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Garrett v. Willmarth

2016 MT 327N

DA 16-0142

Montana

Montana Supreme Court

DA 16-0142 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 327N IN RE THE PARENTING OF: B.W. and G.W., KAYLA GARRETT, Petitioner and Appellant, v. CHRISTOPHER WILLMARTH, Respondent and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. DDR 11-410 Honorable Dirk M. Sandefur, Presiding Judge COUNSEL OF RECORD: For Appellant: Eric D. Mills, Sutton, DuBois & Mills, PLLC, Great Falls, Montana For Appellee: Jeffrey S. Ferguson, Jeffrey S. Ferguson Law Office, PLLC, Great Falls, Montana Submitted on Briefs: October 12, 2016 Decided: December 13, 2016 Filed: /S/ ED SMITH Clerk 12/13/2016 Case Number: DA 16-0142 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Kayla Garrett appeals from the Order and Judgment after Hearing Regarding Respondent’s Objection to Standing Master’s Findings of Fact, Conclusions of Law and Order Amending Parenting Plan issued by the Eighth Judicial District Court, Cascade County, on February 4, 2016, reinstating the Stipulated Amended Parenting Plan entered into by the parties on August 12, 2013. We affirm. ¶3 Garrett and Christopher Willmarth married in 2007 and have two biological children, B.W., born in 2008, and G.W., born in 2005. The parties divorced in December 2011 and subsequently entered into a Stipulated Final Parenting Plan. This first parenting plan split custody equally between the parties. In December 2012, Garrett filed a Notice of Intent to Move and related Proposed Amended Parenting Plan informing the District Court that she was choosing to move to the area of San Antonio, Texas, to pursue educational opportunities. Garrett’s proposed parenting plan required that B.W. and G.W. live with her in Texas during the school year, and that they would spend the summer months with Willmarth in Montana. ¶4 In August 2013, the parties entered into a Stipulated Amended Parenting Plan (2013 Plan) which required that B.W. and G.W. reside with Willmarth in Montana during 3 the school year and live in Texas with Garrett during the summer months. Shortly after the implementation of the 2013 Plan, communication between the parties deteriorated. Garrett filed a Motion to Enforce the Stipulated Amended Parenting Plan in January 2014, arguing that Willmarth had violated the communication provisions in the 2013 Plan. Subsequently, Garrett filed a Motion to Amend Parenting Plan and Brief in Support in May 2015. ¶5 A Standing Master held a bench trial in August 2015, hearing testimony from both parties. On November 19, 2015, the Standing Master issued a Findings of Fact, Conclusions of Law, and Order Amending Parenting Plan (Standing Master’s Report) adopting a Second Amended Final Parenting Plan (2015 Plan) altering custody of B.W. and G.W. Specifically, the 2015 Plan required that B.W. and G.W. live in Texas with Garrett during the school year and live in Montana with Willmarth during the summer months. Willmarth filed objections to the Standing Master’s Report. In January 2016, the District Court held an extensive hearing on Willmarth’s objections. After a detailed review of the evidence presented and the Standing Master’s Report, the District Court vacated the Standing Master’s order adopting the 2015 Plan, and reinstated the 2013 Plan. Specifically, the District Court determined that certain findings of fact and conclusions of law stated by the Standing Master were speculative and arbitrary conclusions not supported by the record, and constituted an abuse of discretion. The District Court noted that additional findings of fact relied on by the Standing Master must be given limited weight in order to be consistent with other determinations contained in the Standing Master’s Report. Further, the District Court held that the Standing Master 4 abused its discretion in weighing certain factors in favor of Garrett’s proposed parenting plan. In light of those determinations, the District Court concluded that the Standing Master abused its discretion in adopting Garrett’s proposed parenting plan, and concluded that the 2013 Plan should govern. ¶6 We review a district court’s decision de novo to determine whether it applied the correct standard of review to a master’s findings of fact and conclusions of law. Patton v. Patton, 2015 MT 7, ¶ 17, 378 Mont. 22, 340 P.3d 1242 (citation omitted). A district court reviews a master’s conclusions of law for correctness. Patton, ¶ 43. A district court must review a master’s findings of fact to determine whether they are clearly erroneous. In re G.J.A., 2014 MT 215, ¶ 21, 376 Mont. 212, 331 P.3d 835. “A finding is clearly erroneous if it is not supported by substantial evidence, if the Master misapprehended the effect of the evidence, or if its review of the record convinces the reviewing court that the Master made a mistake.” In re G.J.A., ¶ 21 (citation omitted). Further, if the master’s findings of fact are not clearly erroneous and its conclusions of law are correct, a district court may review the master’s determination for an abuse of discretion in child custody cases. Patton, ¶ 26. An abuse of discretion exists where the master acted arbitrarily, without employment of conscientious judgment or exceeded the bounds of reason resulting in substantial injustice. Albrecht v. Albrecht, 2002 MT 227, ¶ 7, 311 Mont. 412, 56 P.3d 339 (citation omitted). ¶7 Pertinent in Patton and here, the Montana Eighth Judicial District Court, Cascade County, issued an Amended Charter Order in re District Standing Master Establishment & Procedure, which clarified the procedure regarding the standing master position 5 created by the Judicial District in 2010, and under which the Standing Master was appointed in this case. Amended Charter Order in re District Standing Master Establishment & Procedure, In re the Est. of a Dist. Standing Master for all Dep’t of the Dist. Ct. (Mont. 8th Jud. Dist. April 28, 2015) (Amended Charter Order); see Charter Or. Establishing Dist. Standing Master, In re the Est. of a Dist. Standing Master for all Dep’t of the Dist. Ct. (Mont. 8th Jud. Dist. June 25, 2010). The Amended Charter Order explicitly provides that the above mentioned standard of review, as cited in Patton, is to be applied by the District Court to reports issued by Standing Masters. Amended Charter Order at 12-16. The District Court expressly relied upon both our case law and the Amended Charter Order in reaching its decision in this case. ¶8 Garrett argues the District Court applied the incorrect standard of review to the Standing Master’s Report, maintaining that the District Court erred by reviewing relevant and pertinent factual findings for correctness instead of for clear error. In stating its rationale from the bench, the District Court thoroughly delineated the standard of review it was applying to the Standing Master’s determinations in the instant case. The District Court noted that a master’s conclusions of law are reviewed for correctness and that the District Court could only reverse findings of fact if they were clearly erroneous. The District Court went on to articulate the three avenues through which a finding of fact may be clearly erroneous: the finding is not supported by substantial credible evidence; the master misapprehended the effect of the evidence; the reviewing court has a definite and firm conviction that the master was mistaken in its assessment of the evidence. Further, the District Court noted that the Eighth Judicial District Court’s Amended Charter Order 6 governing the appointment of Standing Masters permits the District Court to reverse a master’s determination, even if the findings of fact are not clearly erroneous and the conclusions of law are correct, if the master abused his or her discretion. Amended Charter Order at 14-15; accord Patton, ¶¶ 21-26. Finally, the District Court noted that, in order to find that a master abused his or her discretion, the reviewing court must determine that the master acted arbitrarily, without employment of conscientious judgment or acted in such a way that exceeds the bounds of reason resulting in substantial injustice. We conclude that the District Court applied the correct standard of review to the Standing Master’s Report. ¶9 Further, Garrett argues that the District Court abused its discretion by considering issues beyond the scope of Willmarth’s objections to the Standing Master’s Report. Specifically, Garrett cites this Court’s decision in In re Marriage of McMichael, 2006 MT 237, ¶¶ 15-16, 333 Mont. 517, 143 P.3d 439, for the premise that the District Court commits reversible error when it considers findings of fact and conclusions of law that were not specifically objected to by either party. However, our decision in McMichael concerned whether or not a District Court could “modify findings or conclusions not specifically objected to by either party,” McMichael, ¶ 15, not whether a District Court could consider findings of fact and conclusions of law that were not objected to when making its final determination. We conclude that the District Court did not err in considering findings of fact and conclusions of law not specifically objected to when making its final determination regarding the Standing Master’s Report. 7 ¶10 Finally, Garrett argues that the District Court abused its discretion by substituting its judgment for that of the Standing Master. We disagree. The District Court engaged in a thorough review of the Standing Master’s Report, continually and correctly reiterating the standard of review it was applying. Upon review of the record, we conclude that the District Court did not err in vacating the 2015 Plan and reinstating the 2013 Plan. ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of this Court, this case presents a question controlled by settled law. ¶12 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ JIM RICE

