-thirds (2/3) of the votes of each class of members who vote in person or by proxy at a meeting duly called for this purpose.” Thus, the District Court’s interpretation of the Covenants was correct. However, we find that the District Court erroneously concluded that the special assessment funds must be used within a year of the vote. The language of Article VI, Section 6 provides that the Association may levy a special assessment “applicable to that year only,” not that the Association is obligated to spend these funds within a year of the vote. The propriety of this finding, however, does not affect the outcome and the error is therefore harmless. See Renner v. Nemitz, 2001 MT 202, ¶ 28, 306 Mont. 292, 33 P.3d 255 (“When the trial court makes an error, but sufficient facts are otherwise established by independent evidence and substantial justice has been done such that the error is harmless, this Court will not disturb the ruling of the lower court.”) (citations omitted). We affirm the District Court’s decision granting declaratory judgment in favor of Beebe.
¶22 2: Whether the District Court erred in awarding attorney fees and costs to Beebe.
¶23 The Board submits that the District Court improperly relied on § 28-3-704, MCA, in awarding Beebe a “reciprocal right” to attorney fees and costs pursuant to Article VI, Section 7 of the Covenants. Article VI, Sections 7 and 8 are the sole provisions in the Covenants that allow for the recovery of attorney fees. See Opinion, ¶¶ 8-9. These sections provide for recovery of fees when an owner fails to pay his assessment and/or when the Board is required to levy an assessment against an owner who has failed to comply with the Covenants. The Board argues that because the award of fees to Beebe stemmed not from an assessment dispute but rather from the fact that he prevailed in his declaratory action, it was error for the court to apply Article VI, Section 7 in a reciprocal manner. We agree with the Board. Article VI, Section 7 is limited in scope to claims for the recovery of assessments, where the Association has expended money performing its functions and seeks to recoup those funds from Association members. Were this provision applied reciprocally, as § 28-3-704, MCA, contemplates, the member would have a reciprocal entitlement to fees only in the event that he prevailed in a dispute in which the Association sought the recovery of assessments against him.
¶24 Beebe did not argue that the Association improperly levied assessments against him; rather, Beebe initiated the litigation to request a judicial determination that the Covenants require a specified approval process before assessments maybe collected from Association members for a new trail project. The District Court concluded that the project qualified as a capital improvement that required the Board to follow the voting procedures outlined in Article VI, Section 6 of the Covenants. There is no attorney fee provision in the Covenants that provides for an award of attorney fees and costs under these circumstances.
¶25 In Hoff v. Lake Cnty. Abstract & Title Co., 2011 MT 118, 360 Mont. 461, 255 P.3d 137, Hoff prevailed on a default judgment against a lending corporation and subsequently sought attorney fees pursuant to his loan’s trust indenture provision titled “Loan Charges” and the “reciprocal right” to attorney fees identified in § 28-3-704, MCA. Hoff, ¶ 17. This Court upheld the district court’s decision to deny Hoff’s attorney fees request, noting the language of the trust indenture provision which allowed the lender to charge Hoff fees, including attorney fees, “for services performed ‘in connection with [Hoff’s] default.’ ” Hoff, ¶ 37. The Court found that because Hoff’s original complaint alleged only negligence and breach of contract claims, Hoff was not entitled to attorney fees under a trust indenture provision related to a default. Hoff, ¶ 37 (“[tjhe trust indenture provision does not entitle either party to attorney fees under these circumstances”). As in Hoff, Beebe did not raise allegations that relate to the circumstances identified in Article VI, Section 7. We therefore conclude that the District Court erred in granting Beebe a “reciprocal right” to attorney fees and costs by applying § 28-3-704, MCA, to Beebe’s claim.
¶26 Beebe requests that if we deny his recovery of fees under the reciprocal provision, we reverse the District Court’s denial of fees under the UDJA. As noted, the District Court rejected Beebe’s alternative argument requesting attorney fees and costs under the UDJA, § 27-8-313, MCA. “In an action for a declaratoiy judgment, § 27-8-313, MCA, may provide a statutory basis for awarding attorney fees as supplemental relief, if such an award is determined to be necessary and proper.” Mungas v. Great Falls Clinic, LLP, 2009 MT 426, ¶ 43, 354 Mont. 50, 221 P.3d 1230. We have ftúrther stated that “while a district court has the discretion to award attorney fees under § 27-8-313, MCA, such fees are only appropriate if equitable considerations support the award.” Mungas, ¶ 45.
¶27 In considering the threshold question as to whether equitable considerations support an award of attorney fees and costs, we conclude that the facts of this case do not warrant such a result. An award of attorney fees in a declaratory action is a rarity; hi fact, as we noted in Horace Mann, “only once have we upheld an award of attorney’s fees in a declaratory relief action under § 27-8-313, MCA.” Horace Mann, ¶ 35. As we further noted in Horace Mann, ¶ 36, the sole case in which such an award was upheld, Renville v. Farmers Ins. Exch., 2004 MT 366, 324 Mont. 509, 105 P.3d 280, “represents an outlier where equity supported an award of attorney’s fees.”
¶28 This Court has on one occasion overturned the decision of a District Court for its failure to award attorney fees under the UDJA. In City of Helena v. Svee, 2014 MT 311, 377 Mont. 158, 339 P.3d 32, we concluded that because the equitable considerations of the case merited an award of attorney fees, the District Court abused its discretion in denying the defendants this recovery. Svee, ¶ 27. The defendants were attempting a low-cost repair to the roof of their home in response to notice from their insurance company about possible cancellation of coverage. Insisting that the Svees’ attempted repair violated a municipal ordinance, the City of Helena proceeded to name them as defendants in a criminal action for re-roofing their house without a permit, and in addition filed a 6-count civil complaint against them. The Svees responded by seeking a declaratory judgment that the ordinance upon which the City relied was invalid on statutory grounds. Svee, ¶ 4. The District Court agreed with the Svees and entered judgment in their favor, declaring that the City had no legal authority to adopt or enforce the subject ordinance. Svee, ¶ 5.
¶29 We reversed the District Court’s order denying Svees the recovery of attorney fees, concluding that one of the equitable considerations underlying an award of fees under the UDJA is whether the parties are similarly situated. Svee, ¶ 20. We observed that the parties in the case were not similarly situated because the City had significantly greater resources to litigate the civil and criminal cases than did the Svees, and yet the Svees were compelled to undergo three years of litigation and the incurrence of substantial legal fees in order to vindicate their contention that the subject ordinance was invalid. Svee, ¶¶ 21,25.
¶30 Similar extraordinaiy considerations are not present here. Hie circumstances prompting the filing of this litigation do not demand recourse in equity. We therefore cannot conclude that the District Court abused its discretion in refusing to grant attorney fees under the UDJA.
CONCLUSION
¶31 For the foregoing reasons, we affirm the decision of the District Court granting declaratory judgment in favor of Beebe, but reverse the District Court’s award of attorney fees and costs to Beebe.
CHIEF JUSTICE McGRATH, JUSTICES BAKER, SHEA and McKINNON concur.
We refer to the Association’s governing documents collectively as the Covenants and Bylaws, which, according to the record, consist of three parts: Part I-Covenants and Restrictions; Part II-Bylaws; and Part Ill-Design Regulations. For purposes of this Opinion, we examine articles found in Part I and Part II only and refer to those parts individually as either Covenants or Bylaws.
Section 28-3-704, MCA, provides:
Whenever, by virtue of the provisions of any contract or obligation in the nature of a contract made and entered into at any time after July 1,1971, one party to the contract or obligation has an express right to recover attorney fees from any other party to the contract or obligation in the event the party having that right brings an action upon the contract or obligation, then in any action on the contract or obligation all parties to the contract or obligation are considered to have the same right to recover attorney fees and the prevailing party in any action, whether by virtue of the express contractual right or by virtue of this section, is entitled to recover reasonable attorney fees from the losing party or parties.
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JUSTICE RICE
delivered the Opinion of the Court.
¶1 Travis Knapton, father of E.K, a minor child, appeals from the order of the Twelfth Judicial District Court, Hill County, granting summary judgment in favor of Eamberlee Johnson on Knapton’s claims of negligence and strict liability. We affirm.
¶2 We address the following issues on appeal:
¶3 2. Did the District Court err by granting summary judgment in favor of Johnson on the negligence claim?
¶4 2. Did the District Court err by granting summary judgment in favor of Johnson on the strict liability claim?
FACTUAL AND PROCEDURAL BACKGROUND
¶5 Kimberlee Johnson is the owner of a house located in Havre. Travis Knapton and Misty Knapton live in an adjacent home with their minor children. Johnson moved into her house in October of2008 and lived there with her husband and their two dogs. The couple’s dogs were housed in a 10’ x 10’ kennel. There was no fence separating Johnson’s property from the adjoining Knapton property. It is undisputed that Johnson’s dogs did not run at large, and they are not the subject of this appeal.
¶6 In October 2010, Johnson leased the downstairs portion of the residence to Daniel and Cheryl Monk, while continuing to live upstairs. At the time of the lease, Johnson knew the Monks owned several dogs of pit bull ancestry and that the animals would be living with the family. After the Monks moved into the residence, Johnson relocated her dogs to a property owned by her husband outside of the city limits, and the Monks used the kennel for their dogs.
¶7 In March 2011, Johnson moved out of the house and the Monks began leasing the entire residence. Johnson, however, continued to have a presence at the house. She left personal belongings in a downstairs storage room, received mail at the residence, inspected the premises two or three times a month, and occasionally stayed overnight on a foldaway bed.
¶8 The Monks’ dogs began escaping from the kennel. On July 23, 2011, one of the Monks’ dogs, Shy, bit M.K., E.K’s older sister, on Knapton’s property. On August 4,2011, Daniel Monk was charged with four misdemeanor offenses stemming from this incident. On October 13, 2011, Shy again escaped and bit E.K. on the leg in Knapton’s backyard. As a result of charges arising from these two incidents, Daniel Monk pled nolo contendere to six separate criminal charges on February 16,2012.
¶9 On July 19,2012, Travis Knapton brought this action against the Monks and Johnson on behalf of E.K. The Monks failed to answer and a default was entered against them. Johnson moved for summary judgment, and the District Court conducted a hearing on Johnson’s motion. Knapton stipulated that there was no evidence in the record that demonstrated Johnson was aware the Monks’ dogs had previously bitten any other person prior to the attack on E.K. The District Court granted Johnson’s motion for summary judgment, concluding that Knapton’s negligence claim failed because Johnson did not know the Monks’ dogs were vicious. The court also concluded that Knapton’s strict liability claim failed because Shy “was not a purebred pit bull, but a mixed breed” and Knapton had not provided authority demonstrating that mixed breed dogs with pit bull ancestry are inherently dangerous. Knapton appeals.
STANDARD OF REVIEW
¶10 We review a district court’s grant of summary judgment de novo and apply the same criteria under M. R. Civ. P. 56(c) as the district court. Olsen v. Johnston, 2013 MT 25, ¶ 9, 368 Mont. 347, 301 P.3d 791. Summary judgment is appropriate only “when the moving party demonstrates both the absence of any genuine issues of material fact and entitlement to judgment as a matter of law.” Parish v. Morris, 2012 MT 116, ¶ 10, 365 Mont. 171, 278 P.3d 1015. “The party moving for summary judgment bears the initial burden of establishing that no genuine issue of material fact exists.” Tonner v. Cirian, 2012 MT 314, ¶ 8, 367 Mont. 487, 291 P.3d 1182 (citation and internal quotations omitted). Once the moving party has met that burden, the “burden then shifts to the non-moving party to present substantial evidence that raises a genuine issue of material fact.” Olsen, ¶ 9. Whether the moving party is entitled to judgment as a matter of law is a legal conclusion, which we review for correctness. Peterson v. Eichhorn, 2008 MT 250, ¶ 13, 344 Mont. 540, 189 P.3d 615.
DISCUSSION
¶11 1. Did the District Court err hy granting summary judgment in favor of Johnson on the negligence claim?
¶12 Knapton argues that Johnson is liable in negligence for the injuries inflicted by the Monks’ dog on his daughter, E.K, under a theory of premises liability- Knapton reasons that Johnson, as the lessor of the premises, owed a duty of care to E.K. In order to maintain a negligence cause of action, a plaintiff must prove four essential elements: (1) the existence of a duty of care on the part of the defendant, (2) a breach of that duty, (3) a causal connection between the defendant’s breach of care and the plaintiffs injury, and (4) damages resulting from the injury. Fisher v. Swift Transp. Co., 2008 MT 105, ¶ 13, 342 Mont. 335, 181 P.3d 601. Ordinarily, negligence actions involve fact intensive questions and are not susceptible to summary judgment. Hinkle ex rel. Hinkle v. Shepherd Sch. Dist. #37, 2004 MT 175, ¶ 23, 322 Mont. 80, 93 P.3d 1239. However, whether a defendant owes a legal duty to another is a question of law. Fisher, ¶ 17.
¶13 As a general rule, a lessor is under no duty “to anyone to look after the premises or to keep them in repair, and is not responsible, either to persons injured on or off the land for conditions which develop or are created by the tenant after possession has been transferred.” Larson-Murphy v. Steiner, 2000 MT 334, ¶ 103, 303 Mont. 96, 15 P.3d 1205; see also Vennes for Vennes v. Miller, 1998 MT 23, ¶ 12, 287 Mont. 263, 954 P.2d 736 (“[I]n general, a nonresident property owner is not liable for injuries to others inflicted by a dog owned and maintained by the occupant of the properly in question.”). However, we have noted an exception to this general rule, as stated in the Restatement (Second) of Torts § 379A, which we have cited as persuasive authority:
A lessor of land is subject to liability for physical harm to persons outside of the land caused by activities of the lessee or others on the land after the lessor transfers possession if but only if:
(a) the lessor at the time of the lease consented to such activity or knew that it would be carried on, and
(b) the lessor knew or had reason to know that it would unavoidably involve such an unreasonable risk, or that special precautions necessary to safety would not be taken.
Larson-Murphy, ¶ 104 (citing Restatement (Second) of Torts, § 379A (1965) (emphasis added). We also noted in Larson-Murphy a similar rule is stated in the Restatement (Second) of Property, Landlord and Tenant, § 18.4 (1977). See also Easson v. Wagner, 501 N.W.2d 348, 350 (S.D. 1993) (Although generally “a landlord is not liable for the negligent acts of his tenant... exceptions arise in those cases where the condition or use of the premises is so potentially harmful that the courts will not permit the owner to hide behind a lease.”).
¶14 Khapton argues that “Johnson reasonably should have known the dogs were vicious” and that allowing the Monks to harbor vicious dogs “unavoidably involve[d],” in the words of the Restatement, an unreasonable risk. Johnson responds that she cannot be held liable for the dog’s attack upon E.K because she was the not the “keeper” of the Monks’ dogs, citing Criswell v. Brewer, 228 Mont. 143, 741 P.2d 418 (1987), for the proposition that a lessor who is neither the owner nor the keeper of a lessee’s dog cannot be held liable for common law negligence based upon the dog’s conduct, regardless of whether the landlord knew about the dog’s vicious propensities. Johnson essentially argues that the law of injury by animal rather than the law of premises liability controls and Knapton’s failure to clearly articulate liability under the former theory is fatal to his claim.
¶15 Admittedly, in our opinions in Criswell and other cases, we failed to clearly explain that injury by animal and premises liability are separate common law theories of liability. We take this opportunity to clarify that the two theories are distinct, and that the absence of liability under one theory does not necessarily preclude recovery under the other. In applying the law of injury by animal, we have concluded that a plaintiff may recover in a common law negligence action only against a defendant who is the “keeper” of the domestic animal. In contrast, when analyzing premises liability where a domestic animal is involved, we have cited the rule stated in the Restatement (Second) of Torts § 379A, which does not require, as a prerequisite for recovery, that the defendant be the keeper of the domestic animal. Compare Venues for Venues v. Miller, 1998 MT 23, 287 Mont. 263, 954 P.2d 736, with Larson-Murphy v. Steiner, 2000 MT 334, 303 Mont. 96, 15 P.3d 1205.
¶16 Similarly, other state courts have analyzed premises liability and injury by animal as separate legal theories of liability. In Stokes v. Lyddy, 75 Conn. App. 252, 815 A.2d 263 (Conn. App. Ct. 2003), the Connecticut Appellate Court addressed an analogous factual scenario where the plaintiff, while walking along a public sidewalk, was bitten by a pit bull owned by the defendants’ tenant. Stokes, 75 Conn. App. at 254, 815 A.2d at 267. The court “note[d] that in the plaintiffs statement of claims and in her supporting arguments, she merge[d] the common law concerning the standard of care owed to others by an animal’s keeper with the rules that govern a property owner’s duty to keep his premises reasonably safe.” Stokes, 75 Conn. App. at 259, 815 A.2d at 269. The court proceeded to “address [the] issues of premises liability and liability for iiyuries caused by animals separately.” Stokes, 75 Conn. App. at 259, 815 A.2d at 269. In discussing the law of injury by animal, the court focused on the foreseeability of the harm and the attendant public policy concerns in determining whether the common law duty extended to landlords. Stokes, 75 Conn. App. at 265, 815 A.2d at 273. With regard to premises liability» the corat adopted § 379A of the Restatement (Second) of Torts, but ultimately held that the defendants owed no duty to the plaintiff under § 379A, on the facts of the case, because the lessors neither “knew of the lessee’s dangerous activity [nor] had reason to know that the activity would involve an unreasonable risk.” Stokes, 75 Conn. App. at 265, 815 A.2d at 273. See also Colombel v. Milan, 24 Kan. App. 2d 728, 952 P.2d 941 (Kan. Ct. App. 1998) (contrasting the law of injury-by-animal and Kansas law of premises liability in a case involving an attack by tenants’ dog).
¶17 That brings us back to Johnson’s citation of Criswell. There, we held that a ranch owner could not be held liable for injuries inflicted on the plaintiff by the ranch foreman’s dog, reasoning the owner was not liable under either of the two theories. Criswell, 228 Mont. at 145, 741 P.2d at 419-20. The dog had bitten another person approximately two years earlier and the owner was aware of the prior incident. Criswell, 228 Mont. at 144, 741 P.2d at 419. While we declined to hold the owner liable in part because he was not the “keeper” of the dog, that finding was dispositive only with regard to the law of injury by animal. In regard to premises liability, the salient facts were those that demonstrated the ranch owner had taken precautions to address the risk of injury presented by the dog, including providing materials to the foreman to build a fence and dog pen behind the ranch house, requiring that the foreman keep the dog in the pen unless accompanied by the foreman, and posting visible “Beware of Dog” signs on the fence surrounding the house. Criswell, 228 Mont. at 144, 741 P.2d at 419. We determined that, wider the facts, the ranch owner did not know or have reason to know that allowing the foreman to keep the dog would unavoidably involve an unreasonable risk. Criswell, 228 Mont. at 145, 741 P.2d at 420. While this hindsight reading may place a new sheen on the Criswell analysis, it is clear that Criswell did not relieve a lessor of exposure to premises liability merely because the lessor cannot be held hable under the law of injury by animal.
¶18 However, we conclude on the record here that insufficient evidence was presented to defeat summary judgment on the claim of premises liability. We first note that Knapton has misstated the standard with regard to Johnson’s alleged constructive knowledge. Knapton argues that Johnson “should have known” of the dogs’ vicious propensities. However, the Restatement employs the “reason to know” standard, rather than the “should know” standard, which are distinct terms. The commentary to § 12 of the Restatement (Second) of Torts explains:
Both the expression “reason to know” and “should know” are used with respect to existent facts. These two phrases, however, differ in that “reason to know” implies no duty of knowledge on the part of the actor whereas “should know” implies that the actor owes another the duty of ascertaining the fact in question. “Reason to know” means that the actor has knowledge of facts from which a reasonable man of ordinary intelligence or one of the superior intelligence of the actor would either infer the existence of the fact in question or would regard its existence as so highly probable that his conduct would be predicated upon the assumption that the fact did exist. “Should know” indicates that the actor is under a duty to another to use reasonable diligence to ascertain the existence or non-existence of the fact in question and that he would ascertain the existence thereof in the proper performance of that duty.
Restatement (Second) of Torts § 12 cmt. a (1965). Therefore, the dispositive issue is not whether Johnson “should have known,” as part of a duty to ascertain the danger, that the Monks’ dogs were vicious, but whether Johnson had “reason to know” of the dogs’ propensities, i.e., whether Johnson had knowledge of facts from which she could infer that the Monks’ dogs had vicious propensities.
¶19 Drawing all reasonable inferences in favor of Knapton, we conclude that Knapton has failed to present sufficient evidence to meet this standard. There is no direct evidence demonstrating that Johnson knew the Monks’ dogs had vicious propensities. Knapton does not allege the dogs exhibited hostile tendencies in Johnson’s presence or that anyone, including the Knaptons, informed Johnson of the earlier biting incident involving M.K., prior to the incident involving E.K. Misty Knapton testified that Monks’ dogs were loose about once a week, but this information was apparently never conveyed to Johnson and, in any event, the fact that the dogs were running loose does not, without more, establish they were also vicious. Knapton offers that Johnson “likely” knew of the August 4, 2011, misdemeanor charges against Daniel Monk arising from the first biting incident because Johnson and the Monks were friends, but this is mere speculation. Knapton offers that it is “rational to assume” that Johnson reasonably should have known of the “pit bullsf] existence and of their vicious nature and propensity for escaping and causing mayhem” because she frequently visited the residence. However, the only evidence in the record relating to Johnson’s knowledge of the dogs’ temperament is Johnson’s unrefuted deposition testimony that the dogs were loving and affectionate to her and that she would have no problem letting her young children play with them. Knapton’s assertions are speculative and do not constitute substantial evidence to raise a genuine issue of material fact. Therefore, we conclude that the District Court’s order granting summary judgment in favor of Johnson on the negligence claim was correctly entered.
¶20 2. Did the District Court err hy granting summary judgment in favor of Johnson on the strict liability claim?
¶21 Citing to the Restatement (Second) of Torts §§ 519 and 520, as applied in Chambers v. City of Helena, 2002 MT 142, 310 Mont. 241, 49 P.3d 587, Knapton urges this Court to adopt a new rule that would classify a tenant’s harboring of purebred pit bulls as an inherently dangerous activity, and hold landlords strictly liable for injuries arising from this activity. Knapton contends that pit bulls “pose an unreasonable risk of harm to humans and particularly children” and that “[a]ny landlord who knowingly allows a pack of them to live on her property should be held strictly liable for any resultant attack upon a human.” To support his argument, Knapton cites Tracey v. Solesky, 427 Md. 627, 50A.3d 1075 (Md. 2012), which imposed strict liability on landlords who permit tenants to harbor purebred pit bulls, but expressly declined to extend strict liability for pit bull cross-breeds. Tracey, 427 Md. at 667, 50 A.3d at 1098.
¶22 As Knapton argues only that purebred pit bulls are inherently dangerous, he challenges the District Court’s statement that, Shy, the dog that bit E.K, “was not a purebred pit bull, but a mixed breed.” Knapton reasons “the record does not specifically speak to (or offer any proof of) the percentage of pit bull blood that Shy had” and “Johnson has not offered any evidence of the percentage of pit bull blood possessed by Shy or the other dogs.” However, Johnson submitted discovery responses stating the Monks’ dogs were “pit bull terrier mixes,” and the District Court proceeded on that premise in rendering its decision. Once Johnson submitted evidence that the Monks’ dogs were of a mixed breed, the summary judgment burden of proof shifted to Knapton to provide evidence sufficient to raise a genuine issue of material fact that the dogs were purebred pit bulls in order to sustain his argument for imposition of a new legal duty. Knapton failed to meet this burden.
¶23 Further, even assuming for the sake of argument that the Monks’ dogs were purebred bit bulls, we cannot conclude that this record demonstrates that purebred pit bulls are inherently vicious. No expert testimony or other evidence that would support that proposition has been presented and Knapton offers only conclusory statements. Thus, the evidentiary record here does not properly present the legal issue of strict liability for analysis. We conclude the District Court did not err by granting summary judgment in favor of Johnson on the issue of strict liability.
¶24 Affirmed.
CHIEF JUSTICE McGRATH, JUSTICES McKINNON, BAKER and SHEA concur.
The transcript of the hearing was lost and is unavailable on appeal. Neither party alleges they were prejudiced by the loss of the transcript.
In response to our decision in Larson-Murphy v. Steiner, 2000 MT 334, 303 Mont. 96, 15 P.3d 1205, where we held that livestock owners had a duty to keep their animals from wandering onto highways, the Legislature enacted § 27-1-724, MCA. The statute abrogated the specific holding in Larson-Murphy by providing that “a person owning property has no duty to keep livestock from wandering on highways and is not subject to liability for damages to any properly or for injury to a person caused by an accident involving a motor vehicle and livestock unless the owner of the livestock or property was grossly negligent or engaged in intentional misconduct.” Section 27-1-724, MCA. However, the enactment of § 27-1-724, MCA, did not alter the duty of lessors generally. By its plain terms, § 27-1-724, MCA, was limited in application to property owners of “livestock” wandering on “highways.”
Restatement (Second) of Properly, Landlord and Tenant § 18.4, provides:
A landlord is subject to liability f<>r physical harm to persons outside the leased property caused by activities of the tenant or others on the leased property after the landlord transfers possession only if:
(1) the landlord at the time of the lease consented to the activity or knew that it would be carried on; and
(2) the landlord knew or had reason to know that it would unavoidably involve an unreasonable risk, or that special precautions necessary to safety would not be taken.