December 13, 2016

c81d7b0c-204d-4294-8c63-7b5c088aee2a

Marriage of Paschen

2016 MT 297N

DA 16-0079

Montana

Montana Supreme Court

DA 16-0079 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 297N IN RE THE MARRIAGE OF: HERBERT CHRISTIAN PASCHEN, Petitioner, Appellee and Cross-Appellant, And ANNE KEMSLEY PASCHEN, Respondent, Appellant and Cross-Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DR 12-825A Honorable Amy Eddy, Presiding Judge COUNSEL OF RECORD: For Appellant and Cross-Appellee: Brian Muldoon, Law Office of Brian Muldoon, P.C., Whitefish, Montana For Appellee and Cross-Appellant: Matthew D. Neill, Johnson-Gilchrist Law Firm, Whitefish, Montana Submitted on Briefs: October 5, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 16-0079 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Anne Kemsley Paschen (Anne) appeals, and Herbert Christian Paschen (Herb) cross-appeals, the amended findings of fact, conclusions of law, and order of the Eleventh Judicial District Court, Flathead County, dissolving the parties’ marriage and awarding spousal maintenance and child support to Anne. We address whether the District Court abused its discretion in calculating maintenance and child support and ordering the corresponding payments to commence on April 1, 2015. We affirm the District Court’s order in part, reverse in part, and remand for further proceedings consistent with this Opinion. ¶3 Anne and Herb were married for eighteen years and have three children. On March 31, 2015, the District Court issued its findings of fact, conclusions of law, and order dissolving their marriage (2015 Order). Herb appealed the 2015 Order. In Paschen v. Paschen, 2015 MT 350, 382 Mont. 34, 363 P.3d 444 (Paschen I), we addressed whether the District Court erred in the amount of income it imputed to Herb for the purpose of setting monthly child support and spousal maintenance payments and in apportioning the marital estate. We “affirm[ed] the District Court’s imputation of Herb’s earning capacity at $100,000 but reverse[d] and remand[ed] the court’s inclusion of 3 [Herb’s mother] Bunny’s monetary gifts into his annual resources for purposes of child support and spousal maintenance.” Paschen I, ¶ 43. On January 6, 2016, the District Court issued its amended findings of fact, conclusions of law, and order (2016 Order). Anne and Herb each appeal parts of the 2016 Order. ¶4 We review a district court’s division of marital property to determine “whether the court’s findings of fact are clearly erroneous and whether its conclusions of law are correct.” In re Marriage of Richards, 2014 MT 213, ¶ 13, 376 Mont. 188, 330 P.3d 1193. “A finding is clearly erroneous if it is not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake.” Patton v. Patton, 2015 MT 7, ¶ 18, 378 Mont. 22, 340 P.3d 1242. If there are no clearly erroneous findings or incorrect conclusions of law, we determine whether the district court abused its discretion. Patton, ¶ 19. A district court abuses its discretion if it acts arbitrarily without employing conscientious judgment or exceeds the bounds of reason resulting in a substantial injustice. Patton, ¶ 19. ¶5 Anne contends that the District Court abused its discretion by failing to consider Herb’s financial resources of $431,000 a year in calculating child support and maintenance. In Paschen I, we affirmed “the District Court’s imputation of $100,000 annual income to Herb” for the purpose of setting child support and maintenance payments. Paschen I, ¶ 26. We noted then that Anne “urged the District Court to impute to Herb an income of $410,000/annually,” but “[t]he District Court was presented with concrete evidence of Herb’s ability to earn approximately $100,000 annually.” 4 Paschen I, ¶¶ 24-25. The issue of whether the District Court abused its discretion in calculating Herb’s income for the purposes of child support was decided in Paschen I. We will not revisit that decision. See State v. Shelton, 2008 MT 321, ¶ 13, 346 Mont. 114, 193 P.3d 943 (“Generally, res judicata dictates that an appellant may not raise issues that we have decided in a prior appeal.”) (citations omitted). ¶6 Similarly, we reject Herb’s argument that the District Court erred or abused its discretion in apportioning the marital estate. Herb does not contest the District Court’s allocation of the vast majority of marital debt to him, but contends that the District Court abused its discretion by also requiring him to pay spousal maintenance. He argues that the District Court unfairly ignored the “real-life repercussions” of the debt he faces, but cites no facts to support his speculation that potential bankruptcy would affect his future earning capacity and ability to pay child support and maintenance. Again, we addressed Herb’s income in Paschen I and held: “The District Court was presented with concrete evidence of Herb’s ability to earn approximately $100,000 annually.” Paschen I, ¶ 25. Herb’s attempt to relitigate his earning potential is barred by res judicata. See Shelton, ¶ 13. ¶7 Herb next contends that the District Court erred in calculating spousal maintenance in its 2016 Order because, regarding Herb’s monthly expenses, the Court found: “The only evidence before the Court at trial was Herb’s $400 a month rent; that is only $4,800 annually.” Herb contends that his “Exhibit 11,” admitted at trial, “reveal[s] 5 monthly expenses of $1,860/month.”1 He also points to his testimony at trial that his expenses are “approximately $2,000 a month.” Anne does not contest that Exhibit 11 was admitted at trial or that Herb testified that his expenses were greater than $400. Regardless of whether the District Court ultimately finds this evidence persuasive in calculating spousal support on remand, the Court’s finding that the “only evidence before the Court at trial was Herb’s $400 a month rent,” (emphasis added) is clearly erroneous. ¶8 Herb also contends—and Anne concedes—that the District Court erroneously applied the Child Support Guidelines, Admin. R. M. 37.62.110(1)(a) (2012), by failing to account for Herb’s spousal maintenance obligation in calculating child support. Pursuant to § 40-4-204(3)(a), MCA, district courts must “determine the child support obligation by applying . . . the uniform child support guidelines adopted by the department of public health and human services.” Admin. R. M. 37.62.110(1)(a) provides that “allowable deductions” from a parent’s income for calculating child support include “the amount of alimony or spousal maintenance which a parent is required to pay under a court or administrative order.” The District Court erred by failing to address this rule. ¶9 Finally, Anne contends—and Herb agrees—that the District Court abused its discretion in its 2016 Order by ordering Herb’s child support and maintenance obligations to commence on April 1, 2015. Herb contends that his obligations should be retroactive to August 2014, citing the 2015 Order’s “Decree and Order,” which provides: “Petitioner is responsible for monthly child support . . . effective August, 2014”; and 1 Although the transcript from the bench trial held on October 15 and 16, 2013, indicates that Exhibit 11 was admitted without objection, the exhibit is not part of the record on appeal. On remand, the District Court must consider all of the record evidence in making its findings. 6 “Petitioner is responsible for maintenance . . . effective August, 2014.” Herb contends that August 2014 is the correct start date under the law of the case doctrine because neither party appealed that date in Paschen I. Under the doctrine of law of the case, a legal decision made at one stage of litigation which is not appealed when the opportunity to do so exists, becomes the law of the case for the future course of that litigation and the party that does not appeal is deemed to have waived the right to attack that decision at future points in the same litigation. McCormick v. Brevig, 2007 MT 195, ¶ 38, 338 Mont. 370, 169 P.3d 352. Anne cites the 2015 Order’s finding of fact that “Herb should pay Anne maintenance . . . effective October, 2013.” Although this finding is clearly inconsistent with the Court’s order that maintenance should commence “effective August, 2014,” Anne did not argue in Paschen I that the District Court’s findings were inconsistent with its order or that Herb’s obligations should be retroactive to October 2013. The District Court’s 2016 Order’s start date of April 2015 is inconsistent with its 2015 Order’s start date of August 2014, which was not appealed. Herb’s maintenance and child support obligations are retroactive to August 2014. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court erred by finding that the only evidence before it regarding Herb’s expenses was $400 a month in rent and failing to address the evidence of Herb’s other expenses presented at trial. The District Court erred when it did not deduct Herb’s spousal maintenance obligation from his income in 7 its calculation of child support and ordered Herb’s child support and spousal maintenance obligations to commence on April 1, 2015. The District Court did not err in apportioning the marital estate or imputing Herb’s income. We remand for the District Court to consider all of the evidence of Herb’s expenses, deduct Herb’s spousal maintenance obligation from his income in its calculation of child support, calculate his obligations accordingly, and order Herb’s child support and maintenance obligations to commence on August 1, 2014. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BETH BAKER /S/ MICHAEL E WHEAT

November 15, 2016

ab37272e-f777-410f-88a2-d9bf8920e045

Crawford v. Couture

2016 MT 291

DA 16-0282

Montana

Montana Supreme Court

DA 16-0282 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 291 ROBERT CRAWFORD, Plaintiff and Appellant, v. CASEY COUTURE, FLATHEAD TRIBAL POLICE OFFICER; FLATHEAD TRIBAL POLICE DEPT.; CONFEDERATED SALISH KOOTENAI TRIBAL GOVERNMENT; and OTHERS UNKNOWN, Defendants and Appellees. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV-15-243 Honorable James A. Manley, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert Lee Crawford (Self-Represented), Deer Lodge, Montana For Appellees: Rhonda Swaney, Shane A. Morigeau, Confederated Salish and Kootenai Tribes, Pablo, Montana Submitted on Briefs: October 12, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 16-0282 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Robert Crawford (Crawford) appeals from an April 20, 2016 District Court order granting a motion to dismiss Crawford’s claims against Flathead Tribal Police Officer Casey Couture (Couture), the Flathead Tribal Police Department, and the Confederated Salish Kootenai Tribal Government. We affirm. ¶2 We restate the issue on appeal as follows: Issue: Did the District Court err when it dismissed Crawford’s claims for lack of subject matter jurisdiction? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On March 13, 2012, Crawford was pulled over by Couture on the Flathead Reservation. Couture identified each person in the vehicle, arrested one, letting Crawford and the others leave. Couture was then in contact with Crawford’s parole officer, who informed Couture that Crawford was in violation of his parole because he did not have permission to be traveling in that area. On March 17, 2012, Lake County Deputy Sheriff Levi Read (Read) arrested Crawford on the Flathead Reservation upon a warrant issued by Butte-Silver Bow County Probation for parole violations. The State charged Crawford with criminal possession of dangerous drugs. A jury found him guilty. Crawford appealed his conviction and we affirmed in State v. Robert Lee Crawford, 2016 MT 96, 383 Mont. 229, 371 P.3d 381. ¶4 During his appeal, Crawford filed the instant complaint in state court seeking recovery from the named defendants. Crawford alleged numerous claims including libel, slander, false imprisonment, and injuries involving property due to inappropriate conduct 3 by Couture. The Tribes, on behalf of the Tribes, Couture, and the Police Department filed a motion to dismiss the complaint or in the alternative summary judgment. The District Court granted the Tribes motion to dismiss based on lack of subject matter jurisdiction and the sovereign immunity of the Tribe. Crawford appealed. STANDARD OF REVIEW ¶5 “We review de novo a district court’s ruling on a motion to dismiss for lack of subject matter jurisdiction.” Big Spring v. Conway (In re Estate of Big Spring), 2011 MT 109, ¶ 20, 360 Mont. 370, 255 P.3d 121 (citing Cooper v. Glaser, 2010 MT 55, ¶ 6, 355 Mont. 342, 228 P.3d 443). “A district court must determine whether the complaint states facts that, if true, would vest the court with the subject matter jurisdiction. This determination by a district court is a conclusion of law that we review for correctness.” Big Spring, ¶ 20 (citing Meagher v. Butte-Silver Bow City-County, 2007 MT 129, ¶ 13, 337 Mont. 339, 160 P.3d 552). DISCUSSION ¶6 Issue: Did the District Court err in dismissing Crawford’s claims for lack of subject matter jurisdiction? ¶7 Absent express authorization by Congress, state courts lack jurisdiction over Indian tribes and tribal members within their reservations. Williams v. Lee, 358 U.S. 217, 223, 79 S. Ct. 269, 272 (1959). When analyzing both regulatory and adjudicatory actions involving tribes and their members for conduct occurring within tribal territory, the State must determine if the “exercise of jurisdiction by a state court or regulatory body is preempted by federal law.” Big Spring, ¶ 46. If it is not preempted then the State must 4 determine if the “action infringes on tribal self government.” Big Spring, ¶ 46. If either is present, the state court will not have subject matter jurisdiction. ¶8 The State does not have subject matter jurisdiction over Crawford’s claims. Congress has not authorized state jurisdiction of civil claims against the Tribe or tribal officers. See Williams, 358 U.S. at 223, 79 S. Ct. at 272. Further, Crawford’s claims do not fall under the limited concurrent jurisdiction agreement between the Tribes and the United States. 18 U.S.C. § 1162; 28 U.S.C. § 1360 (P.L. 280); see also Laws of the CSKT § 1-2-105 (2013). Crawford has not identified any basis in federal law that would provide the State court jurisdiction over his claims. His claims are preempted by federal law. ¶9 Tribal self-governance would also be infringed upon if the State asserted jurisdiction. Crawford’s claims are against the Tribe, tribal members, and tribal government departments regarding a series of events occurring entirely within the exterior boundaries of the reservation. There is no scenario where the state would not be infringing on the Tribes right to self-governance in this case if state jurisdiction was asserted. “[T]he exercise of state jurisdiction over activities occurring entirely on Indian lands is an infringement on inherent tribal authority and is contrary to principles of self-government and tribal sovereignty.” In re Fair Hearing of Hanna, 2010 MT 38, ¶ 17, 355 Mont. 236, 227 P.3d 596 (citing Flat Ctr. Farms, Inc. v. State, 2002 MT 140, ¶ 13, 310 Mont. 206, 49 P.3d 578). ¶10 The Tribe is a sovereign authority with the authority over its members and its territories. Tribes are “‘domestic dependent nations’ that exercise inherent sovereign 5 authority over their members and territories.’” Confederated Salish & Kootenai Tribes v. Clinch, 2007 MT 63, ¶ 18, 336 Mont. 302, 158 P.3d 377 (citing Oklahoma Tax Comm’n v. Potawatomi Tribe, 498 U.S. 505, 509, 111 S. Ct. 905, 909 (1991)). “Suits against Indian tribes are . . . barred by sovereign immunity absent a clear waiver or congressional abrogation.” Oklahoma Tax Comm’n, 498 U.S. at 509, 111 S. Ct. at 909. CONCLUSION ¶11 The District Court properly dismissed Crawford’s claims based on lack of subject matter jurisdiction and sovereign immunity. ¶12 Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ JIM RICE

November 15, 2016

4a409b2e-eb0c-4b8c-bae6-3fe405114077

BROKKE v WILLIAMS

N/A

88-448

Montana

Montana Supreme Court

NO. 88-448 IN THE SUPREME COURT OF THE STATE OF MONTANA 1989 PAUL BROKKE, Plaintiff and Respondent, -vs- ALBERT D . WILLIAMS d/b/a AL' S PAFJNSHOP, Defendant and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Thomas Olson, Judge presiding. COUNSEL OF RECORD: For Appellant: Albert D. Williams, Pro Se, Eozeman, Montana For Respondent: Paul Brokke, Pro se, Bozeman, Montana Filed :TI - Submitted on Briefs: Dec. 9, 1988 Decid.ed: January 5, 1989 I - M 3 < 0 T O ' . . .. t s ED SMITH - - Clerk k- --, <b - Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. This is an appeal from judgment entered in the Eight- eenth Judicial District awarding damages in the amount of $89.95 plus costs to plaintiff Paul Brokke. Both Brokke and Williams are pro se litigants. Defendant Williams appeals. We affirm. The issue on appeal is whether a merchant can disclaim responsibility for furnishing title to goods sold in his business by placing "sold as is" signs in his establishment. We hold that he cannot. Albert D. Williams operates a pawnshop in Bozeman, Montana. Plaintiff Paul Rrokke entered defendant's business on October 31, 1985, and placed a Pentax Super Program camera on layaway by paying a $20 down payment and agreeing to pay the $69.95 balance due on the purchase. The camera was stolen property. On November 4, 1985, plaintiff paid the remaining balance on the layaway transaction and took possession of the camera, serial number 1190586. Later that same month, plain- tiff was notified by the Rozeman police department that the camera was stolen property. He was directed to surrender the camera to the police department which he did on November 18, 1985. Plaintiff promptly returned to the pawnshop and re- quested a refund for his purchase of the stolen merchandise. That request was denied by Williams and litigation ensued. After justice court proceedings, hearing was held on January 21, 1988, which resulted in a District Court judgment in favor of plaintiff. Defendant appeals. Defendant argues that he had no knowledge that the merchandise was stolen property. Williams argues further that he disclaims any warranty of title to goods sold in his business by way of large fluorescent signs posted which alert buyers that the merchandise sold on the premises is sold "as is," and by writing the same on his sales receipts. We disagree. It was disputed as to whether the signs described an6 entered into evidence at the hearing by photographs taken by defendant were actually in place when plaintiff entered the store. However, that factual dispute is not relevant to the legal issues involved. The issue is controlled by the Montana Uniform Comrner- cia1 Code (UCC) . Section 30-2-312, MCA, warrants that a merchant selling goods passes clear title to the goods. Clearly, Williams breached that warranty of title required by the code when he sold stolen goods to Brokke because it has long been established that a thief cannot pass clear title to his stolen goods, City of Portland v. Berry (0r.App. 1987), 739 P.2d 1041; nor can his successor. It is irrelevant that Williams claims he did not know the goods were stolen. With respect to breach of warranty, Williams, as a merchant, is held to a higher standard of dealing than ordi- nary consumers. Pace v. Sagebrush Sales Co. (Ariz. 1977) , 560 P.2d 789. Further, Williams is held to the obligatorj. good faith required in the performance of every contract and every duty under the UCC. Section 30-1-203, MCA. Good faith is defined under the UCC as "honesty in fact." Section 30-1-201 (19), MCA. It is undisputed that Brokke promptly notified Williams of his breach of warranty of title, thus defeating many defenses available to Williams under the code. The question then becomes, did Williams do anything to effectuate a disclaimer of the warranty of title in this transaction. We affirm the trial court's conclusion that he did not. Warranty of title is not subject to the disclaimers found in 5 30-2-316, MCA, pertaining to fitness and merchant- ability. Williams argues that his conduct of placing the signs is his notice of a specific and written disclaimer. However, that conduct does not meet the disclaimer of warran- ty of title found in 5 30-2-312(3), MCA, which states "unless otherwise agreed" a seller who is a merchant warrants that the goods shall be delivered free of the rightful claim of any third person. Clearly, there could have been no agreement to that effect between Williams and Brokke when Brokke denies ever seeing the signs which Williams claims were up in his premises on the date of the transaction. Brokke further testified to having no conversations with Williams regarding the title of the camera. That testimony conflicts with Williams' account of having verbally informed Brokke that the title could not be guaranteed. The trial court found that Williams had a duty to deliver clear title to the property, that he could not do so because it was stolen and that simply placing "as is" signs in his store does not defeat that duty nor relieve him of liability for defects. We agree. The trial court addition- ally found that it violates the public policy of this state to allow pawnbrokers to profit from the sale of stolen prop- erty. Montana law as written by our legislators and found in the UCC supports that conclusion. Williams fails to convince this Court that the trial court's judgment was an abuse of discretion and not based on substantial credible evidence. Davis v. Sheriff (Mont. 1988), 762 P.2d 221, 45 St.Rep. 1783. Brokke is entitled to a refund of the $89.95 paid to Williams plus his costs in this action as awarded by the District Court and his costs on appeal. Judqmen t a f f i. rmed . We concur: clf+iLAd J t s c e s , . -