Section 27-1-715, MCA, entitled Liability of owner of vicious dog, is not applicable to the claim against Johnson as Monks’ landlord. As the District Court noted, “[b]y its plain language, the statute limits liability to the owner of the cantankerous canine.”
Section 12 of the Restatement further defines “reason to know” to “denote the fact that the actor has information from which a person of reasonable intelligence or of the superior intelligence of the actor would infer that the fact in question exists, or that such person would govern his conduct upon the assumption that such fact exists.” Restatement (Second) of Torts § 12.
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Leslee Weber appeals the First Judicial District Court’s March 3, 2014 order granting summary judgment to the State of Montana. The State cross-appeals the District Court’s August 14,2013 order denying summary judgment to the State. Because we resolve the case on the State’s cross-appeal, we do not reach the issues Weber raises on appeal. The question presented in the cross-appeal is whether, in its 2013 order, the District Court erred in rejecting the State’s request for immunity under § 41-3-203(1), MCA. We reverse the District Court’s 2013 denial of summary judgment and affirm the court’s judgment in favor of the State.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 This case arises from marriage dissolution proceedings between Leslee Weber and Kelly Etapa, the birth parents of two minor daughters, F.E. and G.E. In May 2007, Weber and Etapa were legally separated by a Wisconsin court. In June of that year, Weber and the girls left Wisconsin to spend the summer at the family’s cabin in Montana. Etapa trailered the family’s horses to Montana and returned to Wisconsin the following day.
¶3 Before leaving, Weber applied for a job in Wisconsin and was scheduled to return there in August. While she was in Montana, Weber discovered that she was not chosen for the Wisconsin job, and she decided to seek employment in Montana. In July, Weber was hired as a counselor at the Willow Creek School in Broadwater County. She notified Etapa via certified letter that she intended to remain in Montana with F.E. and G.E.
¶4 In September 2007, Weber contacted the Broadwater County Sheriffs Department and said that Etapa had made threats against F.E. and G.E. The Sheriffs Department referred Weber to Brooke Dolan, the Broadwater County Crime Victims Advocate. In October, Etapa filed a motion in the Wisconsin court to enforce that court’s physical placement order governing custody and visitation. The Wisconsin court issued an order requiring Weber to allow Etapa to have visitation with F.E. and G.E. over Christmas. On November 30, Weber called the Centralized Intake, Child and Family Services Division of the State of Montana Department of Public Health and Human Services (Department) and said she feared that, once her divorce was final, Etapa would emotionally and verbally abuse F.E. and G.E. The Centralized Intake specialist instructed Weber to discuss her concerns with her attorney and, as her divorce was not yet final, to address through her parenting plan any fears that Etapa would abuse F.E. and G.E.
¶5 In December 2007, Weber filed for divorce in Broadwater County and obtained a Temporary Order of Protection, barring Etapa from contact or communication with Weber, F.E., or G.E. Around the same time, Weber asked Lisa Schmiesing, a licensed social worker, to evaluate F.E. and G.E. to determine how their upcoming visit with Etapa would afiect them. Schmiesing met with F.E. and G.E. four times between December 2007 and January 2008. On January 24, Schmiesing called Centralized Intake at the Department and reported that she believed Weber was psychologically abusing the girls and might physically harm them. Schmiesing also filed a written Child Protection Report, documenting the same concerns:
I have come to the conclusion that [the girls’] father has NOT abused them and their mother has brainwashed them into believing their father is evil and should be killed... . I am very concerned for the girls’ safety. I believe that their mother is seriously delusional (mentally ill) and if she has any suspicions that I believe the girls should see their dad she will take them and run away so that their father cannot find them.... I believe the girls should be removed from their mother’s custody immediately to prevent further psychological damage. I believe their mother would physically harm (perhaps even kill them) if she believes they will be seeing their dad.
Schmiesing further reported that she contacted Dolan, who shared her concerns.
¶6 The Department assigned Child Protection Specialist Kathryn Lamach to investigate Schmiesing’s report. On January 24,2008, the day the Department received Schmiesing’s report, Lamach interviewed Schmiesing and Dolan. Because the allegations in Schmiesing’s report were so serious, Lamach immediately “staffed” the report by calling a meeting with her supervisor, Don Ferriter, Regional Child Protection Services Administrator Kathy Ostrander, Broadwater County Attorney John Flynn, Dolan, and Schmiesing.
¶7 At the meeting, Schmiesing provided the Department with her case notes and discussed her therapy sessions with F.E. and G.E. During the therapy sessions, Schmiesing had observed that F.E. and G.E. showed troubling behavior, such as referring to their father as “Kelly,” discussing ways of killing him, and dancing around saying they wanted him dead. Schmiesing noted that F.E. and G.E. would relate incidents of alleged abuse by Etapa but were unable to provide details, and that Weber frequently called to tell Schmiesing what to write in her notes. Schmiesing believed Weber was brainwashing the girls into hating their father and wanting to kill him. Schmiesing advised the Department that Weber told her she might “go underground” with the girls to keep them from Etapa. Schmiesing was concerned that Weber might kill the girls to keep them from their father. Dolan corroborated Schmiesing’s observations and advised that she had witnessed a dramatic change in the way the children viewed their father since the previous summer, when Weber first brought F.E. and G.E. to see Dolan. Initially, the girls spoke fondly of their father and missed him but, more recently, the girls told Dolan that Etapa hurt them and that they wanted to kill him. Both Dolan and Schmiesing witnessed Weber talking about the divorce proceedings and making disparaging remarks about Etapa in front of F.E. and G.E.
¶8 County Attorney Flynn filed petitions for Emergency Protective Services, Temporary Investigative Authority, and Temporary Legal Custody for F.E. and G.E. on January 25,2008. Flynn attached to each petition a copy of an affidavit signed by Lamach in support of the petitions. On January 28, the District Court granted the State’s petitions. On January 29, the Department removed F.E. and G.E. from Weber’s custody, placed them into foster care, and notified Weber of the removal. On February 27,2008, the District Court issued an order dismissing the Youth in Need of Care case, stating, “The Court is unable to find that [Weber] is endangering her children, or that they are being abused or neglected for the purposes of this proceeding.” The Department returned F.E. and G.E. to Weber’s care.
¶9 In 2011, Weber sued Schmiesing, the State of Montana, and Broadwater County. Weber’s complaint against the State alleged that the Department negligently failed to adequately investigate Schmiesing’s report before removing F.E. and G.E. from Weber’s care. Weber alleged that, as a result of the State proceedings, she was wrongfully charged with and arrested for criminal contempt in Wisconsin, she was denied custody of and visitation with her children, and she suffered from invasion of privacy, embarrassment and shame, financial loss, and severe and prolonged emotional distress with physical manifestations.
¶10 In October 2012, the State moved for summary judgment, arguing that it was immune from suit under § 41-3-203(1), MCA. On August 14, 2013, the District Court denied the motion. The court based its decision on Weber’s allegation that Lamach’s affidavit misled the prosecutor and judge because, though Lamach swore to her qualifications and training to investigate child abuse and neglect, she offered no evidence that she “conducted some of the steps from her training” in investigating Schmiesing’s allegations. The court concluded, “Whether the State actually qualifies for [statutory] immunity in this case presents a genuine issue of material fact, dependent on the degree to which Lamach conducted her investigation in keeping with her training.”
¶11 The proceedings continued, and the State again moved for summary judgment, this time on the ground that Weber had not provided expert testimony necessary to establish that Lamach was subject to and violated a standard of care. On March 3, 2014, the District Court granted that motion. The court entered judgment in favor of the State on March 21,2014.
STANDARDS OF REVIEW
¶12 We review summary judgment orders de novo. Bailey v. State Farm Mat. Auto. Ins. Co., 2013 MT 119, ¶ 18, 370 Mont. 73, 300 P.3d 1149. Summary judgment is appropriate when the moving party demonstrates an absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Smith v. Burlington N. & Santa Fe Ry. Co., 2008 MT 225, ¶ 10, 344 Mont. 278, 187 P.3d 639. The burden then shifts to the party opposing summary judgment to “present substantial evidence essential to one or more elements of its case to raise a genuine issue of material fact,” or to show why the undisputed facts do not entitle the moving party to judgment. Dollar Plus Stores, Inc. v. R-Mont. Assocs., L.P., 2009 MT 164, ¶ 27, 350 Mont. 476, 209 P.3d 216 (citing Fielder v. Bd. of Cnty. Comm’rs, 2007 MT 118, ¶ 12, 337 Mont. 256, 162 P.3d 67). The interpretation of a statute is a question of law that we review for correctness. City of Missoula v. Iosefo, 2014 MT 209, ¶ 8, 376 Mont. 161, 330 P.3d 1180.
DISCUSSION
¶13 Section 41-3-203(1), MCA (2007), provides in pertinent part:
Anyone investigating or reporting any incident of child abuse or neglect... [or] participating in resulting judicial proceedings... is immune from any liability, civil or criminal, that might otherwise be incurred or imposed unless the person was grossly negligent or acted in bad faith or with malicious purpose or provided information knowing the information to be false.
In its 2013 order denying summary judgment, the District Court noted this Court’s ruling that “where Montana law protects private citizens from liability» it also protects the State.” Gudmundsen v. State ex rel. Mont. State Hosp. Warm Springs, 2009 MT 56, ¶ 24, 349 Mont. 297, 203 P.3d 813 (analyzing whether the State was immune from liability under § 27-1-1103, MCA, which governs liability of mental health professionals). Applying Gudmundsen, the District Court held that immunity under § 41-3-203(1), MCA, extends to the State “to the same extent” that it extends to Lamach. Weber does not appeal that ruling. Weber also has not argued that the State acted in bad faith or with malicious purpose. She contends, rather, that summary judgment properly was denied because there are genuine issues of material fact as to whether the State was grossly negligent or knowingly provided false information.
Gross negligence
¶14 This Court has defined gross negligence as the “failure to use slight care.” Rusk v. Skillman, 162 Mont. 436, 441, 514 P.2d 587, 589 (1973) (quoting Batchoff v. Craney, 119 Mont. 157, 166, 172 P.2d 308, 313 (1946)) (emphasis removed). See also Black’s Law Dictionary (Bryan A. Gamer ed., 10th ed. 2014) (defining “gross negligence” as “[a] lack of even slight diligence or care.”).
¶15 Weber argues that Lamach failed to use slight care because she filed affidavits in support of dependency proceedings just one day after Schmiesing’s report and relied on reports by only two witnesses — Schmiesing and Dolan — when Lamach had no knowledge of either witness’s background, training, or qualifications, and obtained no corroborating information from persons familiar with Weber’s parenting of the children. Weber argues that the State easily could have done more to investigate Schmiesing’s report by contacting Weber; meetingwithF.E. and G.E.; interviewing Weber’s employer, coworkers, or neighbors; investigating the circumstances surrounding the December 2007 protective order Weber obtained against Etapa; or inquiring into the Wisconsin custody proceedings. According to Weber, under § 41-3-301(7), MCA, the State was required to interview her before removing F.E. and G.E. Weber also argues that Ostrander, Ferriter, and County Attorney Flynn failed to exercise slight care when they relied on Schmiesing’s report and Lamach’s affidavit without conducting an independent investigation.
¶16 The State counters that the list of tasks Weber argues Lamach should have completed before filing her affidavit is unsupported by authority or expert testimony. Additionally, the State argues that § 41-3-301(7), MCA, did not require the State to interview Weber or to contact her friends, co-workers, or children. Weber does not dispute that, before filing her affidavits, Lamach interviewed Schmiesing and Dolan, reviewed Schmiesing’s therapy notes, and discussed Schmiesing’s report with her supervisor, co-workers, the Regional Administrator, and the prosecutor. All six professionals who discussed Schmiesing’s report agreed that immediate removal of F.E. and G.E. from Weber’s care was necessary to ensure the girls’ safety.
¶17 Before reaching a decision, the Department discussed Schmiesing’s report with Dolan, who corroborated many of Schmiesing’s concerns. Ferriter testified that he knew Dolan, that Dolan was “professional and hardworking,” and that Dolan had been involved in many of the Department’s cases. Ferriter farther testified that he believed Lamach conducted a thorough investigation because she “[rjeviewed the information from the Centralized Intake,” “staffed” Schmiesing’s report by meeting with her co-workers, supervisors, and the prosecutor, and “got some direction from that staffing.” After the meeting, County Attorney Flynninitiated dependency proceedings and obtained court orders.
¶18 Under § 41-3-301(7), MCA,
If the department determines that a petition for immediate protection and emergency protective services must be filed to protect the safety of the child, the social worker shall interview the parents of the child to whom the petition pertains, if the parents are reasonably available, before the petition may be filed.
The Department determined that Weber was not “reasonably available” because she threatened to flee with her children and, therefore, the Department was wary of alerting her to any investigation.
¶19 The State’s summary judgment evidence established that, having received a serious and urgent report from a licensed social worker of potential harm to two minor children, Lamach acted immediately to interview the social worker, obtained corroborating information from the County’s victim-witness advocate, and gathered her superiors together to determine the best way to proceed. With a credible threat that Weber may flee with the children, the Department decided not to contact individuals close to Weber who may have alerted her that she was being investigated.
¶20 In response to this summary judgment evidence, Weber argued that, had Lamach simply interviewed Weber, her co-workers, or any number of other individuals, it would have become apparent that Schmiesing’s fears were unfounded. But Weber’s burden at that point was “to show, by more than mere denial, speculation, or conclusory statements, that a genuine issue of material fact exists.” LaTray v. City of Havre, 2000 MT 119, ¶ 14, 299 Mont. 449, 999 P.2d 1010. Weber offered no evidence to establish that, in the face of a report that Weber may flee with her children and cause them harm, Lamach’s failure to interview Weber or others who may alert her amounted to the absence of even slight care or diligence in the conduct of her investigation. Section 41-3-301(1), MCA, permits a child protective social worker to remove a child immediately if there is reason to believe that the child “is in immediate or apparent danger of harm[.J” Weber did not demonstrate a triable question of fact that the Department’s decision to ensure the safety of F.E. and G.E. by choosing not to alert Weber of Lamach’s investigation was grossly negligent.
False information
¶21 Weber argues that Lamach knowingly provided false information in several statements in her affidavit. First, Weber argues that Lamach, in signing her affidavit, vouched for the truth of the information in it. Weber also argues that Lamach knowingly provided false information by stating that she conducted a “thorough investigation” into Schmiesing’s report. According to Weber, Lamach should have completed several tasks for her investigation to be considered “thorough.”
¶22 Lamach’s statement that her investigation was “thorough” is an opinion, not information. In any event, Weber does not dispute that Lamach interviewed Schmiesing and Dolan and discussed Schmiesing’s report with co-workers, supervisors, and County Attorney Flynn. Weber acknowledges that “the numerous avenues of inquiry” she alleges Lamach failed to pursue were “suggested” in relevant statutes and the Department’s Policy Manual, implicitly conceding that the Department retains discretion under the law in the conduct of its investigation. See § 41-3-202(1), MCA (requiring the Department to “promptly assess” a report of child abuse or neglect, and directing a "thorough investigation” of all “nonfinandal matters that in the discretion of the investigator are relevant to the investigation” (emphasis added)). Weber did not provide evidence to rebut testimony by the State’s witnesses that Lamach conducted a thorough investigation. In her affidavit, Lamach merely vouched for the correctness of her transmittal to the court of information from two witnesses: Schmiesing and Dolan. As the State notes, both Schmiesing and Dolan testified that Lamach’s affidavit accurately conveyed the information they provided to the Department.
¶23 Weber also contends that Lamach knowingly provided false information because her affidavit falsely states that “per Department policy Section 302-1 [of the Department’s Policy Manual], Social Worker did inform parents that they may have a support person present during any in-person meeting with the Social Worker concerning emergency protective services.” The State does not dispute that Lamach’s affidavit contains this statement. Nor does the State dispute that Weber was never informed of the emergency protective services before the Department removed F.E. and G.E. from her care. However, the State points out that Lamach’s statement is “boilerplate language” drawn from § 41-3-427(l)(d), MCA, which states that a petition for immediate protection and emergency protective services “must include a notice advising the parents... that the parents... may have a support person present during any in-person meeting with a social worker concerning emergency protective services.” The statute does not require that the parents be informed of this right before the State files the petition. According to the State, Lamach merely forgot to strike the standard clause from her affidavit. But Lamach did make clear in her affidavit that immediate removal of F.E. and G.E. from Weber’s care was necessary due to the Department’s concerns about their safety and the risk that Weber would abscond with them.
¶24 Finally, Weber argues that Lamach’s affidavit falsely stated that “the Department does not have any previous reports on this family.” Weber contends that this statement is false in light of her December 2007 phone call to the Department’s Centralized Intake when Weber reported her concern that, once her divorce was final, Etapa would subject F.E. and G.E. to emotional and verbal abuse. As the State points out, the operator designated Weber’s call to the Department as “informational,” meaning it did not merit investigation. The incident report reflects that, though Weber was concerned about a future threat to her children, she “had no current information or situations of abuse to disclose.” The Centralized Intake Specialist instructed Weber to discuss her concerns with her attorney and to address her fear of potential abuse in her parenting plan. In her deposition, Lamach testified that her statement that there were no prior reports “means that there were no reports involving investigations for the family.” Weber does not dispute that her call to Centralized Intake did not result in an investigation.
¶25 Weber’s arguments demonstrate one incorrect statement of fact in Lamach’s affidavit. But, standing alone, the existence of that incorrect statement does not establish a genuine issue for trial as to whether Lamach knowingly provided false information in an attempt to remove Weber’s children from her.
CONCLUSION
¶26 Upon de novo review of the summary judgment record, we conclude that Weber failed to establish a genuine issue of material fact to support her claim that the State employees involved in the investigation were grossly negligent or knowingly provided false information. The State is entitled as a matter of law to immunity from Weber’s claims under § 41-3-203(1), MCA. Because that issue resolves the case, we do not consider whether the District Court erred by concluding that Weber was required to present expert testimony to establish tibe State’s standard of care for investigating a report of child abuse. We reverse the District Court’s August 14, 2013 decision and order, and aflirm its March 21,2014 judgment in favor of the State.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, McKINNON and WHEAT concur.
The District Court granted summary judgment to Broadwater County in July 2012. Weber does not appeal this order. Weber later stipulated to dismissal with prejudice of her claims against Schmiesing.
Unless otherwise indicated, all statutory references are to the 2007 version of the Montana Code Annotated.
|
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Jessica Gazelka sued St. Peter’s Hospital in the First Judicial District Court, Lewis and Clark County, alleging that the Hospital discriminated against her based on her lack of health insurance. We address the following issues on appeal:
1. Whether the District Court erred in determining that Gazelka has standing.
2. Whether the District Court erred in awarding the Hospital summary judgment on the merits.
¶2 We affirm the District Court’s determination that Gazelka has standing, and vacate and remand the District Court’s order granting summary judgment.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In early 2010, Gazelka had no health insurance when she was involved in a motor vehicle accident in Helena. She received treatment from the Hospital. The driver of the vehicle that struck Gazelka had a Safeco vehicle insurance policy with a $100,000 general liability limit. In accordance with Ridley v. Guar. Nat’l Ins. Co., 286 Mont. 325, 951 P.2d 987 (1997), Safeco paid the Hospital for some of Gazelka’s medical bills. When Safeco settled for the $100,000 liability limit, the Ridley payments were deducted from the settlement funds that Gazelka received.
¶4 In early 2011, Gazelka again was uninsured and received treatment from the Hospital. She did not pay for the treatment. The Hospital referred Gazelka’s account to a debt collector, which sued Gazelka and received a judgment against her.
¶5 In September 2011, Gazelka filed suit against the Hospital, alleging that the Hospital violated Montana anti-trust laws and Article II, Section 4 of the Montana Constitution by discriminating against her on the basis of her uninsured status. Gazelka’s complaint centers on preferred provider agreements (PPAs). PPAs are agreements between insurers and healthcare providers regarding the amount and the manner of payment that providers will accept as satisfaction for treatment rendered to insured persons. The undisputed evidence shows that the Hospital has PPAs with several insurers. Thus, Gazelka alleges that while the initial amount the Hospital charges to a patient remains the same regardless of the patient’s insurance status, the actual amount the Hospital will accept as full compensation for its services depends on whether the patient has insurance and which company provides that insurance. The Montana Preferred Provider Agreements Act (MPPAA) authorizes PPAs. Sections 33-22-1701 through 1707, MCA.
¶6 Gazelka argues that the MPPAA is unconstitutional. Without valid statutory authorization, she argues that the Hospital’s billing practices violate state anti-trust laws. Moreover, she argues that the Hospital’s billing practices are themselves unconstitutional. She seeks to certify a class action on behalf of persons who have been discriminated against on the basis of their insurance status.
¶7 In November 2011, the Hospital moved to dismiss Gazelka’s complaint. Among other things, the Hospital argued that Article II, Section 4 is not self-executing and does not provide a cause of action against a private party; that Gazelka failed to follow the Montana Human Rights Act’s mandatory administrative process for resolving discrimination disputes; and that Gazelka’s allegations did not state a claim for unconstitutional conduct. The District Court denied the motion.
¶8 After that ruling, the parties and the District Court apparently decided to litigate standing and constitutional claims before turning to class certification. In January 2013, Gazelka moved for partial summary judgment, arguing that she was entitled to judgment that (1) the Hospital’s billing practices are unconstitutional, and (2) the MPPAA is unconstitutional. The Hospital responded by arguing that Gazelka’s motion was premature. It sought to continue discovery under M. R. Civ. P. 56(f), and, in the alternative, moved for summary judgment on the ground that Gazelka lacks standing.
¶9 In May 2014, the District Court ruled on the summary judgment motions. The court concluded that Gazelka has standing. But, after determining that uninsured persons are not a protected class under the Montana Constitution, the court awarded summary judgment to the Hospital on the merits and dismissed the suit. The parties filed cross-appeals. Gazelka attacks the entry of summary judgment on the merits, while the Hospital appeals the standing determination.
STANDARDS OF REVIEW
¶10 Standing is a threshold question that this Court determines as a matter of law and reviews de novo. Chipman v. Nw. Healthcare Corp., 2012 MT 242, ¶¶ 16, 19, 366 Mont. 450, 288 P.3d 193. We also review summary judgment orders de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment asa matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15.
DISCUSSION
¶11 2. Whether the District Court erred in determining that Gazelka has standing.
¶12 Standing doctrine addresses whether a litigant is entitled to have a court resolve a dispute in light of the adverseness of the parties, their stakes in the matter, the dispute’s concreteness, and the judiciary’s function. See Chipman, ¶ 25. In Montana, a plaintiff has standing if she suffers an actual or threatened injury that is redressable through her action’s success. Chipman, ¶ 26.
¶13 The District Court concluded that Gazelka has standing on the basis of a financial injury arising from treatment at the Hospital in early 2011. The Hospital charged Gazelka a non-discounted amount for that treatment and, after Gazelka failed to pay, referred Gazelka to collections for that amount. On appeal, the Hospital argues that Gazelka’s failure to pay the non-discounted amount was “a clear attempt to manufacture standing” and thus not a real financial injury. Further, the Hospital argues that non-discounted amounts that Gazelka was charged in 2010 did not cause her a financial injury because those amounts were paid by Safeco, the insurer of the driver whose vehicle collided with Gazelka’s.
¶14 We do not address these financial injury arguments. Under the claims that Gazelka alleges, she need not show a financial injury to have standing. In Ne. Fla. Chapter of Associated Gen. Contractors of Am. v. City of Jacksonville, 508 U.S. 656, 113 S. Ct. 2297 (1993) (Contractors), the United States Supreme Court discussed standing in the context of the United States Constitution’s equal protection clause:
When the government erects a barrier that makes it more difficult for members of one group to obtain a benefit than it is for members of another group, a member of the former group seeking to challenge the barrier need not allege that he would have obtained the benefit but for the barrier in order to establish standing. The injury in fact in an equal protection case of this variety is the denial of equal treatment resulting from the imposition of the barrier, not the ultimate inability to obtain the benefit.
Contractors, 508 U.S. at 666, 113 S. Ct. at 2303 (internal quotation marks omitted).
¶15 Gazelka alleges discrimination claims under the Montana Constitution’s equal protection and equal treatment provisions. These provisions state,
No person shall be denied the equal protection of the laws. Neither the state nor any person, firm, corporation, or institution shall discriminate against any person in the exercise of his civil or political rights on account of race, color, sex, culture, social origin or condition, or political or religious ideas.
Mont. Const, art. II, § 4. We often look to the federal courts for guidance in applying Montana’s standing requirements, see Heffeman v. Missoula City Council, 2011 MT 91, ¶¶ 32-33, 360 Mont. 207, 255 P.3d 80; Olson v. Dept. of Revenue, 223 Mont. 464, 469-71, 726 P.2d 1162, 1166-67; and equal protection guarantee, see Powder River Cnty. v. State, 2002 MT 259, ¶ 79, 312 Mont. 198, 60 P.3d 357; Stratemeyer v. Lincoln Cnty., 259 Mont. 147, 152, 855 P.2d 506, 509 (1993). In the context of claims brought to redress an alleged violation of Montana’s equal protection provisions, the iiyury in fact that Gazelka needs to show is the “denial of equal treatment resulting from the imposition of [a] barrier.” Contractors, 508 U.S. at 666, 113 S. Ct. at 2303. See also Schoof v. Nesbit, 2014 MT 6, ¶¶ 19-23, 373 Mont. 226, 316 P.3d 831 (concluding that the plain language of Article II, Sections 8 and 9 of the Montana Constitution confers a personal stake sufficient to establish standing for a plaintiff seeking to vindicate the rights guaranteed by those sections).