January 5, 1989

dcbc1333-d358-4a5d-91ab-0f376f2cf975

Lee v. Traxler

2016 MT 292

DA 15-0716

Montana

Montana Supreme Court

DA 15-0716 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 292 ROBERT LEE, JOHN HAGMAN, and MATTHEW FLESCH, Plaintiffs and Appellants, v. BUCK E. TRAXLER, INDEPENDENT-OBSERVER, INC., a Montana corporation, JASON KORST, and the City of Conrad, a municipality organized under the laws of the State of Montana, Respondents and Appellees. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Pondera, Cause No. DV 14-27 Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellants: Luke Casey, Lee Law Office PC, Shelby, Montana For Appellees: Robert B. Pfennigs, Mark T. Wilson, Jardine, Stephenson, Blewett & Weaver PC, Great Falls, Montana Submitted on Briefs: August 10, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 15-0716 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Appellants Robert Lee, John Hagman, and Matthew Flesch allege Appellees Buck E. Traxler and Independent-Observer, Inc., published defamatory statements about the group concerning an incident at a rest area northeast of Conrad, Montana. All parties filed motions for summary judgment on the issue of whether the publication constituted defamatory libel. The District Court determined that the statements were not defamatory and granted summary judgment in favor of Traxler and Independent-Observer, Inc. Lee, Hagman, and Flesch appeal. We affirm. ISSUE ¶2 We restate the issue on appeal as follows: Did the District Court err in granting summary judgment in favor of Defendants Traxler and the Independent-Observer? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On February 1, 2013, Appellants Robert Lee, John Hagman, Matthew Flesch, and another companion stopped at the Montana Department of Transportation Conrad Rest Area on Interstate 15. Ginny Winters, employed as the custodian of the Rest Area, was in the equipment room when the four men entered the premises. Fearing for her safety due to their loud and boisterous behavior, she locked herself in the equipment room and called the authorities. Conrad City Police Sergeant Jason Korst and two deputies from the Pondera County Sheriff’s Office responded to the call. ¶4 At the Rest Area, Korst documented the following evidence: a beer can and spilled beer on the floor of one of the restrooms; urine covering the toilet and floor of a 3 restroom; stab marks on the windowsill presumably from a pencil; the suggestion box pencil and notepad, with pages torn out and scattered, on the floor of the Rest Area lobby; and a drawing of a naked female on one of the window dividers. Winters confirmed Korst’s statements in her deposition, stating that she was able to observe through a vent one of the men throw a beer can into a restroom and one of the men drawing a picture of a naked woman on the window sill, and that, once the group had left the Rest Area, she noticed deep scratches on the wall of the Rest Area that weren’t there prior to the group’s arrival. ¶5 The Dissent takes issue with our statement of the material facts in this case, arguing that Plaintiffs have consistently maintained that the statements made by the Independent-Observer were false. However, Lee and Hagman both admitted in deposition that a member of the group had thrown a beer can into one of the restrooms. We also note that both Lee and Hagman admitted in deposition that they could not confirm or deny whether one of the group members had drawn a naked woman on the window divider, or scratched and punched holes on the window sills. Further, Flesch admitted in deposition that because of his level of intoxication, he could neither confirm nor deny whether he drew a naked woman on the window divider, or scratched and punched holes on the window sills. Finally, neither Flesch, Lee, or Hagman could confirm or deny whether a member of the group had urinated on the floor of the Rest Area. Therefore, their protests set forth in their Reply Brief, noted in ¶ 31 of the Dissent, are belied by the record. 4 ¶6 Over the course of the two months following the Rest Area incident, the local Conrad newspaper, the Independent-Observer, would publish a total of three articles relating to the incident at the Rest Area. Due to their importance to the underlying cause of action, we briefly describe each article. The First Publication – February 7, 2013 ¶7 Six days after the Rest Area incident, the Independent-Observer published a brief article entitled “Vandals hit new I-15 rest area.” The February 7th Article was three sentences in length: Friday evening four individuals, allegedly from Shelby, were caught vandalizing the new rest area just off the north exit off of I-15. Charges have not yet been filed but are expected to be before the week is over. The I-O will have more information as soon as it becomes available. The Second Publication – February 28, 2013 ¶8 Almost a month after the Rest Area incident, the Independent-Observer published an editorial, written by Traxler, the editor of the Independent-Observer, setting forth Traxler’s version of the events that occurred on February 1st. The February 28th Article began by stating, “It’s been a month now since the four ‘gentlemen’ allegedly from Shelby, and I use that with a great deal of sarcasm, stopped in at the new rest area just off of I-15.” The article continued on in a manner consistent with colorful editorials; in relevant part, the article related certain statements that could be construed as factual assertions: One of the young men allegedly involved, rifled a beer can into a restroom. Along with that, the perpetrators allegedly relieved themselves not in the appropriate place. . . . 5 Others in the group took pencils from the suggestion box and drew naked women on the window sills, and scratched and punched holes in various places[.] The Third Publication – March 21, 2013 ¶9 Seven weeks after the Rest Area incident, the Independent-Observer published a third article, entitled “Two men charged in vandalism.” The March 21st Article reads in full: Two of the four men from Shelby have been charged in the vandalism case at the new state-of-the-art rest stop just off I-15. Matthew Flesch, age 21, was charged with disorderly conduct and criminal mischief and Robert Lee, age 38, was charged with disorderly conduct in Conrad City Court. Both men have entered a plea of not guilty. Court dates have not yet been set. Chief Gary Dent commented that, “There was just no way to stretch this because they were there,” this in reference to being charged with accountability. Notably, Hagman was not identified in the March 21st Article. ¶10 Additionally, we note that each article briefly mentioned vandalism. The First Article stated that “four individuals . . . were caught vandalizing the new rest area.” The Second Article was more detailed, commenting on the actions of the group and accusing them of “not thinking at all that they are causing the taxpayers’ dollars to have the area cleaned up by their works of vandalism,” and continuing on, stating, in relevant parts, Vandalism is an offense that takes place when a person(s) defaces property, other than their own, without permission. The act of vandalism is a crime against property that is punishable by jail time, monetary fines, or both. There is nothing in the MCA codes that says, “a little vandalism is no big deal.” There is no such thing as a little vandalism. Vandalism laws have been put in the books to prevent the destruction of property both public and private. However, some people must feel that it doesn’t apply to them, and as such they can go around and say, “It’s no big deal, we got away with it in Conrad.” 6 The Third Article began by noting that “[t]wo of the four men from Shelby have been charged in the vandalism case.” ¶11 In response to the articles, Appellants filed a complaint in the Ninth Judicial District Court, Pondera County, against Traxler and Independent-Observer, Inc., on the grounds that the published articles constituted defamatory libel and, not relevant to this appeal, against the City of Conrad and Jason Korst for malicious prosecution. ¶12 Traxler and the Independent-Observer moved for summary judgment on the Appellants’ claims of defamation, arguing the publications at issue were privileged and true, and that the Appellants had not suffered damages as result of the articles. The City of Conrad moved for summary judgment on the Appellants’ claims of malicious prosecution, arguing that the Appellants had failed to prove all the elements of the claim. The District Court granted both motions and dismissed all claims against the Defendants. Lee, Hagman and Flesch appeal the grant of summary judgment in favor of Traxler and the Independent-Observer. STANDARD OF REVIEW ¶13 We review de novo a district court’s grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839 (citation omitted). DISCUSSION ¶14 In Montana, the elements of a defamation claim are defined by statute. See §§ 27-1-801 to 27-1-821, MCA. Defamation is effected by either libel or slander. Section 27-1-801, MCA. Libel is defined as a “false and unprivileged publication by 7 writing, printing, picture, effigy, or other fixed representation that exposes any person to hatred, contempt, ridicule, or obloquy or causes a person to be shunned or avoided or that has a tendency to injure a person in the person’s occupation.” Section 27-1-802, MCA. The statute creates a three-part requirement for actions involving defamatory libel: first, the publication must be false; second, the publication must not be privileged; and third, the publication must be defamatory, in that it exposes the person to “hatred, contempt, ridicule, or obloquy,” or causes “a person to be shunned or avoided,” or has a tendency to injure the person in his or her occupation. ¶15 The foregoing statutory scheme must be interpreted in light of Article II, Section 7, of the Montana Constitution, which provides, in relevant part, “[i]n all suits and prosecutions for libel or slander the truth thereof may be given in evidence; and the jury, under the direction of the court, shall determine the law and the facts.” Mont. Const. art. II, § 7. This provision places the heart of any determination regarding defamatory libel directly within the province of the jury, subject only to determinations envisioned by the phrase “under the direction of the court.” While we have held that “‘there is no absolute prohibition against granting summary judgment in libel cases,’” we emphasize that, due to the unique nature of cases involving libel, a district court should take particular care when evaluating such motions. Hale v. City of Billings, 1999 MT 213, ¶ 15, 295 Mont. 495, 986 P.2d 413 (quoting Williams v. Pasma, 202 Mont. 66, 72, 656 P.2d 212, 215 (1982)). ¶16 In the instant case, the District Court’s order granting the Appellees’ Motion for Summary Judgment appears to be based on two theories: first, that the articles 8 themselves do not sufficiently identify the Appellants as to be actionable; and second, the fact that the community apparently knew about the incident prior to the publication of the articles precludes the articles from having a defamatory effect. However, in making its determination, the District Court did not analyze, and made only a passing reference to, the law defining defamatory libel in Montana. As a result, the skeletal nature of the District Court’s order prevents this Court from determining whether the order is supported under the law of defamatory libel. In order to remedy this deficiency, we review the pleadings and documents filed in this case and undertake our own analysis to determine whether the grant of summary judgment was appropriate. “‘Our de novo standard of review of summary judgment decisions allows us to review the record and make our own determinations regarding the existence of disputed issues of fact and entitlement to judgment as a matter of law.’” Chapman v. Maxwell, 2014 MT 35, ¶ 12, 374 Mont. 12, 322 P.3d 1029 (quoting Wurl v. Polson School District No. 23, 2006 MT 8, ¶ 29, 330 Mont. 282, 127 P.3d 436). ¶17 Did the District Court err in granting summary judgment in favor of Traxler and Independent-Observer? ¶18 In order to properly address a motion for summary judgment in a case involving defamatory libel, we first determine whether the publication is defamatory. McConkey v. Flathead Elec. Coop., 2005 MT 334, ¶ 44, 330 Mont. 48, 125 P.3d 1121 (stating that the determination of whether a statement is defamatory is preliminary and within the province of the court). The facts of the instant case require a three-part analysis to determine whether the publication was defamatory: (1) whether the communication is 9 capable of bearing a particular and defamatory meaning; (2) whether the defamatory publication was aimed specifically at the person claiming injury; and (3) as required in the instant case, whether the defamatory publication meets the criteria to constitute libel per se. ¶19 Second, if the publication is defamatory, we determine whether the publication is privileged. See McLeod v. State, 2009 MT 130, ¶ 21, 350 Mont. 285, 206 P.3d 956 (citing Hale, ¶ 35). Third, if the publication is both defamatory and unprivileged, the inquiry turns to whether the publication is true or false. ¶20 In Hale v. City of Billings, we adopted guidance from the Restatement (Second) of Torts, noting that in cases involving libel “the court, as a preliminary finding, must determine ‘whether a communication is capable of bearing a particular meaning; and . . . whether the meaning is defamatory.’” Hale, ¶ 17 (quoting Restatement (Second) of Torts § 614 cmt. a (1979)). In order to be defamatory, we have held that the words at issue “must be of such nature that the court can presume as a matter of law that they will tend to disgrace and degrade [the plaintiff] or cause him to be shunned and avoided. It is not sufficient, standing alone, that the language is unpleasant and annoys or irks him, and subjects him to jests or banter, so as to affect his feelings.” Ray v. Connell, 2016 MT 95, ¶ 11, 383 Mont. 221, 371 P.3d 391 (quoting McConkey, ¶ 45). This is a stringent test; “claims of defamatory libel may not be based on innuendo or inference,” or “sarcastic or hyperbolic statements.” McConkey, ¶¶ 47-48. ¶21 Under the structured analysis laid out above, we would normally first determine whether a publication was defamatory, and if so, whether the publication was privileged, 10 and only if we found that a privilege did not exist would we proceed to examine the truth or falsity of the publication to determine whether the question should be put before a jury. In the interest of brevity, however, we move to the third element of the test, as it is dispositive in this case. ¶22 Section 27-1-802, MCA, requires that a publication be false in order to qualify as libel. While we have previously held that the truth or falsity of the publication “is a determination for the jury alone to make,” we have consistently stated that if the evidence is “so overwhelming that any other conclusion would be unreasonable,” it is within the court’s discretion to make the proper finding. Hale, ¶¶ 17-18. Further, we have stated that, when determining whether summary judgment is appropriate in a case involving libel, the movant “must establish the absence of genuine issues of material fact relating to the truthfulness of the publications in question.” Hale, ¶ 13. ¶23 While we have previously held that there is not an “absolute prohibition against granting summary judgment in libel cases,” we reiterate now that “[u]nless the evidence is so overwhelming that any other conclusion would be unreasonable, the issue of whether the statements were true or false is a determination for the jury alone to make.” Hale, ¶¶ 15, 18 (internal quotations omitted). ¶24 In Hale, we interpreted this rule as requiring a court to determine whether the evidence was so overwhelming that “the statements were ‘essentially truthful,’ so as to preclude a jury from determining otherwise.” Hale, ¶ 21. In that case, the Billings Police had provided information to a third party, who broadcasted “Hale’s name, photograph, physical description, and charge against him on TCI’s ‘Yellowstone County’s Most 11 Wanted’ cable television program.” Hale, ¶ 7. The broadcast indicated that persons shown were “fugitives” against whom a valid arrest warrant was in effect, that viewers should not attempt to apprehend any of the people as they “may be armed and dangerous,” that viewers should call the Billings Police with any information regarding “these fugitives,” and that all persons depicted on “Yellowstone County’s Most Wanted” program were presumed innocent until proven guilty in a court of law. Hale, ¶ 7. This Court determined from the record that Hale was “neither a ‘most-wanted’ suspect, nor a ‘fugitive’ from justice,” noting that Hale’s name was included in the broadcast only after being “chosen randomly from the three-to-five thousand outstanding arrest warrants on file with Billings Police and that his whereabouts were known at all times following the issuance of the arrest warrant.” Hale, ¶ 21. Faced with these facts, we concluded that there was not overwhelming evidence that the statements were essentially truthful, and therefore truthfulness would have to be determined by a jury. Hale, ¶ 21. ¶25 Here, the concerns present in Hale do not exist given the testimony regarding the Rest Area contained in the record. The First and Third Articles were brief and contained only true factual statements. The Second Article stated, in relevant part, It’s been a month now since four ‘gentleman’ allegedly from Shelby . . . stopped in at the new rest area just off of I-15. . . . One of the young men allegedly involved, rifled a beer can into a restroom. Along with that, the perpetrators allegedly relieved themselves not in the appropriate place. . . . Others in the group took pencils from the suggestion box and drew naked women on the window sills, and scratched and punched holes in various places[.] 12 ¶26 The record reflects that Lee, Flesch, Hagman, and a fourth companion stopped at the rest area together, and that Officer Korst recovered a beer can from the bathroom, noticed urine on the floor of the Rest Area, and documented a crude drawing as well as holes that had been stabbed in the window sills. Appellants do not contest the facts relating to what occurred at the Rest Area, nor do they contest that the conduct at issue occurred while they were at the Rest Area. Instead, they argue that the articles imputed the actions to all group members, when only certain members of the group might have participated in the conduct at issue. Notably, none of the articles pinned specific instances of the alleged misconduct on Hagman, Flesch, or Lee. Instead, the articles refer to the general involvement of four individuals. The possibility that certain individuals participated in the conduct to differing extents does not render the statements made in the articles untrue. In light of the fact that Officer Korst and Ginny Winters documented facts tending to corroborate even the vibrant description contained within the Second Article, we find that it would be unreasonable for a jury to find that the statements contained within the three articles were anything but “essentially truthful,” and that Traxler and the Independent-Observer have satisfied their burden of establishing the absence of a genuine issue of material fact relating to the truthfulness of the publication. ¶27 In conclusion, Hagman, Lee, and Flesch’s defamatory libel allegations fail because, after a review of the record, we determine that the publication was not false within the meaning of our precedent regarding libel. 13 CONCLUSION ¶28 For the reasons set forth in this Opinion, we determine that the three articles published in the Independent-Observer do not constitute defamatory libel. Therefore, Traxler and the Independent-Observer were entitled to summary judgment as to each of the three Appellants. Because we affirm that the publications do not constitute defamatory libel, we do not reach the issue of whether any of the three articles were protected by the First Amendment. ¶29 Accordingly, we affirm the decision of the District Court. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice McKinnon, dissenting. ¶30 The Court creates an exception to the “structured analysis,” Opinion, ¶ 21, which our jurisprudence has long recognized and carefully employed in defamation proceedings. In doing so, the Court obscures distinctions between the functions of a jury and a judge and decides the quintessential issue of fact—truthfulness of the statements— which is committed to the sound discretion of the jury. ¶31 To begin, I disagree with the Court’s characterization of Appellants’ arguments: that is, that the statements are false because they arise from the possibility that certain 14 individuals participated in the criminal conduct to differing extents. Opinion, ¶ 26. We state: “Appellants do not contest the facts relating to what occurred at the Rest Area, nor do they contest that the conduct at issue occurred while they were at the Rest Area.” Opinion, ¶ 26. The Court makes inferences and judgments regarding the falsity of the statements which are inappropriate and should be made by a jury. There is little doubt that the particular facts underlying these proceedings are convoluted and far from clear. Indeed, this is likely the reason the charges were ultimately dismissed. Nonetheless, that is precisely why falsity of the statements should be left to the jury’s judgment and decision. Nothing in the record establishes what any particular individual did; thus, this Court takes a giant leap when it concludes otherwise by declaring the statements were true. Had the record overwhelmingly and definitively established the truthfulness of the statements, then perhaps the Court’s actions would be more reasonable, provided other aspects of the “structured analysis” had been followed. However, the inability to “confirm or deny” does not establish as a matter of law, or overwhelmingly, the truthfulness of the statements. Moreover, Appellants have consistently maintained that the statements made by the Independent-Observer were false. More specifically, Flesch denies defacing any wall or windowsill at the rest area in any way and Hagman and Lee both deny having witnessed such conduct. Likewise, evidence on record does not support that any of the Appellants scratched or punched holes in the walls or windowsills. Finally, Winters testified that while she cleaned the rest area afterward, she did not find urine “in an inappropriate place.” Appellants’ Reply Br., pp. 10–11. The Independent-Observer called Appellants “criminals” and “vandals” and accused Appellants of physically destroying the Rest 15 Area. Although in the context of the criminal investigation Appellant elected to remain silent, Appellants aver in the instant proceeding that these statements are not true. Appellants denied committing acts of vandalism and obstruction of justice, which the Independent-Observer accused them of committing. Indeed, the City of Conrad ultimately dismissed all charges. Importantly, none of the individuals, as of the publishing dates of the articles, had been charged with a crime. The Court fails to appreciate, first, that Appellants deny the Independent-Observer’s statements they were “criminals” and “vandals,” that they defaced the walls and urinated on the floors, and that they were “breakers of the law.” Second, the statements accused Appellants of having committed crimes prior to Appellants being charged with any offenses. As such, the statements contained undisclosed facts which Appellants maintain