¶16 Gazelka attacks the Hospital’s practices and the MPPAA — which arguably authorizes those practices — as barriers to her equal treatment. Gazelka submitted evidence that the Hospital accepts a lesser charge as satisfaction for services as a matter of course from patients with PPA insurers, but not from patients without insurance or without PPA insurers. This alleged unequal treatment and unequal opportunity to obtain a benefit is an injury for standing purposes.
¶17 The Hospital argues that a court cannot redress Gazelka’s injury because Gazelka has no right to benefit from PPAs to which she is not a party. See Kurtzenacker v. Davis Surveying, Inc., 2012 MT 105, ¶ 20, 365 Mont. 71, 278 P.3d 1002 (“A stranger to a contract lacks standing to sue for breach of that contract unless he is an intended third-party beneficiary of the contract.”). But Gazelka does not allege breach of contract; she alleges discrimination. She seeks a declaratory judgment that the MPPAA is unconstitutional, a declaratory judgment that the Hospital’s practices are unlawful, and an injunction prohibiting further unequal treatment. These orders, if awarded, would likely “significantly affect,” Nat’l Parks Conservation Ass’n v. Manson, 414 F.3d 1, 7 (D.C. Cir. 2005), the injury of unequal treatment and unequal opportunity that Gazelka alleges. The controversy before the Court is a controversy in which “the judgment of [a] court may effectively operate” and have the “effect of a final judgment in law or decree in equity upon the right, status or legal relationships of one or more of the real parties in interest.” Skinner v. Allstate Ins. Co., 2005 MT 323, ¶ 15, 329 Mont. 511, 127 P.3d 359 (citations omitted). Gazelka’s injury is redressable with or without awarding her PPA benefits.
¶18 Although on different grounds, we affirm the District Court’s standing determination.
¶19 2. Whether the District Court erred in awarding the Hospital summary judgment on the merits.
¶20 Gazelka’s suit against the Hospital alleges different claims that require explanation before examining the District Court’s determination on the merits. Gazelka argues that the Hospital’s billing practices and the MPPAA both violate Article II, Section 4 of the Montana Constitution. As recounted above, Article II, Section 4, states:
No person shall be denied the equal protection of the laws. Neither the state nor any person, firm, corporation, or institution shall discriminate against any person in the exercise of his civil or political rights on account of race, color, sex, culture, social origin or condition, or political or religious ideas.
Gazelka alleges that the Hospital is a corporation that discriminated against her in the exercise of a civil right on the basis of a social condition. She further alleges that the MPPAA discriminates against her on the basis of a social condition, thus triggering strict scrutiny, which she argues the MPPAA cannot withstand. In the alternative, she alleges that the MPPAA deprives her of equal protection of the laws even if not on the basis of a social condition, thus triggering rational-basis review, which she argues the MPPAA cannot withstand. Finally, Gazelka alleges that the Hospital’s billing practices unlawfully restrain trade in violation of § 30-14-205, MCA.
¶21 The District Court entered judgment in favor of the Hospital after determining that Gazelka’s uninsured status is not a social condition under Article II, Section 4. The court, however, did not address Gazelka’s remaining arguments, which the Hospital had not yet briefed. The District Court’s social condition ruling disposes of Gazelka’s claim that the Hospital and the MPPAA violated Article Ü, Section 4’s prohibition on discriminating “on account of race, color, sex, culture, social origin or condition, or political or religious ideas.” But that determination does not necessitate the conclusion that the MPPAA does not deprive Gazelka of equal protection of the laws. When a statute treats similarly situated individuals dissimilarly, but not on the basis of a suspect classification or in the exercise of a fundamental right, a court must subject the discriminating statute to rational-basis review. McDermott v. Mont. Dep’t of Corr., 2001 MT 134, ¶¶ 31-32, 305 Mont. 462, 29 P.3d 992. The District Court did not determine whether Gazelka was treated differently from similarly situated individuals, and it did not determine whether the MPPAA satisfies rational-basis review. Also, the District Court did not determine whether the Hospital’s conduct violates § 30-14-205, MCA. The determinations that the District Court did make in its summary judgment order did not resolve all of Gazelka’s claims. Accordingly, the District Court erred by entering judgment.
¶22 This Court retains authority to remand cases that require further proceedings. See Bates v. Neva, 2013 MT 246, ¶ 20, 371 Mont. 466, 308 P.3d 114. We exercise that authority now. We express no view on the merits of Gazelka’s claims, and decline at this juncture to resolve the propriety of the District Court’s social condition ruling.
CONCLUSION
¶23 We affirm the District Court’s standing determination, but reverse its entry of summary judgment on the merits. We remand for further proceedings on Gazelka’s remaining claims.
JUSTICES SHEA, COTTER and RICE concur.
In this opinion, we will assume without deciding that Article II, Section 4 provides a right of action against private actors in addition to the right provided by the Montana Human Rights Act, and that that right may be exercised without following the Montana Human Rights Act’s administrative process. Neither party has appealed these issues.
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JUSTICE WHEAT
delivered the Opinion of the Court.
¶1 Jan Gregson and James Gleason, as co-personal representatives of the Estate of Judith Gleason (the Estate), appeal from various rulings by the First Judicial District, Lewis and Clark County. Defendant Central United Life Insurance, Co. (CULI) cross-appeals. We affirm in part, reverse in part, and remand for a new trial consistent with this opinion.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 In 1990, Judith Gleason (Judith) purchased a cancer benefit insurance policy from Colonial Life & Accident Insurance Company, with an effective date of coverage of February22,1990. In March 2002, Judith was diagnosed with breast cancer. She underwent treatment until she died on March 28,2010.
¶3 From the time she purchased the policy until her death, Judith paid all premiums owed. The policy remained in effect when she died in 2010. Judith never submitted a claim on the policy while she lived. After her death, Jan Gregson and James Gleason were named co-personal representatives of her estate (PRs).
¶4 In 2004, CULI acquired the cancer insurance policy from Colonial Life. CULI began servicing the policy in January 2002, and formally assumed the policy on or about October 1,2004.
¶5 On or about April 5,2010, the PRs submitted a notice of potential claim under the policy to CULI via phone call. The PRs then sent CULI a copy of Judith’s death certificate, which attributed her death to cancer. CULI received the death certificate on April 12,2010. Medical bills and claim forms were sent to CULI in January 2011. On January 24,2011, CULI requested additional documentation related to certain services provided from October2009 through March 2010. On January 25, 2011, CULI issued an explanation of benefits stating that claims not submitted within the policy’s notice period were not payable. The policy required claims to be filed within one year plus 90 days of the date of the claim. The PRs provided additional medical records to CULI in February 2011 and early March 2011.
¶6 On March 17,2011, CULI paid certain claims arising within one year and 90 days prior to January 11,2013, the date the claim forms and medical bills were received by CULL This payment totaled $57,735.95. CULI reiterated that it would not pay for claims submitted outside the policy time limit.
¶7 On April 11, 2011, the PRs advised CULI that the Estate was contesting the denial of the untimely-filed claims. On June 24, 2011, CULI issued payment of a $5,000 death benefit payable under the policy.
¶8 On June 24, 2011, CULI filed a declaratory judgment action in Montana Federal Court. The Estate filed this action in State District Court on July 13, 2011. On December 15, 2011, the Federal Court declined to exercise jurisdiction and the declaratory judgment action was remanded to the State District Court for determination.
¶9 Over the next several months, both parties moved for summary judgment. On July 12, 2012, the District Court issued an order granting the Estate’s motion for partial summary judgment and denying CULI’s motion for summary judgment. In its order, the court ruled that CULI owed payment for the untimely-filed claims, provided it was not prejudiced by the late notice. CULI admitted that it was not prejudiced because if had the information necessary to consider the claims under the policy. The court also ruled that the eight-year statute of limitations on written contracts barred claims for services rendered prior to April 5,2002. This ruling was later amended to bar claims for services rendered prior to April 12,2002.
¶10 In August 2012, CULI discovered that certain other medical expenses incurred within the policy time limit should have been covered. Accordingly, on August 20 and 22, 2012, CULI issued payments to the Estate for those claims. These payments totaled $17,195.28 and included prejudgment interest (calculated at 10% per annum) from March 17,2011 to the date of the payments.
¶11 On January 17, 2013, pursuant to the District Court’s July 12, 2012 order, CULI issued payment to the Estate for the untimely-filed claims. The payment totaled $539,717.90 and included prejudgment interest from March 17, 2011 to the date of the payment. Shortly thereafter, CULI warned the PRs not to distribute the funds because it intended to seek reimbursement of the payment on appeal. The PRs placed the funds in trust pending the outcome of this dispute.
¶12 Prior to trial both parties filed motions in limine. On March 1, 2013, the District Court issued an order on the motions. The court allowed CULI to present testimony about cases decided after its denial of the PRs’ claim in order to “illustrate the unsettled nature of Montana law” with regard to the notice issue. The coral: also allowed the PRs to present testimony regarding CULI’s claim handling in other states and how other insurance companies handle late notice claims in other jurisdictions.
¶13 The case was tried by jury from March 4-8, 2013. On March 4, 2013, prior to the commencement of trial, the court entered a directed verdict in favor of the Estate on the untimely-filed claims for the amount of $539,717.90. The court advised the jury that it had directed a verdict on that issue and that CULI had paid that amount to the Estate.
¶14 At the conclusion of trial the court submitted a special verdict form to the jury. The verdict form directed the jury to determine the amount of additional money CULI owed under the policy, if any, and whether CULI had violated the Montana Unfair Trade Practices Act (UTPA). If the jury found that CULI had violated the UTPA, it was to determine the amount of damages suffered and, if it awarded damages, to consider whether CULI had acted with malice. If the jury found CULI acted with malice it could then determine whether to award punitive damages.
¶15 The jury returned a verdict finding that no additional money was due under the policy. The jury found that CULI had violated the UTPA, but did not award damages. The jury therefore did not consider whether CULI acted with malice.
¶16 Following trial, the District Court awarded trial costs to CULI, finding that it was the prevailing party because the jury had awarded no contract or UTPA damages to the Estate. The District Court awarded attorney’s fees and costs to the Estate for its recovery under the policy.
¶17 The Estate timely appealed and CULI timely cross-appealed. The Estate contends that the District Court erred when it: (a) required proof of UTPA damages in addition to wrongfully denied benefits before allowing the jury to consider malice and punitive damages, (b) failed to grant a directed verdict that CULI violated the UTPA, (c) allowed the jury to consider judicial opinions related to the notice-prejudice rule with regard to whether CULI had a reasonable basis in law to deny the claims, and (d) awarded trial costs to CULI.
¶18 On cross-appeal, CULI maintains the District Court erred when it: (a) applied the notice-prejudice rule and determined that the Estate’s claims were not barred by the polios notice provision, (b) applied the statute of limitations from the time CULI received notice of the Estate’s claims, (c) failed to dismiss the UTPA claim because CULI had a reasonable basis in law to deny the claim, (d) allowed evidence of claim handling practices by other insurers with regard to whether CULI had a reasonable basis in law to deny the UTPA claim, and (e) awarded attorney’s fees and costs to the Estate.
¶19 Because of our holding here, we do not reach several of the issues raised by the parties. We therefore restate the issues on appeal and cross-appeal and address them in the following order:
1. Did the District Court err when it applied the notice-prejudice rule in finding that CULI was liable to the Estate for the untimely - filed claims?
2. Did the District Court err when it instructed the jury that it must first find UTPA damages beyond damages for failure to pay benefits under the policy before considering malice and punitive damages?
3. Did the District Court err by failing to direct a verdict against CULI for violating the UTPA?
4. Did the District Court err when it did not dismiss the UTPA claim because CULI had a reasonable basis in law for denying the untimely filed claims?
5. Did the District Court err by applying the statute of limitations from the date the PRs submitted their claim to CULI rather than from the date suit was filed?
6. Did the District Court err in allowing the Estate to present evidence of out-of-state law and claim handlingpractices that were not directly related to the case at hand and allowing CULI to present evidence of Montana cases related to the notice-prejudice rule?
7. Did the District Court err in awarding trial costs to CULI where the jury found that the UTPA was violated and the court entered a directed verdict in favor of the Estate?
8. Did the District Court err in awarding attorney’s fees to the Estate?
STANDARDS OF REVIEW
¶20 We review a district court’s conclusions of law for correctness. Weter v. Archambault, 2002 MT 336, ¶ 18, 313 Mont. 284, 61 P.3d 771. We review a district court's ruling on a motion for summary judgment de novo, applying the same criteria as the district court. Cole v. Valley Ice Garden, L.L.C., 2005 MT 115, ¶ 4, 327 Mont. 99, 113 P.3d 275. We review a district court’s jury instructions to determine whether the instructions, as a whole, folly and fairly instruct the jury on the applicable law. State v. Hudson, 2005 MT 142, ¶ 10, 327 Mont. 286, 114 P.3d 210. The instructions must prejudicially affect a party’s substantial rights to constitute reversible error. Hudson, ¶ 10.
¶21 A district court abuses its discretion if it acts arbitrarily without the employment of conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice. State v. Daniels, 2011 MT 278, ¶ 11, 362 Mont. 426, 265 P.3d 623.
DISCUSSION
¶22 1. Did the District Court err when it applied the notice-prejudice rule in finding that CULI was liable to the Estate for the untimely-filed claims?
¶23 The “notice-prejudice” rule in the realm of insurance law provides that late notice of a claim (i.e., notice outside the time limit established in the written insurance policy) will not preclude coverage unless the insurer can demonstrate that it was prejudiced by the lateness of the notice. We have previously applied elements of the notice-prejudice rule in uninsured and underinsured motorist cases without explicitly adopting the rule. We do so now in the context of first party insurance claims.
¶24 We begin our analysis with the proposition that if an insurance contract’s terms are clear and unambiguous, we will enforce the terms as written unless the term violates public policy. State Farm Mut. Auto. Ins. Co. v. Gibson, 2007 MT 153, ¶ 11, 337 Mont. 509, 163 P.3d 387. However, “a provision that defeats coverage for which valuable consideration has been received violates Montana public policy.” State Farm, ¶ 11.
¶25 In Sorensen v. Farmer’s Ins. Exch., 279 Mont. 291, 927 P.2d 1002 (1996), we considered a situation where an injured motorist, Sorensen, settled a third party claim and executed a release with State Farm (the other driver’s insurer) before bringing an underinsured motorist claim against her own insurer, Farmers Insurance Exchange. Farmers denied coverage, citing a policy provision prohibiting Sorensen from doing anything to prejudice Farmers’ subrogation rights. Farmers argued that by executing the release against the liable parties and State Farm, Sorensen destroyed its subrogation rights and breached the insurance contract.
¶26 Citing a plethora of cases from other jurisdictions, we adopted a “no prejudice” rule, holding that, as a matter of public policy, “denying accident victims indemnification based upon their action which can have no effect on the insurer’s ability to subrogate will not further the purpose of underinsured motorist coverage.” Sorensen, 279 Mont. at 294-296, 927 P.2d at 1004-1005.
¶27 We followed Sorensen with Augustine v. Simonson, 283 Mont. 259, 940 P.2d 116 (1997). In Augustine, we considered “exhaustion” clauses in underinsurance policies. Concluding that such clauses were against public policy, we stated: “[ajbsent some showing of material prejudice to the underinsurance carrier, a claim for underinsured motorist coverage may not be precluded on a technicality.” 283 Mont. at 264, 940 P.2d at 119 (citing Sorensen, 279 Mont, at 295,927 P.2d at 1004).
¶28 In Augustine, while not directly addressing the notice-prejudice rule, we also cited § 28-2-701, MCA, which provides an exception to enforcing an unambiguous contract provision “if that term violates public policy or is against good morals.” 283 Mont. at 263-264, 940 P.2d at 119.
¶29 More recently, in Lee v. Great Divide Ins. Co., 2008 MT 80, 342 Mont. 147, 182 P.3d 41, we upheld a denial of coverage for violation of a notice provision after discussing the ways the late notice had prejudiced the insurer. Lee, ¶¶ 20-21. Such analysis would be unnecessary without the unstated possibility that a lack of prejudice could have compelled a different result. These cases demonstrate our longstanding inclination to require an insurer to establish prejudice by late notice of a claim before we will enforce the coinciding exclusion.
¶30 Additionally, the notice-prejudice rule accords with Montana’s established anti-forfeiture laws. Section 28-1-408, MCA, provides that a contract provision involving a forfeiture “must be strictly interpreted against the party for whose benefit it is created.” Section 28-1-104, MCA, provides that a party in danger of forfeiting the benefits of a contract due to a failure to comply with a provision in the contract “may be relieved from the obligation upon making full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty.” These statutes are particularly applicable to situations involving failures to comply with time limitations. We have explained that § 28-1-104, MCA, was enacted “for the benefit of obligors whose failure to punctually perform would result in loss to them in the matters in respect to which they have contracted.... The intention of the law under this statute is that a forfeiture should not be needlessly enforced.” Quigley v. Acker, 1998 MT 72, ¶ 31, 288 Mont. 190, 955 P.2d 1377 (quoting Yellowstone County v. Wight, 115 Mont. 411, 417, 145 P.2d 516, 518 (1943)) (emphasis added).
¶31 The statute prevents forfeiture where the party failing to comply with a contract provision can fully compensate the other party for any ipjury caused by the failure. It follows that if the aggrieved party does not suffer injury, no compensation is required to avoid forfeiture except in the case of a grossly negligent, willful, or fraudulent breach of duty, which is not alleged here.
¶32 Thus, in situations where the aggrieved party is not injured by the other party’s failure to comply with a notice provision, the protections provided by the notice-prejudice rule mirror those protections enumerated in our anti-forfeiture statutes. Under the statutes, a party who fails to comply with a time limit provision may avoid forfeiture without compensating the other party unless that other party is injured by the failure. Likewise, under the notice-prejudice rule, an insured who fails to comply with a notice provision may avoid having coverage defeated unless the insurer is prejudiced by the failure.
¶33 On the other hand, if the aggrieved pariy/insurer can show that it was injured/prejudiced by the other party’s failure, neither the anti-forfeiture statute nor the notice-prejudice rule would protect the failing party from forfeiture/defeat of coverage.
¶34 These statutes establish the public policy of Montana that forfeiture should not be enforced absent injury or prejudice. The similarities in both intent and effect between the anti-forfeiture statute and the notice-prejudice rule support our adoption of the latter. In a practical sense, the notice-prejudice rule could be viewed as an application of the anti-forfeiture statute to situations where the potential injury to the aggrieved party — prejudice—cannot be cured by compensation, and thus forfeiture may be avoided only in the absence of injury.
¶35 Additionally, the notice-prejudice rule accords with the well-established contract principle of non-material breach. Generally, a non-breaching party must continue to perform its obligations under a contract unless the breach was material to the contract. The Restatement (Second) of Contracts states: “[t]o the extent that the nonoccurrence of a condition would cause disproportionate forfeiture, a court may excuse the non-occurrence of that condition unless its occurrence was a material part of the agreed exchange.” Restatement (Second) of Contracts, § 229 (1979). A comment further explains what constitutes a “disproportionate” forfeiture:
In determining whether the forfeiture is “disproportionate,” a court must weigh the extent of the forfeiture by the obligee against the importance to the obligor of the risk from which he sought to be protected and the degree to which that protection will be lost if the non-occurrence of the condition is excused to the extent required to prevent forfeiture. The character of the agreement may, as in the case of insurance agreements, affect the rigor with which the requirement is applied.
Restatement (Second) of Contracts, § 229, cmt. b. See also Flaig v. Gramm, 1999 MT 181, ¶ 25, 295 Mont. 297, 983 P.2d 396 (“in order for a breach to justify the injured party’s suspending performance, the breach must be significant enough to amount to the nonoccurrence of a constructive condition of exchange”) (quoting E. Allan Farnsworth, Contracts § 8.16, at 611 (1982)). The notice-prejudice rule is an application of this principle in the insurance context. The rule prevents insurers from suspending performance due to the insured’s failure to comply with the policy notice provision unless the insurer can establish prejudice and thus demonstrate that the failure was material.
¶36 CULI argues that this Court rejected application of the notice-prejudice rule in Steadele v. Colony Ins. Co., 2011 MT 208, 361 Mont. 459, 260 P.3d 145. We disagree. In Steadele we considered a third party claim against an insurer where the insured had failed to provide notice of the claim within the notice requirement in the policy. In our analysis, we first cautioned that “[ejxclusions from coverage are to be narrowly and strictly construed because they are contrary to the fundamental protective purpose of an insurance policy.” Steadele, ¶ 18. We also noted that prior cases in Montana have treated notice provisions as conditions precedent to coverage. Steadele, ¶ 22 (citing LaBonte v. Mut. Fire & Lightning Ins. Co., 75 Mont. 1, 12, 241 P. 631, 635 (1925); Riefflin v. Hartford Steam Boiler Inspection & Ins. Co., 164 Mont. 287, 293, 521 P.2d 675, 678 (1974)). In upholding the denial of coverage, however, we focused on the fact that the lack of timely notice did in fact prejudice the insurer because “it was deprived of the ability to investigate, to locate witnesses, to appoint counsel, to engage in discovery, to negotiate a settlement, and to develop a trial strategy.” Steadele, ¶ 28. We also explained that the failure to notify in that case was not “de minimus ” Steadele, ¶ 29. These holdings are consistent with application of the notice-prejudice rule.
¶37 By expressly adopting the notice-prejudice rule, we reach the natural conclusion of an ongoing trend in our jurisprudence. See XL Specialty Ins. Co. v. Patrol Helicopters, Inc., 2009 U.S. Dist. LEXIS 118475 (D. Mont.) (affirming XL Specialty Ins. Co. v. Patrol Helicopters, Inc., 2009 U.S. Dist. LEXIS 118580 (D. Mont.) (predicting this Court would apply notice-prejudice rule based on public policy and previous decisions)). Our willingness to adopt the notice-prejudice rule stems not only from public policy concerns, but from anti-forfeiture protection principles codified by the Montana Legislature, and from equitable principles established in contract law. In adopting the rule, we join a vast majority of states that have done the same. See Prince George’s County v. Local Gov’t Ins. Trust, 388 Md. 162, 183, n.9, 879 A.2d 81, 94, n.9 (Ct. App. Md. 2005) (collecting cases). Our decision here reaffirms our commitment to upholding the “fundamental protective purpose” of an insurance contract and ensures that a non-material, technical breach of a notice provision will not deprive the insured of coverage for which valuable consideration has been paid. Steadele, ¶ 18; State Farm, ¶ 11. “[PJublic policy considerations favor adequate compensation, even for non-mandatoiy coverage.” State Farm, ¶ 21.
¶38 [1] To restate: the notice-prejudice rule allows an insurer to deny coverage based on a failure to comply with a policy notice provision only if the insurer can demonstrate that it was prejudiced by the late notice. Here, CULI admitted to the District Court that it was not prejudiced by late notice. The District Court thus found that CULI was prohibited from denying the Estate’s claims on the basis of late notice.
¶39 The District Court’s application of the notice-prejudice rule in this case is hereby affirmed and we formally adopt the notice-prejudice rule in the first party insurance coverage context.
¶40 2. Did the District Court err when it instructed the jury that it must first find UTPA damages beyond damages for failure to pay benefits under the policy before considering malice and punitive damages ?
¶41 The answer to this question hinges on our interpretation of § 33-18-242, MCA, of the UTPA. We hold that when an insurer is found to have violated the UTPA, damages due to denial of claims or delay in payment of claims in breach of the insurance contract may constitute compensatory UTPA damages sufficient to present the question of malice to the trier of fact.
¶42 Section 33-18-242, MCA, provides a cause of action against an insurer for engaging in certain unfair claim settlement practices listed in § 33-18-201, MCA. These practices include the one allegedly committed by CULI: “neglecting] to attempt in good faith to effectuate prompt, fair, and equitablé settlements of claims in which liability has become reasonably clear.” Section 33-18-201(6), MCA. Section 33-18-242(4), MCA, provides that, for violations of § 33-18-201(6), MCA, “[e]xemplaiy [(i.e. punitive)] damages may also be assessed in accordance with 27-1-221.” Section 27-1-221, MCA, allows for the award of punitive damages when a defendant is found to have committed actual malice. Section 27-1-221(1), MCA.
¶43 In its instructions the District Court directed the jurors to determine whether CULI had violated the UTPA and, if so, to determine what damages were caused by CULFs violation. If the jurors determined that CULFs violation did not cause additional damages they were directed not to answer the questions of whether CULI was guilty of actual malice or whether CULFs malicious behavior warranted an award of punitive damages.
¶44 The Estate urges this Court to reverse and remand for a new trial because the District Court’s jury instructions incorrectly required the jury to find UTPA damages in addition to the damages proximately caused by the breach of the insurance contract before it could consider the question of malice. The Estate asks that we clarify the standard and hold that damages arising out of a breach of an insurance contract can simultaneously comprise proximately caused UTPA damages that can give rise to punitive damages if malice is shown.
¶45 CULI maintains that the special verdict form was correct because § 27-1-220(1), MCA, predicates the award of punitive damages on an award of compensatory damages and that § 27-1-220(2), MCA, expressly prohibits an award of punitive damages in actions arising from a breach of contract. CULI asserts that, absent the jury finding specific UTPA damages in addition to the damages resulting from the breach of contract, a jury cannot consider the question of whether the insurer demonstrated malice sufficient to award punitive damages. We disagree.