could be proven false. While I appreciate the Court’s eagerness to conclusively determine that the statements were true, the evidence of their truthfulness is not so overwhelming and clear that a jury should be precluded from determining which of the two permissible views ought to be accepted. ¶32 Montana’s Constitution provides that “[i]n all suits and prosecutions for libel or slander the truth thereof may be given in evidence; and the jury, under the direction of the court, shall determine the law and the facts.” Mont. Const. art. II, § 7, (emphasis added) In Griffin v. Opinion Publishing Co., 114 Mont. 502, 512, 138 P.2d 580, 586 (1943), overruled on other grounds by State v. Helfrich, 277 Mont. 452, 922 P.2d 1159 (1996), we explained the meaning of “under the direction of the court” and concluded that “the decisions clearly show that the function of the court and jury is not greatly different in the 16 trial of libel from what it is in other cases.” We held that “it is for the court and not the jury to pass upon demurrers to the complaint; upon the admissibility of the evidence; upon motions for nonsuit; upon motions for directed verdict; upon motions for a new trial and upon motions to set aside verdicts or vacate judgments.” Griffin, 114 Mont. at 512, 138 P.2d at 586.1 Accordingly, unless “the evidence is ‘so overwhelming that any other conclusion would be unreasonable,’ the issue of whether the statements were true or false is a determination for the jury alone to make.” Hale, ¶ 18. I do not find the evidence of the truth or even substantial truth of the Independent-Observer’s statements and 1 The Court in Griffin explained, The law is as stated in Diener v. Star-Chronicle Pub. Co., 230 Mo. 613, 132 S.W. 1143, 1145, 33 L. R. A. (n. s.) 216, 217: “A demurrer lies to a petition sounding in tort for libel the same as to any other petition, if certain conditions are present—this, in spite of the constitutional provision (Article 2, sec. 14, of the Bill of Rights [Ann. St. 1906, p. 135]) that, in libel, ‘the jury, under the direction of the court shall determine the law and the facts.’ To illustrate: If A sue B for libel without matter of innuendo or inducement on the theory that the words published are libelous per se, and they are not libelous per se, the sufficiency of A’s petition may be challenged by demurrer, and is for the court. Again, if A sue B for libel for words not actionable per se, and the pleader, claiming they bear a hidden or latent libelous meaning because of certain extrinsic circumstances, sets such extrinsic circumstances forth by prefatory allegations by way of inducement and follows up the libelous words by an innuendo applying the words to the matter so pleaded by way of inducement, in such cases, such innuendo should not be a forced and unnatural construction and application of the words, but a reasonable and natural construction and application of them. A vice of that sort can be reached by demurrer, and is for the court. Again, if the words of the libel are ambiguous, and the pleader can only put a libelous tang or edge upon them by a wholly unnatural and forced construction and tries to do so by an innuendo, that vice can be reached by demurrer, and is for the court. So, if the petition be not challenged by way of demurrer, in limine, and the case be fully developed on trial, and if under the pleadings and evidence no case is made the court may take the case from the jury by a peremptory instruction in the nature of a demurrer. So far as above indicated, libel suits, though sui generis (in a sense), are subject to those rules of practice found wise and useful in administering justice generally in the courts.” Griffin, 114 Mont. at 512–13, 138 P.2d at 586. 17 undisclosed facts to be so overwhelming that it should be removed from consideration by a jury. In my opinion, the Court oversteps its role in concluding otherwise. ¶33 Perhaps a reminder of what the Restatement (Second) of Torts (1965) provides would be helpful. Section 614 explains: (1) The court determines (a) whether a communication is capable of bearing a particular meaning, and (b) whether that meaning is defamatory. (2) The jury determines whether a communication, capable of a defamatory meaning, was so understood by its recipient. Pursuant to this rule, the determination of whether the communication is capable of bearing the meaning ascribed to it by the plaintiff, and whether the meaning so ascribed is defamatory, is for the court to decide when reasonable minds cannot differ. If reasonable minds could differ as to the defamatory character of the statements, then the matter is left for decision by a jury. However, if the court decides that no reasonable person could conclude against the plaintiff upon either of these issues, then there is no further question for the jury to decide. If the court determines that the communication is both capable of bearing the meaning in question, and that it is defamatory, “there is then the further question for the jury, whether the communication was in fact understood by its recipient in the defamatory sense.” See Restatement (Second) of Torts, § 614, cmt. B; see also Hale, ¶ 17, McConkey, ¶ 44, Griffin, 114 Mont. at 512, 138 P.2d at 586. ¶34 Applying the foregoing to the issue of whether the District Court correctly granted summary judgment for the Defendants limits the Court’s role to preliminarily deciding whether the communication is capable of bearing the meaning ascribed and whether it is 18 defamatory. I disagree with the Court when it provides an exception to this “structured analysis” long employed in defamation proceedings and decides to begin its inquiry with whether the statements themselves are truthful. Opinion, ¶ 21. It is inappropriate for the Court to first decide whether the statements are true. That question is left for a jury to determine after the court has concluded that the statements may have the ascribed meaning and may be defamatory. ¶35 Thus, the only question with which this Court should be concerned is whether reasonable minds could differ regarding the meaning ascribed by the statements and whether the statements are defamatory. Here, because no special damages were pled in the complaint, the underlying cause of action must be deemed an action for libel per se. In addressing whether statements are defamatory and have the meaning ascribed to them, we have stated that, the defamatory words [must] be construed according to their usual, popular and natural meaning and their common acceptance in society; the words must also be viewed by the court without the aid of special knowledge possessed by the parties concerned; the words must be susceptible of only one meaning and that meaning must be opprobrious; and the words must also be construed in their entirety and with reference to the entire document. Tindal v. Konitz Contracting, 240 Mont. 345, 355, 783 P.2d 1376, 1382 (1989) (citing Wainman v. Bowler, 176 Mont. 91, 94, 576 P.2d 268, 270 (1978)). ¶36 After reviewing the pleadings and record in this case, I would determine that the Second Article published by the Independent-Observer, when viewed without the aid of special knowledge, contains words that are defamatory in their usual, popular and natural meanings, and is subject to only one “opprobrious” meaning. Further, I would determine 19 that the statements contained within the Second Article do not consist entirely of sarcastic or hyperbolic statements. As noted, the “words must also be construed in their entirety and with reference to the entire document.” This rule requires that we consider, in concert, all three of the articles published by the Independent-Observer. This conclusion is in line with our previous decisions in cases involving defamatory libel. See Wainman, 176 Mont. at 95, 576 P.2d at 270 (where this Court considered a series of articles in their entirety in order to find that the statements contained therein were not defamatory). I therefore would determine that the publications at issue are capable of bearing the ascribed meaning and of being defamatory. ¶37 We have also stated that to be defamatory, the “allegedly libelous statements must be aimed specifically at the person claiming injury.” McConkey, ¶ 47; accord Wainman, 176 Mont. at 95–96, 576 P.2d at 270. We have interpreted this rule as requiring that “a plaintiff must show that people in the community other than the plaintiff perceived the statement to refer to the plaintiff . . . . [T]he test is neither the intent of the author nor the recognition of the plaintiff himself that the article is about him, but rather the reasonable understanding of the recipient of the communication.” Granger v. Time, Inc., 174 Mont. 42, 49–50, 568 P.2d 535, 540 (1977) (internal quotations omitted). Particularly relevant to the determination here is the single, common thread with which the articles begin. The articles state, in relevant part: “Friday evening four individuals, allegedly from Shelby, were caught vandalizing the new rest area just off the north exit off of I-15”; “It’s been a month now since four ‘gentlemen’ allegedly from Shelby, and I use that with a great deal of sarcasm, stopped in at the new rest area just off of I-15”; and “Two of four men 20 from Shelby have been charged in the vandalism case at the new state-of-the-art rest stop just off of I-15. Matthew Flesch, age 21 . . . and Robert Lee, age 38.” (Emphasis added.) Read together, I would find that a reader of the three articles could reasonably understand that the articles, as a whole, were aimed at Flesch and Lee. Further, we note that the absence of any reference to Hagman by name illustrates that the articles were not aimed specifically at him. I would find that the defamatory statements, viewed in the context of all three articles, were aimed specifically at Flesch and Lee, but not Hagman.2 ¶38 The foregoing analysis must be interpreted in light of Article II, Section 7, of the Montana Constitution, which places the heart of any determination regarding defamatory libel directly within the province of the jury, subject only to determinations envisioned by the phrase “under the direction of the court.” While we have held that “there is no absolute prohibition against summary judgment in libel cases,” we emphasize that, due to the unique nature of cases involving libel, a district court should take particular care when evaluating such motions. Hale, ¶ 15. In my opinion, the circumstances here are remarkably similar to those in Hale where the plaintiff had been accused of being “most- wanted,” a “fugitive,” and “may be armed and dangerous.” Hale, ¶ 23. This Court determined that “[i]t is apparent from the record that the evidence is not so overwhelming that the statements were ‘essentially truthful,’ so as to preclude a jury from determining otherwise.” Hale, ¶ 21. The record contained evidence that Hale was neither a “most- 2 Our precedent also requires that if we determine the publication is defamatory, we must consider whether the publication is privileged. See McLeod v. State, 2009 MT 130, ¶ 21, 350 Mont. 285, 206 P.3d 956 (citing Hale, ¶ 35). However, the purpose of my dissent is to address the Court’s usurpation of the jury’s role in this defamation proceeding and not to discuss any privilege in making the defamatory statement. 21 wanted” suspect, nor a “fugitive” from justice; and thus the answer to the question of whether the information provided to the defendants was truthful was “far from conclusive.” Hale, ¶ 20. ¶39 I dissent from the Court’s decision to decide an issue of fact—truthfulness of the statements—which should have been submitted to the jury. I also disagree with this Court’s departure from well-reasoned and careful precedent which recognizes a structured analysis and procedure for protecting the distinct roles of the judge and jury in defamation proceedings. /S/ LAURIE McKINNON