¶46 Section 27-l-220(2)(a), MCA, prohibits punitive damages in contract cases, “[u]nless otherwise expressly provided by statute....” Section 27-l-220(2)(b), MCA, expressly states, “[s]ubsection (2)(a) does not prohibit recovery of punitive damages in... an action arising under 33-18-201,” the UTPA statute at issue. Section 27-1-220, therefore, does not foreclose the possibility of a recovery of punitive damages in a UTPA action premised on a breach of the insurance contract.
¶47 CULI contends that we settled this issue in its favor by holding in Jacobsen v. Allstate Ins. Co., 2009 MT 248, 351 Mont. 464, 215 P.3d 649, that, even under the UTPA, compensatory damages are a prerequisite to punitive damages. We do not disagree with CULI’s characterization of our holding, but we disagree that the case is applicable to this situation. InJacobsen, a third party (Jacobsen) brought a claim against Allstate for damages arising out of a car accident caused by Allstate’s insured. After a contentious settlement process, Jacobsen filed a complaint against Allstate, seeking compensatory damages for, inter alia, violation of the UTPA and common law bad faith. Jacobsen also sought punitive damages, alleging actual malice. Jacobsen, ¶¶ 2-3. A jury found that Allstate committed common law bad faith and violated the UTPA. As damages, the jury awarded Jacobsen the costs and fees incurred while settling the underlying claim. The jury also found Allstate acted with actual malice and awarded Jacobsen punitive damages. Jacobsen, ¶ 6.
¶48 On appeal, we reversed the award of compensatory damages because, absent a specific exception, neither costs nor attorney’s fees are recoverable compensatory damages in a claim for insurance bad faith. Jacobsen, ¶¶ 18-24. Having reversed the compensatory damages we reversed the award of punitive damages because “without an award of compensatory damages, there can be no award of punitive damages.” Jacobsen, ¶ 67.
¶49 Jacobsen is distinguishable from the case at hand. The question in Jacobsen was, in relevant part, whether costs and attorney’s fees could function as compensatory damages under the UTPA. Here, the question is whether the court’s award of benefits via directed verdict served as an award of compensatory damages sufficient to place the question of punitive damages before the juiy without requiring the establishment of additional damages. Our holding in Jacobsen, therefore, does not support CULFs argument.
¶50 Section 33-18-242, MCA, expressly provides for an award of punitive damages in cases of certain UTPA violations. It does not condition the award of punitive damages on a showing of compensatory damages beyond the damages arising out of the breach of the insurance contract which gave rise to the UTPA action. The purpose of § 33-18-242, MCA, is to provide an additional cause of action, beyond simply an action for breach of contract, where an insurer violates the good faith claim settlement practices set forth in § 33-18-201, MCA. The fact that damages due to a breach of the UTPA may also be damages arising out of a breach of contract should not preclude the award of punitive damages if it can be shown that the insurer acted with malice.
¶51 In Lorang v. Fortis, 2008 MT 252, 345 Mont. 12, 192 P.3d 186, we held that “Montana’s statutory law provides that punitive damages may be assessed against an insurer which has committed the UTPA violations alleged here.” Lorang, ¶ 90 (citing § 33-18-242(4), MCA). We did not state that the insured must show damages beyond those caused by the breach of contract to seek punitive damages. We further stated “[t]he UTPA provides that, in addition to punitive damages, a claimant may recover the ‘actual damages’ which were proximately caused by a UTPA violation.” Lorang, ¶ 192. Again, we did not require damages beyond those caused by breach of the insurance contract. The fact that we did not require non-contract based damages is significant since virtually every UTPA claim arises from a breach of the insurance contract.
¶52 We do not hold that a party may seek punitive damages under the UTPA absent a showing of compensatory damages. Nor do we hold that an insurer who breaches the insurance contract has necessarily violated the UTPA. Rather, we hold that where an insurer has been found to have violated the UTPA due to delay or refusal to pay benefits in breach of the insurance contract, damages resulting from that violation may be considered compensatory damages under the UTPA for purposes of pursuing punitive damages.
¶53 Because we hold that, when an insurer is found to have violated the UTPA, breach of contract damages can also constitute compensatory damages for that violation, we conclude that the District Court’s jury instruction — which required the jury to find UTPA damages beyond damages for denial of benefits and late payments before it could consider the question of actual malice — did not fully and faithfully explain the law. The instruction prejudicially affected the Estate’s right to seek punitive damages. We therefore hold that the instruction constituted reversible error.
¶54 The jury in this case found that CULI violated the UPTA, and the court entered a directed verdict in favor of the Estate for $539,717.90. We remand for a new trial on the issue of malice and punitive damages with the instruction that the jury should consider the amount of the directed verdict to constitute damages under the UTPA.
¶55 3. Did the District Court err by failing to direct a verdict against CULI for violating the UTPA?
¶56 The Estate asks us to reverse the District Court’s failure to direct a verdict against CULI for violating the UTPA because CULI denied that Judith’s death certificate was sufficient proof of loss for the cancer treatment claims, and because CULI admitted that it erroneously delayed payment on medical and death benefits. We decline to reach this issue, however, because here the jury found that CULI did in fact violate the UTPA and, on remand, the District Court will instruct the jury to that effect.
¶57 4. Did the District Court err when it did not dismiss the UTPA claim because CULI had a reasonable basis in law for denying the untimely filed claims?
¶58 Section 33-18-242(5), MCA, provides that an insurer may not be held liable for violating the UTPA if the insurer “had a reasonable basis in law” for contesting the claim. CULI moved for partial summary judgment, arguing that the notice of loss provision in its policy gave it a reasonable basis in law for contesting the claim. The District Court examined the state of Montana law with regards to the notice-prejudice rule at the time CULI made its coverage determination and concluded that the law was unsettled at the time. The court then considered the Estate’s contention that CULI acted unreasonably because it made its coverage determination without reference to Montana law and denied the motion, concluding that factual issues remained to be determined at trial.
¶59 The relevant inquiry in determining whether an insurer acted unreasonably under the UTPA is “how the insurer acted given the information available to it.” Peterson v. Doctor’s Co., 2007 MT 264, ¶ 43, 339 Mont. 354, 170 P.3d 459 (emphasis in original). CULI argues that we must consider the state of Montana law at the time CULI made its coverage determination, and that, because we had not explicitly adopted the notice-prejudice rule when CULI denied the claims, it was reasonable for CULI to rely on the notice of loss provision in the policy in denying coverage to the Estate. In support of this argument, CULI cites Redies v. Attys. Liab. Prot. Soc’y, 2007 MT 9, 335 Mont. 233, 150 P.3d 930.
¶60 In Redies, we addressed the question of whether a determination of “reasonable basis in law” under § 33-18-242(5), MCA, was an issue of fact or law. In that case, an insurer contested a claim on the basis that it owed no duty to a third party claimant. Redies, ¶ 23. We reiterated the general proposition that questions of reasonableness were factual matters properly answered by the finder of fact. Redies, ¶ 30. However, we also pointed out that our prior jurisprudence had adopted two exceptions to this rule where the insurer’s reasonableness is a question of law for the court to decide. First, we recognized an exception in situations where there was clearly no insurance policy in effect at the time the injury occurred. Redies, ¶ 31. Second, we recognized an exception where the insurer’s basis in law was grounded on a legal conclusion and no issues of fact remained in dispute. Redies, ¶ 32 (citing Watters v. Guaranty Nat. Ins. Co., 2000 MT 150, ¶ 69, 300 Mont. 91, 3 P.3d 626). Under the second exception, we held that the insurer had a reasonable basis in law to deny the claim because Montana law at the time was unsettled and could be reasonably interpreted to support the insurer’s denial. Redies, ¶¶ 53-58.
¶61 CULI points to this holding as dispositive authority for the proposition that it had a reasonable basis in law for denying the claim, and thus the District Court should have dismissed the UTPA claim as a matter of law. We disagree. We recognize that, despite a trend in our jurisprudence toward adopting the notice-prejudice rule, that point of law remained unsettled when CULI made its coverage decision. However, Redies is distinguishable from the instant case in one crucial way. In Redies, we upheld the district court’s determinations that no facts remained in dispute and that the question of reasonableness hinged solely on whether the insurer’s decision to deny the claim was “grounded on a legal conclusion.” Redies, ¶ 34. We explained that, “[wjhile the assessment of reasonableness generally is within the province of the jury... reasonableness is a question of law for the court to determine when it depends entirely on interpreting relevant legal precedents and evaluating the insurer’s proffered defense under those precedents.” Redies, ¶ 35 (emphasis added).
¶62 Here, the District Court found that the question of whether CULI had reasonably grounded its denial on a legal conclusion was not entirely a matter of interpreting legal precedents and therefore was an issue of fact for the jury to decide. In denying CULI’s motion for summary judgment the court noted that “the propriety of the insurer’s action must be based in light of the information possessed by the insurer at the time it adjusted the underlying claim.” The court also explained that the Estate had raised questions about whether “the claim here was rejected based on a nationwide policy that had little or nothing to do with considerations of Montana law.” At trial both sides presented evidence as to what CULI knew or did not know about Montana law when it denied the claim. The parties introduced evidence ranging from the state of Montana law at the time of denial to whether CULI’s claim denial policy was based on informed legal conclusions. Such evidence was proper, because “[t]o determine whether an insurer had ‘a reasonable basis in law... for contesting the claim or the amount of the claim,’ it is necessary first to survey the legal landscape as it existed during the relevant time period.” Redies, ¶ 29 (quoting § 33-18-242(5), MCA). And, “[t]he legal advice which informed [the insurer’s] decision to contest [the] claim is relevant to whether that decision was grounded in ‘a reasonable basis in law.’ ” Redies, ¶ 57. The court instructed the jury on the reasonable basis defense and the jury returned a verdict finding that CULI violated the UTPA.
¶63 The District Court correctly applied our holding in Redies when it determined that the reasonable basis defense issue in this case was not solely a matter of interpreting legal precedent and allowed the jury to hear evidence about CULI’s knowledge and application of Montana law. The District Court did not err when it denied CULI’s motion for summary judgment.
¶64 5. Did the District Court err by applying the statute of limitations from the date the PRs submitted their claim to CULI rather than from the date suit was filed?
¶65 The statute of limitations for commencing an action on a written contract, including an insurance contract, is eight years from the date the claim accrues. Section 27-2-202(1), MCA. A claim accrues when all elements of the claim have occurred. Section 27-2-102(lXa), MCA. An action is commenced when the complaint is filed. Section 27-2-102(l)(b), MCA.
¶66 In applying the statute of limitations to the oldest claims for medical benefits, the District Court calculated the limitation period from the date CULI received Judith’s death certificate, April 12,2010. Under that calculation, any claims accruing prior to April 12, 2002, would be barred by the statute of limitations. CULI maintains that the District Court should have applied the statute of limitations from the date CULI filed its declaratory judgment action in Federal District Court, on June 24,2011. Calculating from that date would bar all the Estate’s claims prior to June 24, 2003. The Estate requests that we affirm the District Court’s application of the statute of limitations.
¶67 In its order applying the statute of limitations from April 12,2011, the District Court correctly noted that a cause of action accrues, and the corresponding statute of limitations begins to run, when “the right to maintain an action on the claimis complete.” Section 27-2-102(l)(a)-(2), MCA. However, the corut then wrote: “[in briefing, CULI] admits that ‘an insurance claim does not accrue... until a claim is submitted ....’ citing Mont. Petroleum Tank Release Comp. Bd. v. Capitol Indem. Co., 2006 MT 133, ¶ 18... Mont. Petroleum Tank Release Comp. Bd. v. Empire Fire & Marine Ins. Co., 2008 MT 195, ¶¶ 20,24....” Relying on CULI’s ‘admission,’ the court applied the statute of limitations from the date the claim was submitted (i.e., the date CULI received notice of the claim) rather than the date the action was filed.
¶68 A review of the record and our case law reveals the court to be in error. In its briefing before the District Court, CULI stated, “the [Montana Supreme] Court rejected the argument that an insurance claim does not accrue ... until a claim is submitted... .” (Emphasis added) (citations omitted). Our case law demonstrates that CULI was, and remains, correct. We have repeatedly stated that the accrual of a cause of action does not depend on when a claim is submitted to an insurer. Mont. Petroleum Tank Release Comp. Bd. v. Capitol Indemnity, 2006 MT 133, ¶ 18, 332 Mont. 352, 137 P.3d 522 (Capitol Indemnity)’, Mont. Petroleum Release Comp. Bd. v. Empire Fire & Marine Ins. Co., 2008 MT 195, ¶¶ 20, 24, 344 Mont. 54, 185 P.3d 1021 (Empire Fire). Rather, a claim accrues when all elements of that claim have occurred. Section 27-2-102(lXa), MCA; Capitol Indemnity, ¶ 18; Empire Fire, ¶¶ 20,24. In this case, a claim accrued for each medical treatment when the treatment occurred and Judith incurred the costs associated with that treatment.
¶69 CULI filed its declaratory judgment action on June24,2011. Thus under the eight year statute of limitations for contract claims, any claims that accrued prior to June 24,2003, are barred by the statute of limitations. On remand the District Court should amend the judgment against CULI to reflect this calculation.
¶70 As a final matter, the Estate argues that we should adopt an equitable tolling doctrine in first party insurance cases that would toll the statute of limitations during the period after the insurer has received notice of the claim until formal denial is provided to the insured. However, the Estate, in its opening brief, did not request that we reverse the District Court and apply an equitable tolling doctrine with regard to the statute of limitations issue. Despite substantial discussion of the issue in front of the District Court, before this Court the Estate only raised the issue in answer to CULFs cross-appeal requesting us to apply the statute of limitations as we do now. We will not reach an issue of such importance to our insurance jurisprudence without complete briefing on the issue by the parties. Therefore, without precluding our application of a first party insurance equitable tolling doctrine in the future, we decline to consider the issue here.
¶71 6. Did the District Court err in allowing the Estate to present evidence of out-of-state law and claim handling practices that were not directly related to the case at hand and allowing CULI to present evidence of Montana cases related to the notice-prejudice rule ?
¶72 The Estate argues that the District Court erred in allowing CULI to present evidence of Montana judicial opinions related to the notice-prejudice rule. CULI counters that the District Court erred by allowing the Estate to present evidence of laws from other jurisdictions, evidence of unrelated actions against CULI, and evidence of claim handling practices of other insurers.
¶73 As discussed in ¶¶ 54-59 above, CULI relied on the reasonable basis in law affirmative defense provided in § 33-18-242(5), MCA, to avoid liability under the UTPA. As part of its affirmative defense, CULI presented evidence of Montana judicial opinions tending to show the unsettled nature of Montana law with regard to the notice-prejudice rule. CULI attempted to demonstrate that its denial of the Estate’s claim was reasonable because Montana law did not prohibit it from denying the Estate’s claim based on late notice.
¶74 In arguing to the contrary, the Estate presented evidence that CULI disregarded the laws of Montana and other states and comparative evidence of CULI’s and other insurers’ claim handling practices to show that CULI did not have a reasonable basis to deny the Estate’s claims.
¶75 Montana R. Evid. 401 provides that evidence is relevant if it “[has] any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” As demonstrated by our analysis in Redies, an insurer’s actual knowledge of the law and whether the insurer relied upon a reasonable conclusion of law in denying a claim are both relevant to the question of whether the insurer had a reasonable basis defense to the UTPA. Redies, ¶ 57. It stands to reason that, in order to demonstrate that it had a reasonable basis in law for denying a claim, an insurer should be able to present evidence as to the state of the law when the denial was made. The insured, on the other hand, should be allowed to present evidence of the insurer’s actual knowledge of the law and whether it reasonably relied on that knowledge in denying the claim.
¶76 Here, the District Court fairly allowed both sides to present legal and factual evidence relevant to CULI’s reasonable basis defense. The District Court exercised its judgment within the bounds of reason. We hold that the District Court properly exercised its discretion in allowing CULI to present evidence of cases addressing the notice-prejudice rule that were decided after CULI denied the Estate’s claim. Those cases demonstrated the unsettled nature of Montana law with regard to the notice-prejudice rule at the time CULI denied the Estate’s claim. We further hold that the District Court properly exercised its discretion in allowing the Estate to present evidence of how CULI and other insurers handle untimely filed claims in other states. That evidence was relevant in order to refute CULI’s affirmative defense that it had a reasonable basis for denying the Estate’s claims. We affirm the District Court on this issue.
¶77 7. Did the District Court err in awarding trial costs to CULI where the jury found that the UTPA was violated and the court entered a directed verdict in favor of the Estate?
¶78 A plaintiff is entitled to costs in an action for the recovery of money or damages where the judgment is in the plaintiffs favor and the plaintiff recovers over $50. Section 25-10-101(3), MCA. Conversely, when judgment is in the defendant’s favor costs must be allowed to the defendant. Section 25-10-102, MCA. Here, the District Court granted costs to CULI, reasoning that because the jury awarded no damages to the Estate, CULI was the prevailing party.
¶79 We held above that the District Court erred by preventing the jury from reaching the question of malice and we ordered the case remanded for a new trial on that issue. Accordingly, we reverse the award of trial costs to CULI.
¶80 8. Did the District Court err in awarding attorneys> fees to the Estate?
¶81 The District Court awarded the Estate attorney’s fees and costs based on the contractual damages awarded in the directed verdict on the first day of trial. “Montana follows the American Rule regarding attorney fees where each party is ordinarily required to bear his or her own expenses absent a contractual or statutoiy provision to the contrary. However, there are several equitable exceptions to this rule.” Winter v. State Farm, 2014 MT 168, ¶ 31, 375 Mont. 351, 328 P.3d 665 (citing Mt. W. Farm Bureau Mut. Ins. Co. v. Brewer, 2003 MT 98, ¶ 14, 315 Mont. 231, 69 P.3d 652). One of the exceptions to the American Rule is the “insurance exception” which allows an insured to recover attorney’s fees when she is forced to resort to legal action against the insurer to obtain the full benefit of the insurance contract. Winter, ¶ 31.
¶82 The situation before us falls squarely within the insurance exception to the American Rule. Having been forced to pursue legal action to obtain the full benefit of the insurance contract, the Estate prevailed in recovering more than $500,000. The Estate is entitled to attorney's fees on its action against CULL
¶83 CULI cites Sampson v. Nat’l Farmers Union, 2006 MT 241, 333 Mont. 541, 144 P.3d 797, for the proposition that attorney’s fees may not be awarded in UTPA actions. CULI misstates our holding in Sampson. Sampson involved the question of whether attorney’s fees could be awarded as damages in a UTPA action. We looked to the construction of the UTPA and concluded that, because the legislature had not seen fit to construct the UTPA to provide for the recovery of attorney’s fees, such fees were not allowed as damages in a UTPA action. Sampson, ¶ 22. See also Jacobsen, ¶¶ 18-24. However, we also restated our commitment to the insurance exception of the American Rule. Sampson, ¶ 19. The insurance exception did not apply in Sampson, because the prevailing party was not the insured. It applies to the Estate in this case.
¶84 The District Court’s award of fees and costs to the Estate is affirmed.
CONCLUSION
¶85 With our opinion today we affirm the District Court’s application of the notice-prejudice rule and formally adopt the notice-prejudice rule in first party insurance cases.. We remand for a new trial on the issue of malice and punitive damages in accordance with our holding that, when an insurer is found to have violated the UTPA, a jury is not required to find compensatory damages beyond those for breach of the insurance contract before considering malice and punitive damages under the UTPA.
¶86 We affirm the District Court’s refusal to dismiss the UTPA claim on the issue of whether CULI had a reasonable basis in law to deny the claim. We remand for the District Court to amend its order applying the statute of limitations consistent with our opinion here. We reverse the District Court’s order awarding trial costs to CULI. We affirm the court’s award of costs and attorney's fees to the Estate.
¶87 Affirmed in part, reversed in part, and remanded for proceedings consistent with this opinion.
CHIEF JUSTICE McGRATH, JUSTICES SHEA, COTTER and BAKER concur.
See, e.g., Peloso v. Hartford Fire Ins. Co., 56 N.J. 514, 267 A.2d 498 (1970); Prudential-LMI Com. Ins. v. Superior Court, 51 Cal. 3d 674, 798 P.2d 1230 (1990); Guam Housing & Urban Renewal Auth. v. Dongbu Ins. Co., 2001 Guam 24; Leonard J. Feldman et al, The Equitable Tolling Doctrine in First Party Insurance Coverage Matters; Analysis, Benefits, and an Illustrative Case Study, 41 Tort Trial and Ins. Practice L. J. 61 (Fall, 2005).
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 The surviving adult children (Contestants) of decedent Dorothea Harris (Dorothea) dispute both the informal probate process brought by their stepfather Lincoln Harris (Harris) as well as the validity of a will that devised to Harris all of the mineral rights from their mother’s estate. Contestants appeal an order of the Eleventh Judicial District Court, Flathead County, granting summary judgment in favor of Harris and concluding that Contestants had not offered sufficient evidence to challenge Dorothea’s testamentary capacity or to support their allegations of undue influence. We restate the issues on appeal as follows:
1. Whether the District Court’s order allowing probate of Dorothea’s estate complies with § 72-3-122, MCA.
2. Whether the District Court erred in granting summary judgment to Harris on Contestants’ objections.
¶2 We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
¶3 Dorothea married Harris in 1965 after the death of her first husband, Frank Kinniburgh, in 1963. Frank Kinniburgh is the natural father of the three Contestants. Dorothea and Frank Kinniburgh also had a fourth child, Theodore, who died in 1997.
¶4 Dorothea’s maiden name was Whiteman. Dorothea inherited certain mineral interests in Richland County from her Whiteman ancestors. On March4,1983, Dorothea executed a will (1983 Will) that devised in equal shares to her children, Contestants and Theodore, and her husband, Harris, all of her mineral interests in Richland County. During 1997, Theodore became ill from a heart condition and died. Dorothea acted as Theodore’s primary caregiver while he was ill. Dorothea also was sick during the time she cared for Theodore and, following his illness and death, Dorothea’s health declined. Dorothea died two years later, in 1999.
¶5 On April 9, 1997, during the time that Dorothea was caring for Theodore, she executed a new will (1997 Will). The 1997 Will left Dorothea’s entire estate to Harris, including all of the mineral interests in Richland County, and named Harris as Personal Representative. Harris believed that he and Dorothea held all assets jointly with rights of survivorship and therefore that he did not need to probate Dorothea’s 1997 Will. Earnings from the oil and gas royalties apparently were made payable to both Dorothea and Harris during their marriage.
¶6 Fourteen years later, in 2013, while preparing to drill a well involving the Richland County interests, Diamond Resources, an oil and gas company, determined that Harris was not, in fact, the legal owner of the mineral interests. Diamond Resources informed Harris that a Montana probate proceeding would be required before proceeds from those interests could be distributed. Specifically, Diamond Resources required a deed of distribution conveying Dorothea’s mineral interests. Accordingly, in July 2013, Harris filed an application for informal probate of the 1997 Will and for appointment as Personal Representative.
¶7 The Clerk of Court granted Harris’s application, admitted the 1997 Will to informal probate, and — as specified in the will — appointed Harris as Personal Representative. After receiving notice of the informal probate, Contestants filed pro se requests for a hearing to contest the transfer of all the mineral interests to Harris. Contestants maintained that it was their mother’s intent that they inherit the mineral rights in Richland County. Responding to Contestants’ filings, the District Court ordered that no hearing would be held until Contestants filed verified objections under § 72-1-310, MCA. Contestants filed objections and the District Court held a status conference, at which time the court determined that no distribution of the mineral interests would occur until the objections were resolved.
¶8 A few months later, Harris, in his capacity as Personal Representative, moved for summary judgment and requested that the court allow informal probate of the estate in accordance with the 1997 Will. Contestants, through counsel, opposed the motion on the grounds of untimeliness of the probate of the will, undue influence, and lack of testamentary capacity. Both parties submitted affidavits. Following a hearing, the District Court determined that there were no genuine issues of material fact regarding Dorothea’s testamentary capacity when she executed the 1997 Will, or any genuine issues regarding whether Harris exerted undue influence on Dorothea. The District Court entered a written order allowing Harris to continue with probate of the estate. Contestants appeal.
STANDARDS OF REVIEW
¶9 The interpretation of a statute is a matter of law that we review de novo. Reichert v. State, 2012 MT 111, ¶ 19, 365 Mont. 92, 278 P.3d 455. We also review a district court’s summary judgment rulings de novo. Victory Ins. Co. v. Mont. State Fund, 2015 MT 82, ¶ 10, 378 Mont. 388, 344 P.3d 977. Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3); Victory, ¶ 10.
DISCUSSION
¶10 1. Whether the District Court’s order allowing probate of Dorothea’s estate complies with § 72-3-122, MCA.
¶11 Contestants argue that, under the Uniform Probate Code (UPC) § 72-3-122, MCA, the District Court erred by permitting Harris to initiate probate proceedings on Dorothea’s estate fourteen years after her death. Under the UPC (and with one exception not applicable here), “to be effective to prove the transfer of any property ..., a will must be declared to be valid by an order of informal probate by the clerk or an adjudication of probate by the court.” Section 72-3-102, MCA. Section 72-3-122(1), MCA, states that, generally, no formal or informal probate or appointment proceeding “may be commenced more than 3 years after the decedent’s death,” but proceeds to list exceptions to this rule. See also § 72-3-203(l)(d), MCA (“An application for informal probate of a will must state... that the time limit for informal probate ... has not expired either because 3 years or less have passed since the decedent’s death or, if more than 3 years from death have passed, the circumstances as described in 72-3-122 authorizing tardy probate have occurred”). Harris invokes the exception found in § 72-3-122(lXd), MCA. That subsection states,
an informal appointment or a formal testacy or appointment proceeding may be commenced after the time period if no proceedings concerning the succession or estate administration have occurred within the 3-year period after the decedent’s death, but the personal representative has no right to possess estate assets as provided in 72-3-606 beyond that necessary to confirm title to the property in the successors to the estate, and claims other than expenses of administration may not be presented against the estate.
¶12 Subsection (d) therefore permits an informal appointment or formal testacy proceeding to be initiated more than three years after the decedent’s death with three limitations. First, the subsection is inapplicable if there has been any other proceeding regarding succession or estate administration dining the three-year period. Second, no claims other than for expenses of administration may be considered in a late-filed proceeding. Third, the personal representative’s right to possess estate assets is limited to the possession necessary to confirm title to the estate’s assets in the estate’s successors. We examine whether Harris’s initiation of the probate proceedings in this case runs afoul of any of subsection (d)’s requirements.
¶13 As to the first requirement, the record establishes that there was no proceeding regarding succession or estate administration during the three-year period following Dorothea’s death. Harris’s action therefore does not overstep the first limitation.
¶14 Regarding the second limitation, a “claim” is a liability of the decedent or of the estate arising at or after the decedent’s death, including funeral expenses and expenses of administration, but does “not include ... demands or disputes regarding title of a decedent or protected person to specific assets alleged to be included in the estate.” Section 72-1-103(6), MCA. A claim against the estate is made for matters such as a debt owed by the decedent or by the estate, or for fees of the personal representative. See In re Estate of Barber, 239 Mont. 129, 140, 779 P.2d 477,484 (1989). The definition of a “claim” is distinct from the definition of a “devise,” which “means a testamentary disposition of real or personal property.” Section 72-1-103(11), MCA. See also Estate of Yogiji, 311 P.3d 1224, 1228 (N.M. Ct. App. 2013) (holding that a wife’s action seeking to identify assets representing her share of community property is not a “claim” against husband’s estate). Harris is not pursuing a debt owed by Dorothea or her estate. Accordingly, he has not overstepped the limitation that no claims other than for expenses of administration may be considered.
¶15 Our focus therefore turns to the third limitation, which permits a personal representative to possess estate assets only to the extent “necessary to confirm title to the property in the successors to the estate.” Section 72-3-122(l)(d), MCA. Under the UPC, both real and personal property devolve to a devisee immediately upon the testator’s death, “subject to” the estate’s administration. Section 72-3-101(2), MCA. Section 72-3-606(1), MCA, provides a personal representative the general authority to take possession or control of devised property when “necessary for purposes of administration.” This section ensures that a personal representative retains the power to sell property of the estate, even property that has been specifically devised in the will, if necessary to pay the decedent’s debts, the expenses of administration, or a family allowance. Northland Royalty Corp. v. Engel, 2014 MT 295, ¶ 11, 377 Mont. 11, 339 P.3d 599; Shephard v. Widhalm, 2012 MT 276, ¶¶ 24-25,
¶16 The history of subsection (d)’s enactment confirms our interpretation. The original version of the UPC adopted by the Legislature in 1974 placed strict time limits on when a will could be submitted for probate. It disallowed proceedings to establish a will after three years following the decedent’s death, consistent with the UPC’s policy to “promote a speedy and efficient system for liquidating the estate of the decedent and making distribution to its successors.” Section 72-l-102(2)(c), MCA (1983) (repealed by 1993 Mont. Laws ch. 494, sec. 134). In Estate of Taylor, 207 Mont. 400, 675 P.2d 944 (1984), we held that, in light of this policy, if a will is not probated within three years of death, the assumption of intestacy is final. Taylor, 207 Mont. at 404, 675 P.2d at 946.
¶17 The Montana Legislature adopted subsection (l)(d) of § 72-3-122, MCA, following a 1993 UPC revision by the Uniform Laws Commission. The 1993 version of § 72-3-102 allowed a duly executed will that had not been probated to be admitted as evidence of a devise if there was no previous court proceeding concerning the succession or administration of the estate, and if either oftwo narrow exceptions was satisfied:
(a) The devisee or his successors and assigns possessed the property devised in accordance with the provisions of the will; or (b) The property devised was not possessed or claimed by anyone by virtue of the decedent’s title during the time period for testacy proceedings.
Section 72-3-102(2), MCA (1993).
¶18 The 1995 Legislature enacted general revisions to Montana’s probate code, including revisions to §§ 72-3-102 and 72-2-122, MCA. University of Montana School of Law Professor E. Edwin Eck, also a member of the Uniform Laws Commission, provided to the House Judiciary Committee a written explanation of the amendments regarding revisions to the three-year bar on probate and appointment provisions. E. Edwin Eck, Written Comments to Mont. House Jud. Comm, on S.B. No. 132 (Feb. 28,1995) (Eck Comments). It explained that “the original § 72-3-102 exception permitted proof, otherwise than via a probate proceeding, of wills that were not probated within three years following death because of specified circumstances tending to justify the failure to act in the permitted time.” Eck Comments at 6. The Joint Editorial Board for the UPC (JEB-UPC), a committee of the Uniform Laws Commission, recommended revising the UPC to remove the time bar on proceedings to establish wills, though the three-year period would remain operative to limit contests seekingto upset a prior informal probate or an administered intestate succession. As Professor Eck’s comments explained,
Experience has taught that specification of limited circumstances excusing timely probate of a will was a mistake. As originally framed, the § 72-3-122 exceptions as derived from original § 72-3-102 bristled with potential proof problems that invited litigation. Also, it is far from clear that reasons behind the original UPC policy of definite settlement of certain unopened estates within an arbitrary time period served any policy important enough to block discovery and effectuation of duly executed wills.
Eck Comments at 6. Montana already had adopted its own amendment to § 72-3-122 in 1989 in an attempt to permit late limited proceedings in cases where no probate of a will or administration had occurred during the three-year period. See § 72-3-122(l)(d), MCA (1989). Professor Eck explained that this deviation, and similar measures in other states, demonstrated that late-offered wills occur frequently “and that XJPC’s effort to classify such estates as intestate unless original UPC § 3-102’s exception applies is not acceptable to important numbers of practicing attorneys.” Eck Comments at 6. Under the provision recommended by the JEB-UPC, “informal appointment proceedings can be used to generate title-perfecting paperwork in successors, whether testate or intestate, when no probate or appointment proceeding occurred within three years.” Eck Comments at 7. Professor Eck noted that the former version of § 72-3-122 permitted this result, “but only in the narrowly described and troublesome to prove situations deemed sufficient to excuse timely proceedings.” Eck Comments at 7.
¶19 Applying the foregoing to Harris’s initiation of probate proceedings, we determine that Harris has not overstepped the limitation that he possess Dorothea’s estate only as necessary to generate title perfecting work in the estate’s successors. Harris opened the probate to confirm title to the mineral interests in accordance with the provisions of the 1997 Will. No other proceedings had been opened since Dorothea’s death. The general three-year time bar does not bar probate of the estate. To the extent that Estate of Taylor conflicts with this holding, it relies on abrogated law, and it is therefore overruled.
¶20 2. Whether the District Court erred in granting summary judgment to Harris on Contestants’ objections.
¶21 Contestants objected to the probate of the 1997 Will on the grounds that, when the will was drafted, Harris exerted undue influence on Dorothea and Dorothea lacked testamentary capacity. Harris responded by arguing that Contestants failed to submit evidence necessary to support these objections, and, in any event, Contestants’ objections were barred by laches. The District Court granted summary judgment to Harris on Contestants’ objections to the 1997 Will because it determined that Contestants failed to submit evidence raising a dispute of material fact about undue influence and testamentary capacity.
¶22 On appeal, Harris argues that the District Court correctly concluded that Contestants failed to support their claims adequately at the summary judgment stage. He also argues that, regardless, laches should apply to bar Contestant’s objections. Laches exists where a “party is actually or presumptively aware of his rights but fails to act,” resulting in a delay of “such duration or character as to render the enforcement of an asserted right inequitable.” Larson v. Undem, 246 Mont. 336, 340, 805 P.2d 1318, 1321 (1990).
¶23 We agree that laches would bar Contestants from probating the 1983 Will. At least one of the contestants filed an affidavit explaining that he was aware that Dorothea had a will that disposed of the mineral interests in a way that benefited Contestants. Despite that knowledge, for fourteen years following Dorothea’s death, Contestants never sought to probate the 1983 Will.
¶24 Laches could not, however, resolve Contestants’ objections to probate of the 1997 Will. Before Harris initiated informal probate proceedings in 2013, Contestants were unaware of 1997 Will. After Harris sought the 1997 Will’s probate, Contestants registered timely objections.
¶25 The application of laches to probate of the 1983 Will does not resolve this case. Even if Contestants are barred from enforcing the 1983 Will, a successful challenge to the 1997 Will on the grounds of undue influence or lack of capacity would result in a declaration of intestacy. Under such a declaration, Contestants likely would be entitled to a share in the mineral interests because they are not Harris’s descendants. See §§ 72-2-112, -113, MCA.
¶26 We thus proceed to examine whether the District Court correctly determined that Contestants failed to raise a genuine issue of material fact with respect to their undue influence and testamentary capacity claims. The party contesting a will on the ground of undue influence “must present specific acts showing that undue influence actually was exercised upon the mind of the testator directly to procure the execution of the will.” In re Estate of Mead, 2014 MT 264, ¶ 27, 376 Mont. 386, 336 P.3d 362 (internal quotation marks and citation omitted). “Mere suspicion” or “[g]eneral allegations of poor health are not sufficient to show undue influence.” Mead, ¶¶ 29, 31 (citation omitted). Contestants submitted affidavits that demonstrated the opportunity for undue influence. These affidavits, however, do not show specific acts of undue influence sufficient to establish a triable dispute on that claim.
¶27 Contestants’ proof of lack of testamentary capacity presents a closer question, but still is not sufficient to withstand summary judgment. A testator is competent to execute a will if he or she is “aware of: (1) the nature of the act to be performed; (2) the nature and extent of the property to be disposed of; and (3) the objects of his or her bounty.” In re Estate of Harms, 2006 MT 320, ¶ 14, 355 Mont. 66, 149 P.3d 557. After a will proponent gives prima facie proof of due execution, the burden is on a will contestant to show lack of testamentary capacity. Harms, ¶ 15.
¶28 Here, Harris met his initial burden by submitting affidavits from two legal assistants who observed Dorothea sign the 1997 Will at the office of Dorothea’s attorney, and who signed the will as witnesses. Both witnesses attested that they would not have signed the 1997 Will if they had any question about Dorothea’s testamentaiy capacity.
¶29 Contestants countered with affidavits from two of Dorothea’s children stating that Dorothea was under “mental stress” and “not in a good frame of mind” in 1997. These allegations do not show that Dorothea did not understand the natures of her act, property, or relations when the 1997 Will was executed. Elaine Thompson’s affidavit does state that the 1997 Will referred to Thompson by her name from a previous marriage, but that was the name used in Dorothea’s 1983 Will. The Thompson affidavit also points out that the 1997 Will mistakenly refers to Tamra Sue Patzer as Harris’s “child by a previous marriage,” when Patzer is actually Harris’s child by a previous relationship, not a marriage. Thompson alleges that this was “not a mistake my mother would have made if she was of sound mind.” “A suspicion, regardless of how particularized it might be, is not sufficient to sustain an action or defeat a motion for summary judgment.” Abraham v. Nelson, 2002 MT 94, ¶ 22, 309 Mont. 366, 46 P.3d 628. Once a party moving for summary judgment meets its initial burden, the parly opposing summary judgment must present “material and substantial evidence” that raises a genuine issue of material fact. MacKay v. State, 2003 MT 274, ¶ 14, 317 Mont. 467, 79 P.3d 236. Material facts are identified by looking at the substantive law governing a claim. McGinnis v. Hand, 1999 MT 9, ¶ 6, 293 Mont. 72, 972 P.2d 1126. Contestants’ affidavits do not present substantial evidence material to their contention that Dorothea was not cognizant of her property, relations, and testamentary act when she signed the 1997 Will. We agree with the District Court that the affidavits do not present a triable issue on testamentaiy capacity.
CONCLUSION
¶30 We affirm the District Court’s order permitting probate of Dorothea’s estate and granting summary judgment to Harris on Contestants’ objections. In light of Contestants’ previous petition to prevent informal probate, we remand for formal testacy proceedings on the 1997 Will. See §§ 72-3-215(2), -302(l)-(2), MCA.
CHIEF JUSTICE McGRATH, JUSTICES COTTER, SHEA and McKINNON concur.
“Successors” include “persons, other than creditors, who are entitled to property of a decedent under the decedent’s will.” Section 72-1-103(48), MCA.
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Bottrell Family Investments filed this breach of contract action in the Thirteenth Judicial District Court, Yellowstone County, seeking damages and a declaratory judgment against Diversified Financial, Inc., Stephen A. Zabawa, and Jason Blair (collectively, “Defendants”). After both Bottrell and Defendants moved for summary judgment, the District Court entered judgment in Defendants’ favor. Bottrell appeals. The issues on appeal are as follows:
1. Whether election of remedies doctrine bars Bottrell’s pursuit of damages;
2. Whether laches bars Bottrell’s action.
¶2 We reverse and remand for the District Court to enter judgment in Bottrell’s favor and to calculate damages.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In 2006, Defendants were developing an integrated software program called Version 1 that would allow auto dealerships to initiate, complete, and account for vehicle sales. Additionally, Defendants had developed a program called Red Flag that trained auto dealership employees. Defendants approached Bottrell about investing in their enterprise. In early 2007, the parties entered into an Operating Agreement to form Dealerspan, LLC, which would own and operate Version 1 and Red Mag. The Operating Agreement provided Bottrell a fifty percent share of the company, with the remaining fifty percent split among Defendants. The Operating Agreement included a doomsday election to buy or sell clause. Under this clause, a partner could inform another partner that, within ninety days, the other partner must elect either to sell his interests or to buy the invoking partner’s interests in the company for a specified price. The electing partner’s choice would form a binding contract.
¶4 In the summer of 2008, Bottrell and Defendants came to loggerheads about the direction that Dealerspan should take. Defendants wanted to seek additional investment to develop Version 1 for market, whereas Bottrell wanted to liquidate Dealerspan. On August 13,2008, Defendants notified Bottrell of a doomsday election to buy or sell for $2.3 million. Bottrell elected to buy Defendants’ interests in Dealerspan for that amount. Defendants did not want to sell their interests, however, so the parties bargained for and entered into a new contract (“the Contract”). The Contract provided that Defendants would buy Bottrell’s interests in Dealerspan for $2.3 million, plus interest, and would reimburse Bottrell for any advances Bottrell would make to Dealerspan between the date of the Contract’s execution and November 14, 2008, the Contract’s closing date. The Contract contained language specifying what would happen in the event that Defendants failed to purchase Bottrell’s interests by the closing date: chiefly, Defendants would forfeit their own fifty percent share in the business to Bottrell “in addition to other remedies.”
¶5 Defendants failed to close and accordingly forfeited their fifty percent share to Bottrell, with Bottrell assuming full control of the company. After the forfeiture, Bottrell solicited offers for Dealerspan, but never sold the company. At one point, Bottrell entered into a contract with defendant Zabawa granting him the power to sell Dealerspan to a third parly for $5 million, but Zabawa was unable to reach terms with the third party. Bottrell determined that Dealerspan was no longer worth the cost of operations, sold some of Dealerspan’s physical assets, and transferred employees working on Version 1 to other subsidiaries. Bottrell continued to collect income from Red Flag.
¶6 On January 14, 2014, Bottrell commenced this action, seeking damages under the August 2008 contract, as well as a declaratory judgment that the Contract is still effective and that Defendants accordingly owe Bottrell $2.3 million, plus $628,000 in advances, plus interest. In June 2014, both parties moved for summary judgment. Defendants argued that the doctrines of election ofremedies and laches barred Bottrell’s suit. Bottrell argued that it was entitled to judgment as a matter of law that Defendants breached the Contract and that, as of June 2014, Defendants owed Bottrell $3,480,728.70 in damages.
¶7 In a terse opinion and order entered in October 2014, the District Court awarded summary judgment to Defendants. Likening Bottrell’s suit to an attempt to “have [its] cake and eat it too,” the District Court determined that, by accepting Defendant’s forfeited interests in Dealerspan, Bottrell elected to pursue the remedy of forfeiture and rescinded the Contract. Consequently, Bottrell could not seek to enforce the Contract’s payment provisions. The District Court also opined that the doctrine of laches would bar Bottrell’s suit. Bottrell filed a timely appeal.
STANDARDS OF REVIEW
¶8 We review entries of summary judgment de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving parly demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. We review a district court’s interpretation of a contract for correctness. Kaufman Bros. v. Home Value Stores, Inc., 2012 MT 121, ¶ 6, 365 Mont. 196, 279 P.3d 157.
DISCUSSION
¶9 1. Whether election of remedies doctrine bars Bottrell’s pursuit of damages.
¶10 The parties do not dispute that the Contract is binding, or that Defendants breached it. They disagree, however, about whether, under the terms of the Contract and the applicable law, Defendants’ breach entitles Bottrell to institute the present action for damages and declaratory judgment.
¶11 “The fundamental tenet of modern contract law is freedom of contract; parties are free to mutually agree to terms governing their private conduct as long as those terms do not conflict with public laws.” Winter v. State Farm Mut. Auto. Ins. Co., 2014 MT 168, ¶ 26, 375 Mont. 351, 328 P.3d 665 (quoting Arrow head Sch. Dist. No. 75 v. Klyap, 2003 MT 294, ¶ 20, 318 Mont. 103, 79 P.3d 250). In construing a contract, we attempt to discern and give effect to the mutual intent of the parties as reflected in the contract’s terms. Sections 28-3-301, -401, MCA.
¶12 The Contract states that Defendants are “jointly and severally liable (personally) to perform all the terms and conditions of this Agreement including the payment of all sums hereunder including but not limited to the sum of $2.3 million plus any advances.” The Contract then goes on to discuss Bottrell’s remedies in case of Defendants’ breach.
6. If [Diversified], Zabawa, and Blair fail to close the transaction on or before the Closing Date, then, in addition to other remedies, they agree, along with [Diversified], that their interest, free and clear of all claims or liens of any nature, is forfeited that they and/or Diversified Financial Incorporated shall have in Dealerspan, LLC and shall have no further rights, interests or title to any of the management or ownership of Dealerspan, LLC in any fashion. They waive any rights under the Operating Agreement, including the right to be bought out and this Agreement shall then act as their resignation from Dealerspan;
7. [Diversified], Zabawa, and Blair acknowledge that, by entering into this agreement, [Bottrell] is compromising its rights significantly. Accordingly, [Diversified], Zabawa, and Blair agree that, in the event Diversified, Zabawa, and Blair are unable to pay the purchase price by the Closing Date, then they shall forfeit and assign their interest in Dealerspan, LLC and [Bottrell] shall have the sole right to liquidate Dealerspan, LLC in any manner that it sees fit. [Diversified], Zabawa and Blair waive any rights they may have against [Bottrell] regarding the liquidation of Dealerspan, LLC. More specifically, [Diversified], Zabawa, and Blair waive any right to require [Bottrell]:
a. Except as provided herein, to give notice of the terms, time, and place of any public or private sale of assets belonging to Dealerspan, LLC, in any specific manner or to comply with any provisions of the Uniform Commercial Code or any provisions of the Montana Code Annotated that relate to liquidation of limited liability companies;
b. To delay the liquidation or sale of assets of Dealerspan, LLC, beyond any date specifically agreed upon by [Bottrell];
c. To sell or liquidate the assets of Dealerspan, LLC, for any minimum price or value;
d. To pursue any other remedy within [Bottrell]’s power such as marshalling; or
e. To commit any act or omission of any kind, or at any time, with respect to any matter whatsoever.
[Diversified], Zabawa, and Blair also waive any and all rights or defenses arising by reason of any “one action” or “anti-deficiency” law or any other law which may prevent [Bottrell] from bringing any action, including a claim for deficiency, against [Diversified], Zabawa, and/or Blair, after [Bottrell]’s liquidation of Dealerspan, LLC. [Diversified], Blair, and Zabawa specifically acknowledge and agree that these waivers are fair and reasonable given the nature of the business of Dealerspan, LLC, and the position that [Bottrell] shall be left in should [Diversified], Zabawa, and/or Blair fail to fund the purchase price by the Closing Date....
While the Contract’s remedies language is clumsy, we discern that it provides Bottrell three sequential remedies in case of Defendants’ breach. First, Bottrell may accept Defendants’ forfeiture of all their interests and rights in Dealerspan. Second, Bottrell may liquidate Dealerspan. Third, if liquidation does not place Bottrell in the position it would have been had Defendants performed, Bottrell may sue Defendants for deficiency — the difference between the amount recovered through the forfeiture and liquidation and the amount owed under the Contract.
¶13 After Defendants breached, Bottrell accepted Defendants’ forfeiture. Bottrell has admitted, however, that it did not liquidate Dealerspan, and it is not currently seeking a deficiency judgment. Rather, Bottrell seeks to collect the amount owed under the Contract.
¶14 Defendants essentially argue that the remedies outlined by the Contract (forfeiture, liquidation, and deficiency) are the exclusive remedies available to Bottrell, so Bottrell cannot pursue different remedies. In Glacier Campground v. Wild Rivers, Inc., 182 Mont. 389, 597 P.2d 689 (1978), we similarly were tasked with discerning the effect of a contract’s remedies section on a plaintiffs ability to pursue a remedy not specifically provided by the contract. Glacier Campground, 182 Mont. at 394, 597 P.2d at 692. That case involved land purchasers who defaulted but argued that contractual language outlining the seller’s ability to repossess the property and retain improvements and previous payments impliedly precluded the seller from pursuing an action for contract damages. Glacier Campground, 182 Mont. at 391-92, 597 P.2d at 690-91. We disagreed, stating, “In the absence of a contractual provision expressly limiting the remedy or remedies available, a party may pursue any remedy which law or equity affords, as well as the remedy or remedies specified in the contract.” Glacier Campground, 182 Mont. at 403, 597 P.2d at 696.
¶15 Here, there is no provision in the Contract expressly limiting the remedies available to Bottrell. In fact, the Contract states that the remedies it outlines are “in addition to other remedies.” Accordingly, the Contract does not limit Bottrell to the remedies provided in the Contract.
¶16 Defendants next argue that, even if the Contract remedies are not the exclusive remedies from which Bottrell may choose, once Bottrell does choose the Contract remedies, it cannot pursue any others. Defendants distinguish the case on appeal from Glacier Campground on the ground that, in Glacier Campground, the plaintiff never elected a remedy before bringing suit, whereas in this case, Bottrell elected to accept Defendants’ forfeiture. Indeed, in Glacier Campground, we noted,
The seller here is not exercising his option to declare the contract at an end. If he were to do so, then he would be precluded from suing to recover the purchase price or payments past due, for he could not reclaim the property under a forfeiture clause and at the same time recover any unpaid portion of the sale price.
Glacier Campground, 182 Mont. at 400, 597 P.2d at 695.
¶17 Defendants’ argument does not appear to rely on any specific language in the contract. Rather, the argument relies on the doctrine of election of remedies. See 3 Dan B. Dohhs, Law ofRemedies § 12.7(6), at 185 (2nd ed. 1992) (“The traditional doctrine [of election of remedies] is to be distinguished from the question whether a remedy provided by the contract itself is the exclusive remedy which bars others.”). Election of remedies doctrine prevents a plaintiff that has elected a remedy from asserting a subsequent, inconsistent remedy. The doctrine of election of remedies requires “(1) the existence of two or more remedies, (2) an inconsistency between such remedies, and (3) a choice of one of them.” Kaufman Bros., ¶ 15; Frazer Educ. Ass’n, MEA/FEA v. Bd. of Trs., Valley Cnty. Elementary Sch. Dist. No. 2, 256 Mont. 223, 227, 846 P.2d 267, 270 (1993).
¶18 Defendants argue that accepting forfeiture is inherently inconsistent with a claim for money damages. To support this proposition, Defendants cite a number of cases in which a plaintiffs recovery of a defendant’s forfeited property was held to preclude the plaintiffs later pursuit of contract damages. See e.g., Kaufman Bros., ¶ 20; Edwards v. Muri, 73 Mont. 339, 351, 237 P. 209, 213 (1925); see also Glacier Campground, 182 Mont. at 400, 597 P.2d at 695 (noting, as quoted above, that if the seller reclaimed forfeited property, he could not sue for the purchase price).
¶19 As we have explained about election of remedies doctrine,
[T]he so-called “inconsistency of remedies” is not in reality an inconsistency between the remedies themselves, but must be taken to mean that a certain state of facts relied on as the basis of a certain remedy is inconsistent with, and repugnant to, another certain state of facts relied on as the basis of another remedy. For one proceeding to be a bar to another for inconsistency, the remedies must proceed from opposite and irreconcilable claims of right and must be so inconsistent that a party could not logically assume to follow one without renouncing the other.
Frazer Educ. Ass’n, 256 Mont. at 229, 846 P.2d at 271 (1993) (quoting 25 Am. Jur. 2d Election of Remedies § 11 (1966)). “To determine whether remedies are inconsistent, the court looks at whether one theory alleges what the other denies or whether one theory is repugnant to the other.” 25 Am. Jur. 2d Election of Remedies § 20 (2014).