November 15, 2016

a2a2a8cc-9913-4945-a21b-41e680b5685e

Flora v. Clearman

2016 MT 290

DA 15-0705

Montana

Montana Supreme Court

DA 15-0705 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 290 MARC FLORA and GLORIA FLORA, Plaintiffs and Appellants, v. THEODORE CLEARMAN, JANEEN SMITHEEN and DENNIS SMITHEEN, GRAYCE TURK and DUANE TURK, BUD MORRIS, JEFFREY JACOBS, KEVIN HENDRICKSON and BRENDA HENDRICKSON, TOMAS GRAMAN, STEFFEN RASILE, and ALTA VISTA PROPERTIES, LLC, a Montana corporation, Defendants, LINDA KOONTZ, DENNIS SHAW, CHAD NEWMAN and NICOLE NEWMAN, KATY WESSEL, JOHN MEHAN, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDV 2011-471 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellants: Colleen M. Dowdall, Jesse C. Kodadek, Worden Thane P.C., Missoula, Montana For Appellees: Timothy W. McKeon, McKeon Doud, P.C., Helena, Montana (Attorney for Kate Wessel and John Mehan) John D. Doubek, Doubek, Pyfer & Fox, LLP, Helena, Montana (Attorney for Linda Koontz and Dennis Shaw) 11/15/2016 Case Number: DA 15-0705 2 Submitted on Briefs: September 7, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 3 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Plaintiffs Marc and Gloria Flora appeal the October 13, 2015, Order by the First Judicial District Court, Lewis and Clark County, granting their preliminary injunction based on a prescriptive easement rather than on an express public easement. The Floras also appeal the Order’s limit that constrains their prescriptive use to light duty and passenger vehicles along the contested easement of Turk Road. We restate the issues on appeal as follows: 1. Whether the District Court erred in granting the Floras a preliminary injunction based on a prescriptive easement claim. 2. Whether the District Court erred by limiting the Floras’ prescriptive easement to the use of passenger vehicles. We affirm in part and reverse in part. PROCEDURAL AND FACTUAL BACKGROUND ¶2 This dispute involves the existence and use of an easement along Turk Road, a private road that runs through multiple properties.1 Turk Road begins at Threemile Road in the southeast quarter of Section 15, Township 11 North, Range 5 West, Principal Montana Meridian, in Lewis and Clark County, and runs northwest across nine parcels before turning onto state land in Section 16, then continuing north into Section 9, which contains several other parcels. Turk Road is not maintained by Lewis and Clark County or any other government entity. All the parties in this case own property accessed via Turk Road, and Turk Road passes through at least portions of the defendants’ properties. This appeal concerns only the Floras’ right to use Turk Road over two properties owned 1 A depiction of the properties involved and the road at issue is attached as Appendix A. 4 by four defendants: the first property is owned by husband and wife Dennis Shaw and Linda Koontz, and the second property is owned by husband and wife John Mehan and Katy Wessel. ¶3 All the properties along Turk Road were originally owned in common by Rosemary and Ray Sewell until the 1970s, when they began to divide and sell tracts of their land. In 1977, the Sewells sold 980 acres to Cecil and Beverly Hill in a contract for deed (Sewell-Hill Deed). The Sewell-Hill Deed provides: “Seller will provide a 60 foot public easement to Section 9.” The Sewell-Hill Deed further provides: “S[ellers] reserve an easement for public use for ingress and egress to the property on the existing roads.” The easement referenced is understood by all parties to be Turk Road. ¶4 Koontz and Shaw (Koontz/Shaw) own the north half of the southeast quarter of the northwest quarter of Section 15, which they purchased in the 1990s. Deeds within the Koontz/Shaw property chain of title provide the property was conveyed “including a 60 foot public road easement on the existing road . . . .” In 2003, Shaw rerouted a portion of Turk Road from his property onto the neighbors’ property to the east. ¶5 Mehan and Wessel (Mehan/Wessel) own the northwest quarter of the northwest quarter of Section 15, which they purchased in 2008. The deeds within the Mehan/Wessel property chain of title and their title insurance policy state their property was conveyed “subject to the existing sixty (60) feet [sic] right of way easement of record.” However, neither the Mehan/Wessel warranty deed nor the deed of their predecessor in interest contains information regarding an easement or covenant. 5 ¶6 The Floras own the southwest quarter of Section 10 that sits directly north of and shares a property line with the Mehan/Wessel property. In 1972, the Sewells first sold a parcel in Section 10 that, combined with other parcels they later sold, was purchased by the Floras in 2000. The Floras constructed a home and moved to their property in 2005. ¶7 The dispute over the use of Turk Road began in 2009, after Mehan/Wessel purchased their property. The Floras originally accessed their property from Redtail Ridge Road, which meets Turk Road on a parcel at the eastern edge of Section 9. In 2009, the Floras purchased an easement from their neighbor, Steffen Rasile, and constructed a new driveway that connects to Turk Road and parallels the eastern Mehan/Wessel property line. The Floras’ agents and invitees also have used Turk Road to access the Floras’ property in Section 10. Beginning in 2009, Levi Cheff performed logging operations on the Floras’ property in Section 10, and other properties in Section 17. The logging operations cleared dead and dying trees, and required Cheff to transport heavy machinery to the job sites and use large logging trucks along Turk Road. Because the Floras believe they have a right to use Turk Road, they used it to access their property from 2000 until 2012, when they moved out of the area during this pending controversy. Koontz/Shaw and Mehan/Wessel contest the Floras’ right to use the road as it crosses their respective properties. ¶8 In attempts to stop others from using Turk Road, Koontz/Shaw and Mehan/Wessel removed existing road signs, dug a ditch across the road, and blocked the road with debris, dirt, snow, and rudimentary gates and fences. Mehan brandished and fired pistols as the Floras and others used Turk Road to cross the Mehan/Wessel property. In 6 November 2010, after construction of the Floras’ new driveway on the Rasiles’ property to the east of the Mehan/Wessel property, Mehan and Shaw placed straw bales across the driveway and covered them in water to create an ice berm, making the driveway unplowable and unusable for eight days. Mehan also constructed a snow fence on his property that caused snow to accumulate on the Floras’ new driveway. ¶9 On May 2, 2011, the Floras sought a declaratory judgment that they have legal access along Turk Road as it passes through the Koontz/Shaw and Mehan/Wessel properties pursuant to an express easement reserved within the Sewell-Hill Deed and the Koontz/Shaw and Mehan/Wessel properties’ chains of title. In November 2012, the Floras moved for summary judgment on all claims against Koontz/Shaw, which the District Court denied by concluding that the documents presented did not establish that the Floras owned an express easement across the Koontz/Shaw property under an easement appurtenant theory. Further, the District