¶20 There is a significant difference between the state of facts present in the cases that Defendants cite and the facts in this case. In the cases that Defendants cite, the subject of the contract also was the thing that was forfeited. For instance, inKaufman Bros., the seller of land retook possession of that land after the purchaser’s breach. Kaufman Bros., ¶ 3. By retaking control of the subject of a contract, a seller may be thought of as returning herself to the position she was in before the contract was created — in effect, negating the contract. This negation conflicts with pursuing damages under a contract because the pursuit of contract impliedly affirms the contract. Thus, in Kaufman Bros., because one remedy negated the contract while the other affirmed it, we determined that “[t]he remedy of the [seller] by way of cancellation of the contract and the continued liability of the purchaser for the purchase money are totally inconsistent,” Kaufinan Bros., ¶ 17 (quoting Adamczik v. McCauley, 89 Mont. 27, 36, 297 P. 486, 488 (1931)), and barred the seller’s pursuit of damages.
¶21 Here, by contrast, the Contract’s subject was Bottrell’s interests in Dealerspan, but the properly that was forfeited was Defendants’ interests in Dealerspan. Defendants’ forfeiture of their interests in Dealerspan did not return the parties to the positions they were in before executing the Contract. In other words, the forfeiture in this case did not negate the Contract. As Defendants themselves recognized in March2009, after the forfeiture occurred, the Contract remained “in full force and effect.” The election of remedies cases Defendants cite simply do not stand for the proposition that Bottrell could not accept Defendants’ forfeited interests and then pursue additional remedies. Indeed, the Contract specifically provides for additional remedies beyond forfeiture.
¶22 The Contract does not provide, however, that Bottrell should be placed in a better position through Defendants’ breach than through Defendants’ performance. The successive remedies that the Contract outlines are designed to make Bottrell whole but no more. Under the Contract, if Bottrell accepts Defendant’s forfeited interests and liquidates Dealerspan, it can then sue for deficiency — in other words, the amount left under the purchase price of the Contract. This would not provide Bottrell a double recovery. See also § 27-1-302, MCA (“Damages in all cases must be reasonable.”); McEwen v. MCR, LLC, 2012 MT 319, ¶¶ 65-66, 362 Mont. 38, 291 P.3d 1253 (explaining that damages for breach of contract should not lead to a double recovery or to placing a party in & better position than if the contract had been performed as bargained).
¶23 Thus, while we discern no basis in Defendants’ arguments on the Contract or the law for barring Bottrell’s pursuit of damages, Bottrell may recover only those damages that resolve the difference between the benefit Bottrell derived from Defendants’ breach (including the value of Defendants’ forfeited interests, profits from Red Flag, and profits from selling Dealerspan’s physical assets) and the contract purchase price.
¶24 2. Whether laches bars Bottrell’s action.
¶25 Defendants also assert that laches bars the current action. Aparty asserting the defense of laches bears the burden of showing that it was prejudiced by the other party’s lack of diligence in asserting its rights. Dollar Plus Stores, Inc. v. R-Montana Assocs., L.P., 2009 MT 164, ¶ 31, 350 Mont. 476, 209 P.3d 216. Bottrell waited over five years from the breach of contract in 2008 to file this action in 2014. The statute of limitations for a breach of contract action is eight years. Section 27-2-202(1), MCA. When a party files suit within the applicable period of limitations, we apply the doctrine of laches only in extraordinary circumstances. McGregor v. Mommer, 220 Mont. 98, 107, 714 P.2d 536, 542 (1986).
¶26 Defendants argue that Bottrell’s delay in filing this action prejudiced them because Dealerspan is worth substantially less today than it was at the time of the breach. But Bottrell’s complaint does not request specific performance of the Contract, under which, for the purchase price, Bottrell would be entitled to Dealerspan as it existed in 2008 or 2009. Rather, Bottrell’s complaint seeks damages resulting from Defendants’ breach. Defendants have not submitted evidence showing that Bottrell’s delay in filing this action changed the nature of those damages other than perhaps to increase the amount of interest that may be awarded. Accordingly, Defendants have not shown extraordinary circumstances or prejudice sufficient to justify the application of laches.
CONCLUSION
¶27 We reverse the District Court’s award of summaiy judgment in favor of Defendants and remand for entry of judgment in favor of Bottrell. We also remand for a determination of damages, if any, that are consistent with this opinion.
CHIEF JUSTICE McGRATH, JUSTICES McKINNON, SHEA and WHEAT concur.
We note that the Defendants have not argued that the forfeiture clause represents a liquidated damages clause. See Dobbs, supra, § 12.9(5).
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JUSTICE COTTER
delivered the Opinion of the Court.
¶1 This case arises out of a motor vehicle accident that occurred in May 2011, in Three Forks, Montana. Marian Davis lost control of her vehicle and struck the vehicle driven by Amy Locke. Davis suffered fatal injuries in the collision and died several hours later. Locke also sustained injuries as well as post-traumatic stress disorder.
¶2 At the time of the accident, Davis was insured by Safeco Insurance Company under a policy with a $100,000 per person coverage. In August 2012, Locke filed a claim for damages against Davis’s estate in the Eighteenth Judicial District Court. Prior to trial, Safeco paid Locke $16,306.40 for her past medical expenses. Following a three-day trial conducted in February 2014 and addressing damages only, the jray returned a verdict awarding Locke $400,000 in compensation for her injuries and the District Court awarded her approximately $1,800 in costs. The Estate sought amendment of or relief from the judgment. The District Court denied the motion. The Estate appeals. Safeco intervenes. We affirm in part and vacate and remand in part.
ISSUES
¶3 The Estate presents the following restated issue:
¶4 Did the District Court abuse its discretion in denying the Estate’s motion to alter or amend the judgment?
¶5 Safeco, as intervenor, presents the following issue:
¶6 Did the District Court abuse its discretion when it made findings and conclusions that effectively bind Safeco to a judgment in a case in which Safeco was not a named party, was not represented by counsel, and did not appear?
FACTUAL AND PROCEDURAL BACKGROUND
¶7 On May 26,2011, at approximately 6:15 p.m., Marian Davis was driving south on Main Street, heading into Three Forks. Amy Locke was driving north on the same road. Davis lost control of her car and traveled into the oncoming lane, striking Locke’s vehicle. Both vehicles came to rest on the side of the road in a gravel lot. Davis sustained life threatening injuries and died later that night. Locke suffered multiple physical and emotional injuries. In July 2011, the Estate of Marian Davis (Estate) was opened. As required under § 72-3-801, MCA, notice to creditors was published notifying all persons with claims against Davis to present their claims within four months of publication of notice.
¶8 In August 2012, Locke filed a complaint against the Estate alleging negligence and negligence per se on the part of Davis. In October 2012, she filed a Statement of Damages in which she described her injuries including a broken left hand and soft tissue injuries to her thoracic, cervical, and left shoulder areas. She also claimed that she suffered from anxiety, depression, irritability, and insomnia as aresult of the accident. She asserted damages in excess of $250,000. Safeco paid Locke the sum of $16,306.40 for medical expenses. Prior to trial and on more than one occasion, Locke offered to settle her claim against the Estate within the Safeco policy limits but Safeco rejected her offers.
¶9 The District Court conducted a jury trial on February25-27,2014. The Estate admitted Davis’s liability for causing the accident; therefore, the case was tried solely on damages. At the conclusion of the trial, the jury awarded $400,000 plus interest to Locke for damages suffered as a result of the accident. Judgment was entered on the same day and the court awarded Locke $1,825.18 in costs.
¶10 On March 24,2014, the Estate filed a motion to alter or amend the judgment under M. R. Civ. P. 59(e), or alternatively for relief from the judgment under M. R. Civ. P. 60(b)(6). It argued that the judgment should be reduced to $100,000, i.e., the limit of Davis’s auto liability policy. The Estate asserted that under § 72-3-803, MCA, any claim arising from the accident and seeking damages in excess of the limits of Davis’s insurance protection must be presented within four months of the publishing of the Notice to Creditors or within one year of Davis’s death, or it is barred. The Estate noted that Locke did not file her complaint until August 2012, more than fifteen months after Davis’s death and over one year after the Notice to Creditors was published. It claimed, therefore, that Locke could enforce the judgment against the Estate “to the limits of the insurance protection only.” The Estate also contended that the $16,306.40 Locke received in advance payments for past medical expenses should be credited against the $100,000 limit thus entitling Locke to the remaining balance of $83,693.60 only. The Estate also argued that Locke was prohibited from collecting a judgment against Safeco because Safeco was not a parly to the action. Locke opposed the motion.
¶11 On April 30,2014, the District Court denied the Estate’s motion. Relying on Goettel v. Estate of Ballard, 2010 MT 140, 356 Mont. 527, 234 P.3d 99, the court reasoned that (1) Locke had offered on several occasions to settle her claim within the available policy limits and to release the Estate and Safeco; (2) Safeco rejected the offers and forced Locke to trial; (3) Locke obtained a $400,000 jury verdict; and (4) Safeco continued to refuse to pay the remaining liability policy limits. The court declined to reduce the amount of the judgment. The court also noted that under Goettel, § 72-3-803, MCA, does not protect a liability insurer from an excess judgment and that Safeco waived the policy limits when it rejected Locke’s offers to settle.
¶12 In May 2014, the Estate appealed the court’s April 30 order. Subsequently, we granted Safeco’s motion to intervene. We affirm in part and vacate in part the District Court’s April order and remand for proceedings in accordance with this Opinion.
STANDARD OF REVIEW
¶13 We review a district court’s denial of a motion pursuant to M. R. Civ. P. 59 for an abuse of discretion. In re Marriage of Anderson, 2013 MT 238, ¶ 13, 371 Mont. 321, 307 P.3d 313.
¶14 We review a district court’s ruling on a motion pursuant to M. R. Civ. P. 60(b) based upon the nature of the final judgment, order, or proceeding from which relief is sought and the specific basis of the motion. Generally, we review the district court’s ruling for an abuse of discretion. Exceptions to the general rule include motions made under Rule 60(b)(2), (b)(4), or where relief from a default judgment is sought. Given the facts of this case, the abuse of discretion standard applies. Orcutt v. Orcutt, 2011 MT 107, ¶ 5, 360 Mont. 353, 253 P.3d 884 (internal citations omitted).
¶15 A district court’s interpretation of a statute is a conclusion of law which we review for correctness. Mont. State Fund v. Simms, 2012 MT 22, ¶ 15, 364 Mont. 14, 270 P.3d 64.
DISCUSSION
¶16 Did the District Court abuse its discretion in denying the Estate’s motion to alter or amend the judgment?
¶17 The Estate does not dispute that Locke is entitled to the $100,000 insurance policy limit. It argues that the District Court failed to apply the plain language of § 72-3-803(3Xb), MCA, when it allowed the entire judgment of $401,825.18, inclusive of costs and plus interest, to stand against the Estate rather than reducing the judgment to the $100,000 auto liability policy limit. The Estate further claims that the advance medical payments of $16,306.40 and any costs and interest must be subsumed within the policy limits.
¶18 Title 72, Chapter 3, Part 8 of the MCA addresses, among other things, a creditor’s claims against an estate. Section 72-3-801(1), MCA, provides:
Unless notice has already been given under this section, a personal representative upon appointment shall publish a notice once a week for 3 successive weeks in a newspaper of general circulation in the county announcing the personal representative’s appointment and address and notifying creditors of the estate to present their claims within 4 months after the date of the first publication of the notice or be forever barred.
Section 72-3-803, MCA, provides in relevant part:
(1) All claims against a decedent’s estate that arose before the death of the decedent ... are barred against the estate, the personal representative, and the heirs and devisees of the decedent unless presented within the earlier of the following time limitations:
(a) within 1 year after the decedent’s death; or
(b) within the time provided ... in 72-3-801(1) for all creditors barred by publication....
(3) This section does not affect or prevent:
(b) to the limits of the insurance protection only, any proceeding to establish liability of the decedent or the personal representative for which the decedent or the personal representative is protected by liability insurance;
¶19 Whereas §§ 72-3-801(1) and 72-3-803(1), MCA, require a claimant to bring a claim within four months of publication of notice to creditors or not later than one year after the decedent’s death, § 72-3-803(3)(b), MCA, allows a late-filing claimant to commence an action against the decedent if the decedent was insured. Under such circumstances, however, a claimant may not have judgment against an estate in excess of the limits of the liability insurance policy. Consequently, the Estate is correct that Locke cannot execute against the Estate for more than the $100,000insurance limitation. Locke concedes this but argues that the full judgment should remain intact because it provides the basis for her to pursue an excess judgment against Safeco, as allowed by Goettel.
¶20 In Goettel, Goettel and Ballard were involved in an automobile accident caused by Ballard turning in front of Goettel. Both drivers were seriously injured and Ballard later died from his injuries. Casualty Insurance Company insured Ballard and Ballard’s policy had a $300,000 per person limit. Goettel, ¶¶ 3, 6. Goettel did not file his claim within one year of Ballard’s death but later petitioned the district court to reopen Ballard’s estate to enable Goettel to pursue claims against Casualty and to seek uninsured motorist coverage from his own insurer, Progressive Northwestern Insurance Company. Goettel, ¶ 4. The district court granted Goettel’s petition and Goettel filed his complaint. Goettel, ¶¶ 4-5. Casually initially paid approximately $74,000 to Goettel for medical expenses and wage loss. Goettel, ¶ 6.
¶21 Subsequently, Goettel offered to settle with Casualty for the remainder of the $300,000 policy limits but Casualty rejected the offer and submitted a counteroffer. Goettel declined the counteroffer and indicated in writing that the settlement negotiations were terminated. Shortly thereafter, Casualty issued a check to Goettel for $226,234.46, i.e., the remainder of the policy limits. Goettel accepted the check and cashed it but did not sign a release. Goettel, ¶¶ 6-7. The district court then dismissed Casually from the proceeding and granted the Ballard estate’s motion for summary judgment. Goettel, ¶ 8. Progressive paid Goettel the policy limits of its uninsured motorist coverage and was also dismissed from the lawsuit. Goettel, ¶ 9.
¶22 Goettel appealed the district court’s summary judgment ruling in favor of Ballard’s estate, arguing that the court prematurely terminated the litigation and prevented Goettel from establishing the measure of his damages at trial. He claimed that he intended to establish that his damages were in excess of the policy limits paid by Casually and that because Casualty had failed to pay the policy limits in a timely manner, it had “waived” those limits and was hable for the excess damages. Goettel, ¶¶ 13-14. Goettel acknowledged that he could not collect any portion of the established excess damages from the Ballard estate because he had not complied with the one-year filing limit in § 72-3-803(l)(a), MCA, but he argued that § 72-3-803, MCA, does not shield insurers against excess claims brought under the Montana Unfair Trade Practices Act. We agreed, citing Gibson v. Western Fire. Ins. Co., 210 Mont. 267, 682 P.2d 725 (1984), that
an insurer which in bad faith fails to settle a bona fide third party liability claim against its insured, within policy coverage limits, takes the risk of a judgment by the trier of fact in excess of the coverage limits. The effect of such bad faith is to open the policy coverage limits to the extent of the trial result.
Goettel, ¶ 19.
¶23 We concluded that “the limits of the insurance protection only” referenced in § 72-3-803(3)(b), MCA, may be waived by an insurer under certain circumstances, rendering the insurer liable for an excess judgment, and that Casualty’s eventual payment of the policy limits did not necessarily negate the insurer’s liability for an excess judgment. We ordered the district court to allow the action to proceed and to allow Goettel to establish the amounts of his damages. Goettel, ¶ 27.
¶24 The Estate challenges the District Court’s reliance on Goettel. While there are similarities between these two cases, Goettel is clearly distinguishable in that Goettel had named the liability insurance carrier, Casualty, as a party defendant in his lawsuit, whereas Locke did not file suit against Safeco. However, insofar as Goettel addresses the limits of recovery available against an estate by a claimant who has failed to comply with the one-year filing limit set forth in § 72-3-803(l)(a), MCA, it is instructive.
¶25 In Goettel, we concurred with Goettel’s concession that because he had failed to present a claim against Ballard’s estate within one year of Ballard’s death, he could recover against the estate only to the extent that it was protected by insurance. Goettel, ¶ 17. Under the applicable statutes, the same result is compelled here. Notwithstanding the amount of the jury’s award, Locke is precluded from recovering against the Estate any amount in excess of the limits of the liability policy in the sum of $100,000. However, in light of the possibility that Locke will pursue recovery of the amount of the jury’s award in excess of $100,000 against Safeco, and without comment on the merits of that possible claim, we decline to set aside the jury’s verdict.
¶26 The Estate also argues on appeal that the District Court abused its discretion when it refused to reduce Locke’s $100,000 liability policy recovery against the Estate by the amount of advance medical expense payments Safeco paid to Locke in the sum of $16,306.40. Locke counters that because the jury’s award did not apportion any sums to past or future medical expenses, there should be no offset. We disagree. The full limits of liability under the policy were $100,000, and there was no separate coverage available for medical payments. Therefore, the District Court abused its discretion in refusing to reduce the Estate’s $100,000 liability to Locke by the amount of the advance payments.
¶27 Accordingly, we vacate the District Court’s April 30, 2014 order and remand. Upon remand, the court is directed to issue a new order which will: (1) uphold the jury award of $400,000 and the courfs award of costs; (2) expressly provide that Locke is precluded from executing against the Estate for any amount in excess of the $100,000 in insurance proceeds and that the Estate is relieved from any judgment in excess of $100,000; (3) offset the $100,000 insurance limits by the amount of advanced medical payments Locke has received; and (4) preclude Locke from collecting any additional costs, fees, and interest over the $100,000 policy limit from the Estate.
¶28 Did the District Court abuse its discretion when it made findings and conclusions that effectively binds Safeco to a judgment in a case in which Safeco was not a named party, was not represented by counsel, and did not appear ?
¶29 As noted above, Safeco was not a named party in the action of Locke v. Estate of Davis. Nonetheless, in its order denying the Estate’s post-trial motions, the District Court concluded that Safeco had refused to settle Locke’s claims against the Estate within policy limits and had “forced” her to trial. The court also concluded that even after Locke obtained a jury verdict in the sum of $400,000, Safeco continued to refuse to pay the remaining policy limits. The court concluded that Safeco had opened up the policy limits when it had rejected Locke’s offer of settlement, and that, under § 72-3-803(3)(b), MCA, the “limits of the insurance protection only” language of the statute may be waived and require imposition of liability against the insurer for an excess judgment. The court observed that Safeco had demanded that Locke file a notice of satisfaction of judgment for an amount less than the amount of the judgment that she rightfully obtained, before it would pay her the remaining balance of the policy limits. Given these circumstances, the court refused to alter or amend the judgment.
¶30 After the Estate filed its notice of appeal, Safeco sought intervention in the appeal, arguing that the District Court’s determination that it had waived its policy limits and could be liable for the excess verdict against the Estate was improper. Safeco argued that it should not be bound by a District Court order and judgment assessing its conduct when it was not a party to the proceedings below and was not represented by counsel. Locke objected to the motion to intervene, but the Estate did not. We granted Safeco’s motion.
¶31 Safeco maintains in its brief on appeal that the District Court erroneously made determinations about Safeco’s ostensible misconduct during the underlying proceeding that could subject the insurer to excess judgment liability. Safeco argues that the contents of the court’s April Order are not binding on it because the District Court did not have jurisdiction to enter judgment against it as a non-party. It asserts that to the extent the order may be construed as adjudicating an issue that was not before the court, the order should be vacated.
¶32 We agree with Safeco. Safeco was not a party to the trial proceeding. There is accordingly no record establishing the grounds for Safeco’s refusal to settle within policy limits, establishing that it engaged in misconduct constituting bad faith, or supporting a determination that Safeco has waived its policy limits by virtue of its conduct. The District Court therefore erred in malting these findings against Safeco. Accordingly, upon remand, the District Court’s revised order shall not include any findings or conclusions regarding Safeco’s conduct.
CONCLUSION
¶33 For the foregoing reasons, we vacate the District Court’s April 30, 2014 Order and remand to the District Court for issuance of an amended order in accordance with this Opinion.
CHIEF JUSTICE McGRATH, JUSTICES BAKER, RICE and McKINNON concur.
This interpretation and application of § 72-3-803(3Xb), MCA, is consistent with that of other jurisdictions with similarly-worded statutes. See Corlett v. Smith, 763 P.2d 1172, ¶¶ 10-11 (N.M. App. 1988), and Harden v. Allstate Ins. Co., 883 F. Supp. 963, 974-75 (D. Del. 1995).
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 F.H. Stoltze Land & Lumber Company and Maxum Specialty Insurance Group (collectively, “Stoltze”) filed a complaint against American States Insurance Company (ASI), seeking an order that ASI must defend and indemnify Stoltze against a lawsuit brought by Whitney and Anna Shanks (collectively, “Shanks”). The Eleventh Judicial District Court, Flathead County, entered summary judgment in ASI’s favor. Stoltze and Shanks appeal. The issue on appeal is whether the District Court correctly determined that ASI’s insurance policy with Les Schlegel Enterprises (“Schlegel”) does not require ASI to defend and indemnify Stoltze in an action in which Schlegel could not be held liable. We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 In 2003, Schlegel and Stoltze contracted for Schlegel to log Stoltze’s property. The logging contract contains a provision in which Schlegel agreed to procure liability insurance indemnifying Stoltze from liability for any loss or injury arising from the logging operations. Schlegel also agreed that indemnification “shall not be limited ... by immunity of suit of [Schlegel], [Schlegel] having waived such immunity as a defense against [Stoltze].” Schlegel in turn obtained liability insurance from ASI. The insurance policy (Policy) ran between January 20, 2004, and January 20, 2005. It lists Schlegel as the only named insured. The liability plus endorsement section of the Policy extends coverage to “any person or organization ... for whom [Schlegel is] required by written contract, agreement or permit to provide insurance” to the extent that Schlegel is held liable due to its “ongoing operations for that Insured, whether the work is performed by [Schlegel] or for [Schlegel].” Another clause modifies this extension of coverage, stating, “No Coverage will be provided if, in the absence of this endorsement, no liability would be imposed by law on [Schlegel]. Coverage shall be limited to the extent of [Schlegel’s] negligence or fault according to the applicable principles of comparative fault.”
¶3 Shanks, a worker for Schlegel, injured himself during logging operations on Stoltze’s property in February 2004. Although Schlegel covered Shanks for workers’ compensation benefits, Shanks filed a personal iqjury lawsuit against both Schlegel and Stoltze. Stoltze tendered defense and indemnity of Shanks’s suit to ASI. ASI accepted the tender, stating that it was affording a defense to Stoltze under the Policy with Schlegel, but reserved the right to withdraw the defense if it determined that Stoltze was not covered under the Policy.
¶4 In 2010, Schlegel moved to dismiss the case against it, arguing that the Montana Workers’ Compensation Act’s exclusive remedy provision, § 39-71-411, MCA, rendered it immune to Shanks’s suit. The district court in that case granted Schlegel’s motion. After Schlegel’s dismissal, ASI withdrew its defense of Stoltze, stating in a letter to Stoltze that the Policy covered Stoltze only to the extent that Schlegel was hable, and that the court determined in its dismissal order that Schlegel was not hable.
¶5 In November 2012, Stoltze filed a complaint against ASI, seeking declaratory judgment that ASI is required to defend and indemnify Stoltze against Shanks’s suit. In 2013, the parties filed cross-motions for summary judgment, and, in 2014, the District Court entered summary judgment in favor of ASI. The District Court determined that, under the terms of the Pohcy, ASI covers Stoltze to the extent that Schlegel is hable in the underlying action. Because the court in the underlying action concluded that Schlegel was immune and not liable, the District Comí; further concluded that ASI has no duty to defend or indemnify Stoltze. Stoltze and Shanks appeal.
STANDARDS OF REVIEW
¶6 We review an entry of summary judgment de novo. Albert v. City of Billings, 2012 MT 159, ¶ 15, 365 Mont. 454, 282 P.3d 704. Summary judgment is appropriate when the moving party demonstrates the absence of a genuine issue of material fact and entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Albert, ¶ 15. We review the interpretation of an insurance policy for correctness. Plum. Creek Mktg., Inc. v. Am. Econ. Ins. Co., 2009 MT 264, ¶ 31, 352 Mont. 56, 214 P.3d 1238.
DISCUSSION
¶7 An insurer’s duty to defend or indemnify a party depends on whether an insurance policy establishes such a duty. Travelers Cas. & Sur. Co. v. Ribi Immunochem Research, Inc., 2005 MT 50, ¶ 40, 326 Mont. 174, 108 P.3d 469. In arguing that ASI has such a duty, the only insurance policy Stoltze and Shanks identify is the policy between Schlegel and ASI. Like any other contract, we construe an insurance policy in an effort to give effect to the mutual intent of the contracting parties as reflected in the contract’s terms. Sections 28-3-301, -401, MCA. “An insurer must defend unless there is an unequivocal demonstration that the claim against the insured does not fall under the policy’s coverage.” Famers Union Mut. Ins. Co. v. Rumph, 2007 MT 249, ¶ 14, 339 Mont. 251, 170 P.3d 934; see Scentry Biologicals Inc. v. Mid-Continent Cas. Co., 2014 MT 39, ¶ 44, 374 Mont. 18, 319 P.3d 1260.
¶8 Stoltze acknowledges that it is not a named insured in the Policy but argues that, because the logging contract is an insured contract, the liability plus endorsement section of the Policy extends coverage to Stoltze. As mentioned, however, the liability plus endorsement section includes a limiting clause, stating, “No Coverage will be provided if, in the absence of this endorsement, no liability would be imposed by law on [Schlegel]. Coverage shall be limited to the extent of [Schlegel’s] negligence or fault according to the applicable principles of comparative fault.”
¶9 In Plum Creek, we examined identical limiting clause language in a liability plus endorsement section of a polity. As in this case, in Plum Creek, two parties (Plum Creek and Garage Doors) entered a contract, with one party (Garage Doors) agreeing to indemnify the other (Plum Creek). Plum Creek, ¶ 2. Garage Doors obtained liability insurance that included a liability plus endorsement section and a clause stating, as here, “No coverage will be provided if, in the absence of this endorsement, no liability would be imposed by law on you. Coverage shall be limited to the extent of your negligence or fault according to the applicable principles of comparative fault.” When a Garage Doors employee was injured on the job, he sued Plum Creek. Plum Creek, ¶ 6. Garage Doors’s insurer, however, refused to defend Plum Creek, pointing to the limiting clause in the liability plus endorsement section. Plum Creek, ¶ 8. Pinning our analysis to the terms of the limiting clause, we concluded that Garage Doors “could not be held liable in this case” because the employee’s “complaint alleged negligence against Plum Creek, not Garage Doors.” Therefore, it was “unequivocally clear that [the insurer] was not required to defend or indemnify Plum Creek.” Plum Creek, ¶ 32 (emphasis in original).
¶10 ASI argues that Schlegel is like Garage Doors in Plum Creek, in that Schlegel cannot be held liable in the underlying personal injury case. As noted, a district court determined that Schlegel is immune and dismissed it from the underlying action. The Policy extends coverage to additional insured parties that enter into contracts with Schlegel and incur liability due to Schlegel’s negligence, but only if Schlegel also is subject to liability. The Policy states, “No coverage will be provided” to a third party if “no liability would be imposed by law” on Schlegel. The limiting language in the Policy shows that determining whether the Policy covers an additional insured turns not on why, but on whether, the named insured would be liable in the absence of the endorsement. If no liability can be imposed by law on Schlegel, then no coverage is provided to Stoltze.
¶11 Stoltze argues that the second sentence in the limiting clause — “Coverage shall be limited to the extent of your negligence or fault according to the applicable principles of comparative fault” — renders the limiting clause ambiguous about whether coverage depends on liability or on negligence and fault, and that the clause therefore should be interpreted against ASI. See Leibrand v. Nat’l Farmers Union Prop. & Cas. Co., 272 Mont. 1, 6, 898 P.2d 1220, 1223 (1995) (“Ambiguities in an insurance policy are construed against the insurer and exclusions or words of limitation in a policy must be strictly construed against the insurer.”). Stoltze argues that the only way to reconcile the two sentences in the clause is to conclude that the second sentence applies to employees of Schlegel. We conclude that the plain language of the Policy does not require that construction. The first sentence of the clause states that ASI will not cover an additional insured in situations in which the named insured cannot be held liable. The second sentence states that, in situations in which the named insured can be held liable, ASl’s coverage of an additional insured is limited to the extent of the named insured’s proportional negligence or fault.
¶12 Stoltze cites two cases in which the United States District Court for the District of Oregon concluded that the same limiting language was ambiguous, see Clarendon Nat’l Ins. Co. v. Am. States Ins. Co., 688 F. Supp. 2d 1186, 1191 (2010); Richardson v. Howard S. Wright Constr. Co., No. CV-05-1419-ST, 2007 U.S. Dist. LEXIS 37011, at *23-25, but we are not persuaded by the analysis of the policy language in these cases. We follow our reasoning in Plum Creek that the “terms of the Policy and [endorsement taken together are clear and unambiguous.” Plum Creek, ¶ 32.
¶13 Stoltze next argues that, even if the Policy states that ASI covers third parties only if Schlegel is liable, ASI must cover Stoltze in this case because Schlegel is liable. Stoltze argues that Schlegel is liable because, in the contract between the two, Schlegel agreed that its indemnification of Stoltze “shall not be limited... by immunity of suit of [Schlegel], [Schlegel] having waived such immunity as a defense against [Stoltze].” An insurer’s duty to defend or indemnify, however, depends on the four comers of the invoked insurance policy — not on an agreement between an insured and a third party. Ribi Immunochem Research, ¶ 40; Plum Creek, ¶ 31. Further, Schlegel was dismissed from the underlying case on the basis of § 39-71-411, MCA. To the extent that Stoltze now argues that Schlegel could be held liable in the underlying suit on the basis of the logging contract, the order dismissing the case against Schlegel is not before the Court on appeal.
¶14 Shanks argues that Schlegel remains liable because one of the remaining claims against Stoltze concerns whether Stoltze delegated an inherently dangerous and non-delegable operation to Schlegel and thus is vicariously liable for Schlegel’s negligence. But Schlegel cannot be held liable under this claim — Schlegel has been dismissed from the underlying action due to immunity. Stoltze’s liability for Schlegel’s actions is not the same as Schlegel’s liability, which is what the Policy requires for coverage to extend to Stoltze in this case. Stoltze’s liability for its own acts or omissions also is not within the scope of Schlegel’s policy with ASI.
¶15 Shanks further argues the question whether § 39-71-411, MCA, precludes Stoltze from being covered as an additional insured. But, given our determination that Stoltze is not an additional insured under the terms of the Policy, we do not reach this argument. We conclude that, under the plain terms of the Policy, Stoltze is not covered by ASI unless Schlegel is liable. Schlegel is not hable. Therefore, Stoltze is not covered.
CONCLUSION
¶16 We affirm.
CHIEF JUSTICE McGRATH, JUSTICES McKINNON,SHEAand RICE concur.
|
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court.
¶1 Bobby Bilderback appeals from several orders of the District Court. We affirm.
¶2 We restate Bilderback’s issues for review as follows:
¶3 1. Whether the District Court in its order of December 3, 2013, properly denied Bilderback’s motion to suppress the evidence seized pursuant to the search warrant executed on his Hummer vehicle.
¶4 2. Whether the District Court in its order of August 25, 2014, properly denied Bilderback’s motion to dismiss the forfeiture proceeding for lack of personal service of the notice of the forfeiture hearing.
¶5 3. Whether the District Court in its order of December 2, 2013, properly denied Bilderback’s motion for summary judgment.
BACKGROUND
¶6 In March 2013 law enforcement officers in Washington State contacted the Missoula Police asking for assistance in locating Bobby Bilderback, who was wanted in Washington in connection with a homicide case. Washington officers supplied a Missoula address for Bilderback and a description of his Hummer vehicle which had Montana license plates. Missoula Police found Bilderback at the residence in Missoula, along with the Hummer. They took Bilderback into custody and seized the Hummer vehicle. Missoula Police Detective Curtis applied for and received a search warrant for the Hummer from the Montana Fourth Judicial District Court. Curtis supplied his own affidavit in support of the warrant, incorporating an affidavit of Detective Brown of the Whitman County Washington Sheriffs Office. The contents of the Brown affidavit are discussed more thoroughly below.
¶7 Missoula officers executed the search warrant for the Hummer. They found a locked metal tool box that contained over $36,000in cash. They also found a thermos bottle in the engine compartment attached by a magnet. The thermos contained a baggie with methamphetamine residue in it.
¶8 On May 9, 2013, Mark Muir, then the Missoula Chief of Police, instituted this proceeding pursuant to § 44-12-102, MCA, seeking forfeiture of the Hummer, the cash and other items found during the search. The forfeiture petition and summons were served on Bilderback. He appeared through counsel and filed several motions in the forfeiture proceeding, including a motion to suppress the results of the search warrant. The District Court denied the motion and set the forfeiture matter for hearing on May 21,2014. Neither Bilderback nor his attorney appeared at the hearing. The District Court received evidence from the State in support of forfeiture and ordered forfeiture of the Hummer and the cash. Bilderback appeals.
STANDARDS OF REVIEW
¶9 This Court reviews a district court’s ruling on a motion to suppress evidence to determine whether the court’s findings of fact are clearly erroneous and whether the court’s interpretation and application of the law are correct. State v. Minett, 2014 MT 225, ¶ 7, 376 Mont. 260, 332 P.3d 235. This Court reviews a district court’s decision on a motion to dismiss de novo, to determine whether it is correct. Milky Whey, Inc. v. Dairy Partners, 2015 MT 18, ¶ 7, 378 Mont. 75, 342 P.3d 13. This Court reviews a district court’s ruling on summary judgment de novo, applying the same criteria under M. R. Civ. P. 56 as the district court. Bennet v. Hill, 2015 MT 30, ¶ 9, 378 Mont. 141, 342 P.3d 691.
DISCUSSION
¶10 Issue 1: Whether the District Court in its order of December 3, 2013, properly denied Bilderback’s motion to suppress the evidence seized pursuant to the search warrant executed on his Hummer vehicle.
¶11 The Montana Constitution requires that:
No warrant to search any place, or seize any person or thing shall issue without describing the place to be searched or the thing to be seized, or without probable cause, supported by oath or affirmation reduced to writing.
Mont. Const. Art. II, § 11. This is consistent with the requirements of the Fourth Amendment to the United States Constitution. State v. Bar-Jonah, 2004 MT 344, ¶ 63, 324 Mont. 278, 102 P.3d 1229. Montana law specifies the requirements for issuing a search warrant:
A judge shall issue a search warrant to a person upon application, in writing or by telephone, made under oath or affirmation, that:
(1) states facts sufficient to support probable cause to believe that an offense has been committed;
(2) states facts sufficient to support probable cause to believe that evidence, contraband, or persons connected with the offense may be found;
(3) particularly describes the place, object, or persons to be searched; and
(4) particularly describes who or what is to be seized.
Section 46-5-221, MCA. Officers executing a warrant may search for and seize evidence, contraband, or persons. Section 46-5-224, MCA. The warrant must be specific enough to reasonably identify the things to be seized, and to prevent general exploratory searches. The description of items to be seized needs to be reasonably specific but not elaborately detailed. Bar-Jonah, ¶ 64. The fact that evidence may be used to support another charge does not require suppression. Bar-Jonah, ¶ 64. The sufficiency of a warrant is considered on a case-by-case basis to determine whether alleged defects affect the substantial rights of the accused. State v. West, 1998 MT 282, ¶ 8,291 Mont. 435, 968 P.2d 289.
¶12 This Court assesses the totality of the circumstances to determine whether a search warrant is based upon probable cause. In that context, the official issuing the warrant must only determine that there was a probability of criminal activity. State v. Barnaby, 2006 MT 203, ¶¶ 29-30, 333 Mont. 220, 142 P.3d 809. The official issuing the warrant must make a “practical, common sense determination, given all the evidence contained in the application for a search warrant, whether a fair probability exists that contraband or evidence of a crime will be found in a particular place.” State v. Zito, 2006 MT 211, ¶ 7, 333 Mont. 312, 143 P.3d 108. Probable cause must be determined from within the four corners of the application for a warrant, and the judicial officer’s determination that probable cause exists is entitled to “great deference and every reasonable inference possible [must] be drawn to support that determination of probable cause.” State v. Tucker, 2008 MT 273, ¶ 17, 345 Mont. 237, 190 P.3d 1080.
¶13 When the information supporting the application for a search warrant comes from an informant, the first inquiry is whether the informant was anonymous. If so, then the information must be corroborated. Tucker, ¶ 20. If an informant is identified and is motivated by “good citizenship” then the information is deemed reliable if it demonstrates a sufficient degree of knowledge of the circumstances under which the information was obtained. State v. Palmer, 2003 MT 129, ¶ 18, 316 Mont. 46, 68 P.3d 809.
¶14 Bilderback moved to suppress the results of the search warrant issued for his Hummer vehicle and the District Court denied that motion in its order of December 3, 2013. Bilderback raises several issues on appeal attacking the validity of the search warrant. He contends that the application for the search warrant was deficient in that it relied upon information from an informant named Griffith. He contends that the basis for Griffith’s knowledge about a “lock box” in the Hummer was not established, that his tip was not corroborated, and that his information did not “establish” that evidence would be found in the Hummer.
¶15 The application for the search warrant was supported by an affidavit from Detective Curtis of the Missoula Police, which incorporated a separate affidavit by Deputy Sheriff Brown of the Whitman County Washington Sheriffs Office. Brown’s affidavit recounted in detail the Washington investigation of Bilderback’s involvement in the drug-overdose death of a minor in Bilderback’s house in Washington. The Brown affidavit listed several individuals who provided information to the investigation, including Bradley Griffith. Griffith was a long-time resident of Spokane, Washington; a “close friend” of Bilderback for four years; and had stayed at Bilderback’s house where the overdose occurred. He originally contacted law enforcement himself, because of his concern for the safely of the minor, who was “missing” at that point, and for his own safely “due to the people involved.” Griffith had no criminal history and provided law enforcement with his name, address, phone number, and social security number. Deputy Brown affirmed that Griffith’s knowledge of Bilderback and the residence were consistent with information from other sources. Brown also described Bilderback’s Hummer vehicle, observed at his residence in Washington, and provided the Montana license plate, the VIN number, and the registered owners — Bilderback and his mother Marie Felton.
¶16 Griffith reported to Washington officers that Bilderback was “heavily involved in the distribution of methamphetamine and cocaine from Las Vegas to Montana.” Griffith also reported that Bilderback asked him to come to his house after the minor overdosed, and that Bilderback described the death as an overdose of methamphetamine. Griffith also reported Bilderback’s description of using a safe that Griffith had previously seen in Bilderback’s house to dispose of the body. Griffith described his observation of Bilderback and another individual loading the safe containing the body into a vehicle and leaving Bilderback’s house. Griffith reported that Bilderback had given methamphetamine to the other person for help in disposing of the body of the minor. Griffith reported that Bilderback had borrowed a “lock box” from him and that it could be found in the Hummer vehicle.
¶17 The Brown affidavit also recounted a meeting between Bilderback and Washington law enforcement officers where Bilderback “admitted to investigators that he is involved in the illegal drug trafficking business, specifically methamphetamine.” Bilderback showed the officers how he stored the drugs in thermos bottles, and said that on the night the minor disappeared, a thermos of methamphetamine and over $50,000 in cash also disappeared from his garage. The Washington officers inferred from what Bilderback said that he used thermos bottles to hide drugs inside of vehicles.
¶18 It is clear that Griffith was a named informant who disclosed not only his name but also his address, phone number and social security number. His contact with law enforcement was motivated by his concern for the missing minor and for his own safety. He provided detailed information about how he knew Bilderback, about what he observed, and about what Bilderback confessed to him. Griffith’s information about Bilderback’s involvement in drug trafficking was confirmed by Bilderback’s own admission to law enforcement. Therefore, it is clear that Griffith was a reliable informant whose information could form part of the basis for the search warrant application. Zito, ¶ 10; Palmer, ¶ 18. While Bilderback argues that Griffith’s information about the “lockbox” should have either contained more detail or had independent corroboration, the informant reliability factors discussed above render that unnecessary.
¶19 Bilderback contends that the search warrant for his Hummer vehicle that was issued in Montana was impermissibly based upon an offense that happened solely in Washington State — the drug overdose of the minor. We do not reach this issue because while most of Deputy Brown’s lengthy affidavit concerns the investigation of the overdose death in Washington, it also provided concrete information about Bilderback’s acknowledged involvement in drug trafficking, about his trafficking into Montana, and about his ownership of a Hummer vehicle registered in Montana. When the police in Missoula located Bilderback, the Hummer was with him at the residence. This information was sufficient to support a search of the Hummer in Montana based upon probable cause to believe that it would contain cash, drugs or other evidence of Bilderback’s drug trafficking.
¶20 We have upheld the issuance of a warrant where the application did not “explicitly name the offense, but the facts stated clearly indicated that the suspected offense was possession of dangerous drugs.” State v. Kelly, 205 Mont. 417, 430-431, 668 P.2d 1032, 1040 (1983). Here there was substantial information, reflected in the application for the warrant, about Bilderback’s involvement in drugs, in the transportation of drugs into Montana, and in the use of vehicles to both secrete and.transport drugs. The application sought, and the warrant authorized, a search for illegal drugs, drug paraphernalia, proceeds of drug sales, and other evidence relating to drug activity contrary to Montana law. When officers searched the Hummer they found a locked toolbox containing cash and a thermos bottle secreted in the engine compartment containing drug residue.
¶21 Bilderback contends that the search warrant for the Hummer was an impermissible “general” warrant, and particularly that it failed to specifically describe the “lockbox” noted by informant Griffith. Griffith’s statements to law enforcement referenced that Bilderback asked to borrow a “lockbox” from him, which he thought could be in the Hummer. Considering as we must the totality of the circumstances here, Griffith’s information supports a probability that Bilderback was interested in locked containers which reasonably could be used to secrete either drugs or the cash proceeds of drug transactions. Whether the search found the specific “lockbox” that Griffith mentioned is not pertinent. The warrant itself authorized the search of “the contents of any safes or secured/locked containers.” This was sufficiently specific to allow the officers in Missoula to conduct a reasonable and focused search of the Hummer.
¶22 People who smuggle drugs or deal drugs often secrete them in vehicles. The locking toolbox was in fact a “lockbox” that reasonably could have contained cash, drugs, or other evidence of drug trafficking. It was clearly covered by the warrant and officers were authorized to open it.
¶23 Upon review of the facts and Bilderback’s arguments, we determine that the warrant was properly issued and properly executed.
¶24 Issue 2. Whether the District Court in its order of August25,2014, properly denied Bilderback’s motion to dismiss the forfeiture proceeding for lack of personal service of the notice of the forfeiture hearing.
¶25 After the seizure and search of the Hummer vehicle the Missoula police instituted the instant forfeiture proceeding in May 2013. The petition for forfeiture named Bilderback as the respondent and a summons and copy of the petition were served upon him. Bilderback appeared through counsel and filed an answer to the petition. He was represented by counsel throughout the forfeiture proceedings. On June 5,2013, the District Court set a hearing on the forfeiture petition but later continued the hearing at Bilderback’s request. The hearing was subsequently continued and the date re-set a number of times, often at Bilderback’s request. In April 2014 Bilderback moved that he be allowed to participate in the hearing by telephone because he was incarcerated in Washington and could not attend the hearing personally. The District Court granted the motion.
¶26 Neither Bilderback nor his attorney appeared at the May 21,2014 forfeiture hearing. The District Court had court staff call Bilderback’s attorney to inquire whether either would attend the hearing, and Bilderback’s attorney responded to the District Court’s inquiry: “per Bilderback, no.” Bilderback first contended that he was entitled to personal notice of the hearing date by motion filed June 30, 2014. Bilderback does not contend that he was not aware of the hearing date, or that his attorney lacked notice of the hearing. Rather, he contends that he was entitled to separate personal notice under § 44-12-203(3), MCA, and that in the absence of such notice the entire forfeiture proceeding was void.
¶27 Section 44-12-203(3), MCA, provides that:
If a verified answer is filed within 20 days, the forfeiture proceedings must be set for hearing without a jury no sooner than 60 days after the answer is filed. Notice of the hearing must be given in the manner provided for service of the petition and summons.
Section 44-12-201, MCA, provides that service of the petition and summons is made “as provided in the Montana Rules of Civil Procedure.” Drug-related forfeiture proceedings are civil actions in Montana, and the rules of civil procedure apply. Magone v. Aul, 269 Mont. 281, 284, 887 P.2d 1235, 1237 (1994). In a civil proceeding, after the initial service of summons, when a party is represented by an attorney, service of all matters must “in all cases” be served “upon his attorney instead of the party.” Section 25-3-402, MCA; Rule 5(b)(1), M. R. Civ. P.
¶28 We must reconcile the apparent conflict between the requirement in the forfeiture statutes that notice of the hearing be personally served, with the requirement in the Rules of Civil Procedure that after service of summons all matters must be served upon the party’s attorney. We do so by determining that § 44-12-203(3), MCA, requiring service of the notice of hearing “in the manner provided for service of the petition and summons” applies when the respondent does not appear through counsel, and that Rule 5(b)( 1), M. R. Civ. P. and § 25-3-402, MCA, requiring service upon the parly’s attorney apply when the respondent appears through counsel. Bilderback received personal service of the petition and summons, effecting jurisdiction of the District Court to determine his interest in the seized property as required by Rule 4(b)(2), M. R. Civ. P. Thereafter his attorney received notice of each of the various hearing dates.
¶29 There is no issue that Bilderback’s attorney received proper and timely notice of the hearing and no further notice was required.
¶30 Issue 3. Whether the District Court in its order of December 2, 2013, properly denied Bilderback’s motion for summary judgment.
¶31 Bilderback moved for summary judgment, contending that his mother Marie Felton was an innocent owner of the seized Hummer under § 44-12-102, MCA, and therefore entitled to possession of it. He also contended that there was no evidence that the Hummer was used in a drug offense. The motion was supported by affidavits, including an affidavit from Felton that she was a registered owner of the Hummer, and that she did not consent to or know about any use if it for any illegal purpose. Bilderback moved for summary judgment in his favor on “all claims” in the forfeiture petition.
¶32 Muir presented affidavits in support of the contention that Felton was a sham owner who was not entitled to assert the innocent owner defense, and that the Hummer had been used in drug offenses. The District Court considered the materials presented in support of and in opposition to the motion for summaiy judgment, rejecting certain portions of Muir’s evidence that Bilderback contended was hearsay.
¶33 The District Court concluded that the materials demonstrated that there were genuine issues of material fact as to the nature and extent of Felton’s ownership interest in the Hummer, and as to whether the Hummer had been used in drug transactions. Summary judgment may not be granted when there are genuine issues of material fact. Bennett, ¶¶ 9,17. The District Court properly considered the evidence presented by the parties and properly determined that summary judgment was not warranted.
¶34 Having considered the record and the arguments presented by Bilderback, we affirm the District Court.
JUSTICES COTTER, BAKER, SHEA and McKINNON concur.
Bilderback was convicted of the homicide offense in Washington and sentenced to prison. His mother, Marie Felton, also claims an interest in the Hummer. We consider her claims in a separate appeal, DA 14-0687. Bilderback was not charged with an offense in Montana.
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CHIEF JUSTICE McGRATH
delivered the Opinion of the Court.
¶1 Catherine E.W. Hansen Trust appeals from the judgment of the Third Judicial District, Anaconda-Deer Lodge County, granting summary judgment in favor of Theodora Tarbet, Timshel Tarbet, and Tarbet Schrier, LLC. Hansen Trust also appeals from the District Court’s order directing payment of the tax lien and entry of final judgment, as well as the order denying Hansen Trust’s post-judgment motions.
¶2 We affirm.
ISSUES
¶3 Issue One: Whether the District Court erred when it entered summary judgment and declared the tax deed void.
¶4 Issue Two: Whether the District Court erred when it directed payment of Hansen Trust’s tax lien.
¶5 Issue Three: Whether the District Court erred when it denied Hansen Trust’s post-judgment motions.
FACTUAL AND PROCEDURAL BACKGROUND
¶6 In March 2007, Dale Tarbet sold two lots located in Anaconda, Montana, to Michael Ward. Ward executed a promissory note in favor of Dale Tarbet and secured the transaction using a Montana Trust Indenture. Under the Trust Indenture, Ward was the designated owner and taxpayer, Tarbet was the beneficiary, and Montana Abstract and Title Company served as the trustee of the properly. The Trust Indenture was recorded on April 17,2007. An addendum to the Trust Indenture substituted Tarbet Schrier, LLC, for Dale Tarbet as beneficiary in the Trust Indenture. Appellees Theodora Tarbet and Timshel Tarbet are members of Tarbet Schrier, LLC (collectively “Tarbets”).
¶7 Michael Ward failed to pay property taxes in 2008, 2009, and 2010. Anaconda-Deer Lodge County placed a tax lien on the property for the delinquent taxes. On September 14,2011, the Anaconda-Deer Lodge County Treasurer assigned the tax lien to the Catherine E.W. Hansen Trust (“Hansen Trust”). Over a year later, on November 30, 2012, the County Treasurer issued a tax deed to Hansen Trust on the property, which was recorded the same day.
¶8 In February 2013, Hansen Trust filed a complaint to quiet title to the tax deed. Tarbets answered and asserted that the Trust had failed to provide the notice required under Montana law.
¶9 In June 2013, Tarbets filed a motion for summary judgment. They argued that the tax deed was void due to Hansen Trust’s failure to provide written notice of the issuance of the tax deed to the trustee, Montana Abstract and Title Company. The District Court denied the motion, concluding that there was uncertainty regarding a material fact of whether a title guarantee existed for the property and whether it listed Montana Title and Abstract Company.
¶10 On August 21,2013, Hansen Trust filed a motion requesting that Tarbets deposit money with the District Court pursuant to § 15-18-411, MCA. Hansen Trust sought a deposit of $20,859.24 to cover taxes, interest, and penalties, as well as the cost of publication, the court fifing fee, property insurance, trust administrative expenses, and attorney fees. The District Court partially granted the motion, holding that Hansen Trust was entitled to the money necessary to cover taxes, interest, penalties, and costs, but not filing fees, publication, property insurance, trust administrative expenses, or attorney fees. The District Court ordered Tarbets to deposit $6,783.91 with the court and set a show cause hearing. Tarbets agreed to deposit the amount and moved to vacate the show cause hearing. Hansen did not oppose the motion to vacate.
¶11 In November 2013, Hansen Trust filed a motion for summary judgment. Tarbets filed a cross-motion for summary judgment, requesting that the District Court declare the tax deed void. At this point in the case, discovexy established that Hansen Trust had not obtained a property title guarantee for the two lots. It was also undisputed that Hansen Trust did not notify Montana Abstract and Title Company of the tax lien. After a hearing on the motions, the District Court granted Tarbets’ cross-motion for summary judgment. The District Court concluded that the purchaser of a tax lien must obtain a property title guarantee and provide notice to all parties, except utilities, listed in the title guarantee. The Court found that Hansen Trust had not obtained the required property title guarantee and declared the tax deed void as a matter of law.
¶12 After the District Court granted Tarbets’ summary judgment, the only remaining issue was the redemption amount of Hansen Trust’s tax lien. On April 21, 2014, Tarbets filed a motion for an order directing payment of the tax lien and entry of final judgment. In their motion, Tarbets requested that Hansen Trust receive the $6,783.91 deposited with the court along with the accrued interest on the deposit, plus any additional taxes paid by Hansen Trust since the deposit. The District Court granted the motion and Tarbets mailed Hansen Trust a check for $1,942.63, representing $465.43 in accrued interest on the deposit and $1,477.20 in additional taxes. The accrued interest was calculated from the date of the deposit, October 21, 2013. In total, Hansen Trust received $8,726.54. On June 27,2014, the District Court entered a final judgment declaring Hansen Trust’s tax deed void, establishing the amount for redemption of the tax lien, and directing that a certificate of redemption be recorded upon Hansen Trust’s receipt of the redemption amount.
¶13 After the District Court entered a final judgment, Hansen Trust filed three post-judgment motions. In a September 2014 order, the District Court denied the first two motions, concluding the motions constituted “efforts to submit information, theories, or arguments that were not, but could have been, offered during the pendency of the motion on which the District Court had previously ruled.”
¶14 After the District Court denied those motions, Hansen Trust filed a notice of appeal. Hansen Trust thereafter submitted the third post-judgment motion, arguing that the District Court could resume jurisdiction pursuant to M. R. Civ. P. 62.1(a)(3) for the purpose of considering Hansen Trust’s constitutional challenge to § 15-18-212, MCA. The District Court again denied the motion and “declined to substantively address Plaintiffs constitutional arguments raised for the first time post judgment.”
STANDARD OF REVIEW
¶15 We review a grant of summary judgment de novo. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186 (citations omitted). “Where there is a cross-motion for summary judgment, we review a district court’s decision to determine whether its conclusions were correct.” Baxter v. State, 2009 MT 449, ¶ 8, 354 Mont. 234, 224 P.3d 1211 (citations omitted). Summary judgment is proper when the record shows no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Lorang, ¶ 37; M. R. Civ. P. 56(c).
¶16 The moving party must first establish the “complete absence of genuine issues of material fact.” Lorang, ¶ 37 (citations omitted). When making this assessment, we view the evidence in the light most favorable to the non-moving party. Lorang, ¶ 38 (citations omitted). If the moving party satisfies its burden, the non-moving party must “set forth specific facts, not merely denials, speculation, or conclusoiy statements, in order to establish that a genuine issue of material facts does indeed exist.” Lorang, ¶ 39; M. R. Civ. P. 56(e). Ultimately, if no issue of material fact exists, the Court must decide whether the facts entitle the moving party to judgment as a matter of law. Lorang, ¶ 39; M. R. Civ. P. 56(c).
¶17 This Court reviews a district court’s legal conclusion for correctness. Certain v. Tonn, 2009 MT 330, ¶ 9, 353 Mont. 21, 220 P.3d 384.
DISCUSSION
¶18 At the outset, we must address Hansen Trust’s attempt to argue issues raised for the first time after entry of judgment. Hansen Trust argues on appeal, and in its post-judgment motions before the District Court, that the 2009 amendment to § 15-18-212, MCA, is unconstitutional. This issue was raised for the first time in a post-judgment motion.
¶19 Generally, this Court will not address an issue raised for the first time on appeal. Day v. Payne, 280 Mont. 273, 276, 929 P.2d 864, 866 (1996) (citations omitted). This rule “applies to both substantive and procedural matters, as well as to a change in a party’s theory of the case.” Day, 280 Mont. at 276, 929 P.2d at 866 (citations omitted). The Court has consistently held that it is unfair to fault the trial court for an error when it was never given the opportunity to consider the issue, nor is it fair to permit a party to “remain silent in the trial court... and subsequently assert error on appeal if the outcome in the trial court is unfavorable.” Day, 280 Mont. at 277, 929 P.2d at 866 (citations omitted); Dayberry v. City of E. Helena, 2003 MT 321, ¶ 24, 318 Mont. 301, 80 P.3d 1218 (citations omitted). An exception to this general rule exists where “an alleged error affects the substantial rights of a litigant.” Day, 280 Mont. at 277, 929 P.2d at 866 (citations omitted). However, “the Court’s decision to review the alleged error is discretionary and the Court is not sympathetic to a broad definition of substantial rights.” Day, 280 Mont. at 277, 929 P.2d at 866 (citations omitted).
¶20 Hansen Trust did not raise the issue of the constitutionality of § 15-18-212, MCA, until after the District Court entered final judgment. Hansen Trust argues to this Court that it raised the issue in its summary judgment briefs; however, a review of the record shows otherwise. Hansen Trust only articulated the challenge to the statute after the District Court entered its final judgment. The post-judgment motion constitutes an effort to argue a new legal theory not raised before the trial court.
¶21 We therefore decline to review this issue on appeal.
¶22 Issue One: Whether the District Court erred when it entered summary judgment and declared the tax deed void.
¶23 The District Court granted summary judgment to Tarbets after considering the question of whether § 15-18-212, MCA, imposed a mandatory obligation to obtain a property title guarantee. The District Court concluded that § 15-18-212, MCA, does mandate that the purchaser obtain a property title guarantee and notify the listed parties. Otherwise, the District Court reasoned, the purchaser of the tax deed could avoid giving notice to interested parties by deciding not to obtain a property title guarantee. The District Court found additional support for its conclusion in the 2009 amendment to the statute, entitled: “An Act Requiring That Before A Tax Deed Sale May Be Held A Title Guarantee Must Be Obtained On The Property and Notice Must Be Given To All Parties, Other Than Utilities, Listed On The Title Guarantee.” 2009 Mont. Laws ch. 411.
¶24 Hansen Trust argues that the District Court erred by failing to recognize the “disputed issues as Constitutionally pertinent and being a priority issue needing further discovery.” Additionally, Hansen Trust maintains that Tarbets failed to show an absence of genuine issues of material fact. Tarbets maintain that the District Court correctly granted summary judgment in their favor. They assert that Hansen Trust failed to comply with the statutory requirement to obtain a property title guarantee and did not provide notice to Montana Abstract & Title Company. Without notice, the interested parties were unable to exercise their redemption rights and the tax deed is void.
¶25 The District Court did not err when it granted summary judgment in favor of Tarbets. When interpreting a statute, the primary “consideration must be defining the objectives the legislature sought to achieve.” Cenex, Inc. v. Bd. of Comm’rs, 283 Mont. 330, 335, 941 P.2d 964, 966 (1997) (citations omitted). The legislative intention is ascertained from the plain language of the statute. Cenex, Inc., 283 Mont. at 335, 941 P.2d at 967 (citations omitted). “If the intent of the legislature can be determined from the plain meaning of the words used in the statute, the plain meaning is controlling and the Court need not go further.” Cenex, Inc., 283 Mont. at 335, 941 P.2d at 967 (citations omitted). Moreover, “[statutory construction should not lead to absurd results if a reasonable construction will avoid it.” Gaub v. Milbank Ins. Co., 220 Mont. 424, 428, 715 P.2d 443, 445 (1986) (citations omitted).
¶26 Tax deed proceedings implicate a property owner’s fundamental interests. Mont. Earth Res. P’ship v. N. Blaine Estates, 1998 MT 254, ¶ 22, 291 Mont. 216, 967 P.2d 376. “The purpose behind the tax lien sales statutes is to protect property owners and their rights to due process.” Zinvest, LLC v. Hudgins, 2014 MT 201, ¶ 20, 376 Mont. 72, 330 P.3d 1135. Due to the important interests at stake, “every essential and material step required by the tax deed statutes must be strictly followed.” Moran v. Robbin, 261 Mont. 478, 482, 863 P.2d 395, 398 (1993) (citations omitted). Such exacting compliance with the statutes is necessary “because the owner risks losing his or her real property for the failure to pay the property taxes. Often, very valuable property is lost for a mere pittance.” Moran, 261 Mont. at 482-83, 863 P.3d at 398.
¶27 Pursuant to § 15-18-111, MCA, a property owner or interested party may redeem the tax hen on his or her property. Before a property owner may redeem the tax lien, he or she must know of its existence; therefore, notice is of utmost importance in these proceedings. This Court “long has recognized that redemption generally is a vested property right... of which the owner cannot be legally deprived except and only... by the giving of notice.” Tax Lien Servs. v. Hall, 277 Mont. 126, 131, 919 P.2d 396, 399 (1996) (citations omitted). The failure to provide adequate notice in compliance with the statute renders a tax deed void. Montana Earth Res. P’ship., ¶ 22; Moran, 261 Mont. at 483, 863 P.2d at 398.
¶28 In 2009, the Montana Legislature amended § 15-18-212, MCA. The Legislature deleted the words “interested party” and inserted “each party, other than a utility, listed on a property title guarantee.” Section 15-18-212(4)(a), MCA. The amendment clearly defines which parties are entitled to notice.
¶29 Section 15-18-212(l)(b), MCA, requires that a purchaser, other than the county, “shall notify the parties as required in subsection (4), if any, that a tax deed will be issued to the purchaser ... unless the property tax hen is redeemed.” The statute further states,
(4) (a) The notice required under subsections (1) and (2) must be made by certified mail, return receipt requested, to the current occupant, if any, of the property and to each party, other than a utility, listed on a property title guarantee, provided that:
(i) the guarantee has been approved by the insurance commissioner and issued by a licensed title insurance producer; and
(ii) the guarantee was ordered on the property by the person required to give notice.
Section 15-18-212(4), MCA (emphasis added).
¶30 Under the plain language of the statute, the purchaser must notify all parties listed on the property title guarantee, excluding utilities, of the possibility that a tax deed will be issued unless the tax lien is redeemed. Section 15-18-212(l)(b),4(a), MCA. Although “property title guarantee” is not defined, the notice requirement is mandatory. Section 15-18-212(lXb), MCA. Moreover, the statute clearly dictates the manner in which the notice must be made (certified mail), as well as the method for determining the parties who are due notice (a property title guarantee). Section 15-18-212(4Xa), MCA; Certain, ¶ 17. Notice is a necessary aspect of due process, essential to the redemption rights of the interested parties. The plain language of the statute does not make the title guarantee optional, rather it mandates that the notice must be made to “each party ... listed on a property title guarantee.”
¶31 The District Court correctly granted summary judgment after determining that Hansen Trust failed to provide adequate notice or obtain a property title guarantee. It is undisputed that Hansen Trust did not obtain the mandatory property title guarantee. Failure to comply with this mandatory obligation renders the tax deed void.
¶32 Issue Two: Whether the District Court erred when it directed payment of Hansen Trust’s tax lien.
¶33 After the District Court granted summary judgment and declared the tax deed void, Tarbets moved the District Court for an order directing payment of the tax lien and entry of a final judgment. Hansen Trust objected to Tarbets’ proposed redemption amount, arguing that the redemption amount differs from the bond deposit amount. Hansen Trust argued it was entitled to an award of “all of the assorted and collateral costs and expenses” associated with collection, administration, and litigation including attorney fees and trust administration costs.
¶34 The District Court rejected Hansen Trust’s request for additional costs and concluded that Hansen Trust was entitled to a payment of $6,783.91 under § 15-18-412(3), MCA. Additionally, the court determined that pursuant to § 15-18-412(6), MCA, Tarbets must also pay the accrued interest on the deposit from the date of the deposit order (October 21, 2013), as well as any additional taxes paid by Hansen Trust since the deposit was made. Tarbets agreed to pay Hansen Trust $465.43 in accrued interest, plus $1,477.20in additional taxes on the property. In total, Hansen Trust received $8,726.54 for redemption of the lien.
¶35 On appeal, Hansen Trust makes three arguments regarding the tax lien redemption. First, Hansen Trust maintains that the District Court exceeded its statutory authority when it entered the final judgment. Hansen Trust asserts that the court ruled in contravention of the statute and rendered a “likely unconstitutional interpretation of that statute [referring to § 15-18-412(7), MCA].”
¶36 Second, Hansen Trust argues that the District Court erroneously conflated the final redemption amount and the bond deposit amount. Hansen Trust asserts that the two amounts are governed by different statutes, §§ 15-18-411(l)(c)(i)(A), (B) and -413(2)(b), MCA, and that only the latter can provide relief. Hansen Trust argues that the bond deposit amount is insufficient to satisfy the final redemption amount, as it functions as a “down payment” or interim redemption amount calculated early in the proceeding. As such, Hansen Trust maintains that the costs ordered in the October 2013 deposit order are irrelevant when considering the final redemption amount.
¶37 Lastly, Hansen Trust argues that the District Court took an overly simplistic interpretation of “costs.” Hansen Trust points to the definition of costs in § 15-17-12 l(2)(a)-(c), MCA. On appeal, Hansen Trust takes particular issue with the exclusion of the insurance costs in the deposit amount, and by implication, the final payment on the tax lien. It asserts that property insurance should be covered, as someone must “take steps to insure and thus preserve the integrity of the property.”
a. The District Court’s Authority
¶38 The District Court did not exceed its authority when it declared the tax deed void and entered a final judgment for the redemption of the hen. Pursuant to § 15-18-412(7), MCA, a district court, ruling in a quiet title action, “has complete jurisdiction to fix the amount of taxes that should have been paid, including penalties, interest, and costs, and to determine all questions necessary in granting full relief.” Here, the District Court acted within the bounds of § 15-18-412(7), MCA, and did not exceed its authority.
b. Redemption Amount
¶39 In an action to set aside a tax deed, the District Court may order the property owner to deposit with the court money for the purchaser. Section 15-18-411, MCA. The deposit should equal “all taxes, interest, penalties, and costs that would have accrued if the property had been regularly and legally assessed and taxed as the property of the true owner and was about to be redeemed by the true owner.” Section 15-18-411(lXc)(iXA), MCA. The District Court ordered Tarbets to make the deposit and correctly applied subsection (A). Tarbets complied with this order and deposited $6,783.91 with the Court.
¶40 Section 15-18-412, MCA, provides if “the true owner is successful in the action and the tax proceedings are declared void, the amount deposited with the court must be paid to the purchaser.” Section 15-18-412(3), MCA. Additionally, in the final judgment, the court must determine the “rights resulting from any additional taxes on the property accruing or being paid by either party during the pendency of the suit.” Section 15-18-412(6), MCA.
¶41 Here, Tarbets succeeded in their efforts to have the tax deed declared void. In accordance with the statute, the District Court held that Hansen Trust was entitled to the deposit plus interest. Section 15-18-412(3), MCA. Additionally, the District Court correctly ordered Tarbets to pay the additional taxes paid by Hansen Trust since the date of the deposit. Section 15-18-412(6), MCA.
¶42 Section 15-18-413, MCA, further describes a grantee’s rights should the deed be attacked and held irregular or void. Pursuant to § 15-18-413(2)(b), MCA, if the tax deed is declared void, the conveyance must include the right “to recover the unpaid taxes, interest, penalties, and costs that would accrue if the tax proceeding had been regular and it was desired to redeem the property.” Costs are not defined specifically in Chapter 18, however Chapter 17, entitled “Tax Lien Sales,” contains a general definition, § 15-17-121, MCA. Costs in the context of a tax lien proceeding include “costs that are required by law and incurred by the purchaser of a property tax lien other than the county.” Section 15-17-12 l(2)(b), MCA.
¶43 Hansen Trust argues that the definition of costs in § 15-17-121(2Xb), MCA, applies and asserts that it is entitled to additional costs under this statute including property insurance, trust expenses, and attorney fees. While we agree that additional expenditures, such as property insurance could be considered reasonable, none of Hansen Trust’s requested costs are required by law. Therefore, the District Court was not incorrect when it concluded that the additional requested costs would not be awarded to Hansen Trust.
¶44 The District Court did not err when if determined the redemption amount for the properly. The District Court properly ordered Tarbets to deposit with the Court an amount reflecting the taxes, interest, penalties, and costs that would have accrued under normal circumstances. When the tax deed was declared void, the District Court correctly provided Hansen Trust with the deposit, plus interest and any additional taxes paid on the property. Finally, the District Court had the discretion to deny the additional costs as these are costs not required by state law.
¶45 Issue Three: Whether the District Court erred when it denied Hansen Trust’s post-judgment motions.
¶46 Hansen Trust filed numerous motions after the District Court entered its final judgment. The motions presented various arguments under multiple rules of civil procedure. The District Court denied all post-judgment motions. The only post-judgment motion properly preserved for appellate review is Hansen Trust’s first motion, made pursuant to M. R. Civ. P. 60(a) and 54(c).
¶47 The District Court did not err when it denied Hansen Trust’s Rule 60(a) motion to correct the date for calculating the interest due on the deposit. The District Court ordered that interest should accrue at “the statutory rate of 5/6th of 1% per month from and after October 21, 2013.” That date accurately represents the day that the District Court ordered Tarbets to deposit the money with the District Court. The District Court did not err in calculating interest from the date of its order.
¶48 In that motion, Hansen Trust also argued that the court failed to grant the relief to which the Trust was entitled under §§ 15-18-413 and 15-17-121, MCA. It asserted, once again, that the court erred by conflating the bond deposit amount and the redemption amount, as well as the associated costs. We have resolved these issues in this Opinion and it is unnecessary to address them again.
CONCLUSION
¶49 For the reasons set forth herein, the judgment of the District Court is affirmed. The District Court did not err when it granted summary judgment in favor of Tarbets. We further conclude that the District Court did not abuse its discretion when it directed an order for the payment of the tax lien and denied Hansen Trust’s motions.
¶50 Tarbets request an award of attorney fees on appeal. We decline to enter such an award.
¶51 Affirmed.
JUSTICES WHEAT, COTTER, BAKER and McKINNON concur.
(1) Plaintiffs Motion Objecting to the Court’s June 9, 2014 Memorandum and Order and its Final Judgment Order for Failing to Comply with Rule 54(c), a Motion for the Correction of Error Pursuant to Rule 60(a), and a Motion for Amended or Additional Findings as Authorized by Ride 52(b) of the Montana Rules of Civil Procedure; (2) Plaintiffs Motion Pursuant to Rule 59 of the Montana Rules of Civil Procedure to Alter or Amend Judgment or For a New Trial; (3) Plaintiffs Motion for Relief Pursuant to Rule 60(b)(4) and Rule 62.1(a)(3).
Section 15-18-111(1), MCA, provides: Redemption of a properly tax lien acquired at a tax lien sale or otherwise may be made by the owner, the holder of an unrecorded or improperly recorded interest, the occupant of the property, or any interested party within 36 months from the date of the first day of the tax lien sale or within 60 days following the giving of the notice required in 15-18-212, whichever is later.
This section refers to the true owner of the property as the person claiming to “own the property; have any interest in or lien upon the property; have a right to redeem the property; or have rights hostile to the tax title.” Section 15-18-411(l)(a)(iv), (b), MCA. Here, Tarbets are the owners with a right to redeem the property due to their status in the Montana Trust Indenture.
Referring to the new deed.
|
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JUSTICE BAKER
delivered the Opinion of the Court.
¶1 Matthew Montgomery appeals an order of the District Court for the Twenty-First Judicial District, Ravalli County, denying his motion to vacate his conviction and dismiss the charges against him. The issue on appeal is whether the District Court erred in concluding that it had subject matter jurisdiction over the State’s case against Montgomery.
¶2 We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶3 In May 2006, Montgomery was charged with felony counts of sexual assault and sexual abuse concerning four alleged child victims. Following amendment of the information to add new charges regarding the same victims, Montgomery and the State eventually reached a plea agreement. Montgomery pleaded guilty to two counts of felony sexual assault in exchange for the dismissal of the remaining counts and the State’s withdrawal of the persistent felony offender notification. The District Court sentenced Montgomery in January2007 to twenty years in prison with ten years suspended for each felony, to run consecutively. In addition, Montgomery’s probation in a 2003 case was revoked, and he received an additional consecutive twenty-year prison sentence.
¶4 In October2008, Montgomery, representing himself, filed a motion to withdraw his guilty plea. The District Court denied the motion and we affirmed. State v. Montgomery, 2010 MT 193, 357 Mont. 348, 239 P.3d 929. Montgomery then filed with the District Court a motion for summary judgment, in which he attempted to challenge his plea and resurrect his earlier ineffective assistance of counsel claims. The court denied his motion. Montgomery did not appeal.
¶5 On October 8, 2014, Montgomery filed a motion to vacate his conviction and dismiss the charges. Montgomery claimed that the District Court lacked subject matter jurisdiction because the charges were not brought by a grand jury process, and that Montana law does not allow a court to obtain jurisdiction over a felony without this process. The District Court denied the motion. Montgomery appeals.
STANDARD OF REVIEW
¶6 The grant or denial of a motion to dismiss in a criminal case presents a question of law that we review for correctness. State v. Haller, 2013 MT 199, ¶ 5, 371 Mont. 86, 306 P.3d 338, citing State v. Robison, 2003 MT 198, ¶ 6, 317 Mont. 19, 75 P.3d 301.
DISCUSSION
¶7 Arguing that he has a right under the United States Constitution’s Fifth Amendment to a grand jury determination of probable cause, Montgomery asserts that the District Court did not have subject matter jurisdiction over his felonies. He claims that the District Court abused its discretion in its order because the court did not address this issue of federal constitutional law. He further asserts that since the Legislature did not codify any rule regarding indictments by grand jury, then a court must invoke common law or the Fifth Amendment.
¶8 The State counters that the District Court has subject matter jurisdiction under Montana’s Constitution and state law. Mont. Const, art. VII, § 4; § 3-5-302(lXa), MCA. The State points out that Article VII, Section 4 of the state constitution vests sentencing courts with original jurisdiction in felony cases. Pena v. State, 2004 MT 293, ¶ 23, 323 Mont. 347, 100 P.3d 154, overruled in part on other grounds by Davis v. State, 2008 MT 226, ¶ 23, 344 Mont. 300, 187 P.3d 654. The State argues that the determination of probable cause is not a jurisdictional issue and that the District Court properly exercised its subject matter jurisdiction over Montgomery’s felonies.
¶9 “[T]he Fifth Amendment’s grand jury requirement has not been construed to apply to the states.” U.S. v. Allen, 406 F.3d 940, 942 (8th Cir. 2005). See Apprendi v. New Jersey, 530 U.S. 466, 477 n.3, 120 S. Ct. 2348, 2355 n.3 (2000) (noting that the Fourteenth Amendment “has not ... been construed to include the Fifth Amendment right to ‘presentment or indictment of a Grand Jury... .’ ”). As the State correctly explains, Montana’s specific constitutional and statutory provisions define a district court’s jurisdiction and provide for commencing a state prosecution. Mont. Const. art. H, § 20(1) and art. VII, § 4(1); §§ 3-5-301(1), -302(l)(a), and 46-11-101, MCA. “The district court has original jurisdiction in all criminal cases amounting to felony ....” Mont. Const, art. VII, § 4(1).
¶10 Montgomery incorrectly asserts that the Legislature failed to codify the process for indictment by grand jury. Montana statutes allow for grand juries. Sections 46-11-301 through -332, MCA. This is not, however, the primary method used to commence a prosecution. State ex rel. Woodahl v. District Court, 166 Mont. 31, 36, 530 P.2d 780, 783 (1975); § 46-11-101, MCA. Montgomery references late 19th century Montana case law when grand jury indictments primarily were used, but Montana courts long ago moved away from that process. See State v. Vinn, 50 Mont. 27, 34, 144 P. 773, 775-76 (1914) (“One of the purposes ... was to dispense with the slow, expensive, and therefore unsatisfactory procedure by indictment, and to substitute a procedure expeditious and inexpensive, to be availed by the prosecuting officers at their discretion, subject to control by the court[.]”). See Woodahl, 166 Mont. at 44, 530 P.2d at 788.
¶11 Montgomery was prosecuted under § 46-11-101(3), MCA. Montana statutes offer four methods to commence a prosecution in this state, one of which is indictment by a grand jury. Section 46-11-101(1)-(4), MCA. A Montana statute also provides “three different procedures by which the State can obtain the requisite probable cause determination before filing charges in district court [.T Haller, ¶ 8; § 46-10-105, MCA. “[A] defendant is not entitled to any specific procedure.” Haller, ¶ 8, citing State v. Farnsworth, 240 Mont. 328, 332, 783 P.2d 1365, 1368 (1989). The State commenced Montgomery’s felony prosecution under Montana’s statutory scheme by filing an application and an affidavit that identifies supporting evidence demonstrating probable cause. Sections 46-11-101(3); 46-11-201, and 46-10-105(2), MCA. The District Court had subject matter jurisdiction over the felonies as stated in Mont. Const, art. VII, § 4(1) and § 3-5-302(lXa), MCA, and the court granted leave for the prosecution to commence. Section 46-11-101(3), MCA. Montgomery was not entitled to an indictment by a grand jury.
CONCLUSION
¶12 The District Court’s order is affirmed.
CHIEF JUSTICE McGRATH, JUSTICES SHEA, WHEAT and COTTER concur.
|
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