Court held that it could not reach a conclusion by clear and convincing evidence that there are no genuine issues of material fact to establish a prescriptive easement. ¶10 In January 2014, the Floras submitted a consolidated motion for partial summary judgment against Mehan/Wessel and renewed partial summary judgment against Koontz/Shaw. The District Court heard oral argument on April 23, 2014. On June 27, 2014, while the summary judgment motion was pending, the Floras moved for a temporary restraining order and preliminary injunction to enjoin Koontz/Shaw and Mehan/Wessel from interfering with the Floras’ access along Turk Road. The District 7 Court declined to issue a temporary restraining order and held a hearing on the preliminary injunction. ¶11 On August 27, 2015, before ruling on the preliminary injunction, the District Court granted the Floras’ motion to take judicial notice of Judge Seeley’s May 14, 2014 Final Judgment in another case involving the use of Turk Road. In that action, Judge Seeley concluded: “[A]n express sixty-foot road easement exists across the [Mehan/]Wessel Property due to the deeds within the chain of title to the [Mehan/]Wessel Property. The express easement allows [the plaintiffs] Taylor and Dickerson use of Turk Road to access the Taylor and Dickerson property.” The District Court then denied the Floras’ motion for partial summary judgment, concluding there remained genuine issues of material fact as to whether the Sewells intended to create a “public easement” along Turk Road through the Sewell-Hill Deed, and that the Floras are strangers to the Sewell- Hill Deed and cannot claim rights to an express easement under it. ¶12 On October 13, 2015, the District Court granted the Floras a preliminary injunction, enjoining Koontz/Shaw and Mehan/Wessel from blocking the Floras’ use of Turk Road across their properties because the Floras laid out a prima facie case for a prescriptive easement. However, the District Court concluded “in order to minimize potential damage, the scope of the injunction must be limited” to light-duty passenger vehicles or trucks. The Floras appeal the District Court’s reasoning basing the preliminary injunction on a prescriptive easement theory and not on an express public easement theory. The Floras also appeal the District Court’s limitation on the easement to passenger vehicles. 8 STANDARDS OF REVIEW ¶13 An order granting, dissolving, or refusing to grant an injunction is immediately appealable, notwithstanding that the merits of the controversy remain to be determined. M. R. App. P. 6(3)(e). Because of the high degree of discretion vested in the district courts to maintain the status quo, the standard for reviewing the grant of a preliminary injunction is a “manifest abuse of discretion.” Shammel v. Canyon Res. Corp., 2003 MT 372, ¶ 12, 319 Mont. 132, 82 P.3d 912. We only disturb a district court’s decision regarding injunctive relief with a showing of a manifest abuse of discretion. Sandrock v. DeTienne, 2010 MT 237, ¶ 13, 358 Mont. 175, 243 P.3d 1123. “A ‘manifest’ abuse of discretion is one that is obvious, evident or unmistakable.” Shammel, ¶ 12 (citations omitted). We review a district court’s conclusions of law to determine whether they are correct. Sandrock, ¶ 13. DISCUSSION ¶14 1. Whether the District Court erred in granting the Floras a preliminary injunction based on a prescriptive easement claim. ¶15 The Floras argue the District Court erred by granting their motion for a preliminary injunction on the basis of their prima facie showing of a prescriptive easement rather than an express public easement. In their motion for a temporary restraining order and preliminary injunction, the Floras requested that the District Court issue a preliminary injunction barring Koontz/Shaw and Mehan/Wessel from obstructing, threatening, harassing, or otherwise interfering in any way with their access on Turk Road pending the outcome of the litigation. The Floras’ motion argued that the public 9 has an express easement over the Koontz/Shaw and Mehan/Wessel properties and that the Floras have prescriptive easements over the Koontz/Shaw and Mehan/Wessel properties. According to the Floras, there are no disputed facts, and the language in the Sewell-Hill Deed expressly granted an easement to the public, particularly when considered with evidence that demonstrates the Sewells undertook a common development scheme to divide and sell their property in Sections 9, 10, and 15. See Broadwater Dev., L.L.C. v. Nelson, 2009 MT 317, ¶ 37, 352 Mont. 401, 219 P.3d 492; Mary J. Baker Revocable Trust v. Cenex Harvest States, Coops., Inc., 2007 MT 159, ¶ 19, 338 Mont. 41, 164 P.3d 851. ¶16 The District Court granted the following relief requested by the Floras: “Wessel, Mehan, Koontz, and Shaw are enjoined from interfering with the Floras’ use of Turk Road to access their property pending the outcome of this litigation.” The District Court held the Floras laid out a prima facie case that they are entitled to a prescriptive easement along Turk Road as it crosses the Koontz/Shaw and Mehan/Wessel properties, granting the Floras a preliminary injunction under § 27-19-201(1), MCA. In other words, the District Court granted the Floras the relief they sought, just not on the basis that they preferred it to be granted. ¶17 The Floras contend the District Court implicitly ruled against their express public easement claim by granting their preliminary injunction based on a prescriptive easement claim. We disagree. While the District Court concluded the Floras have laid out a prima facie case for a prescriptive easement, the preliminary injunction order is silent as to the Floras’ express public easement claim. This is entirely consistent with the District 10 Court’s order denying summary judgment on the Floras’ express public easement claim on the basis that there remained genuine issues of material fact. That order is not before us. The District Court’s summary judgment order was not certified by the District Court pursuant to M. R. Civ. P. 54(b). Therefore, the Floras’ express public easement claim is not before us on appeal. M. R. App. P. 6(6) (“[A] district court may direct the entry of final judgment as to an otherwise interlocutory order or judgment, only upon an express determination that there is no just reason for delay, pursuant to M. R. Civ. P. 54(b).”); see Kohler v. Croonenberghs, 2003 MT 260, 317 Mont. 413, 77 P.3d 531. ¶18 The District Court granted the Floras’ requested relief, and enjoined Koontz/Shaw and Mehan/Wessel from interfering with the Floras’ use of Turk Road to access their property pending the outcome of this litigation. Our review finds the record accurately reflects the District Court’s findings of fact and conclusions of law regarding the Floras’ establishment of a prima facie case of a prescriptive easement along Turk Road. We conclude the District Court did not manifestly abuse its discretion in granting a preliminary injunction based on the Floras’ prescriptive easement claim. ¶19 2. Whether the District Court erred by limiting the Floras’ prescriptive easement to the use of passenger vehicles. ¶20 The Floras contend the District Court’s limit on their use of Turk Road to passenger vehicles is a manifest abuse of discretion because their prescriptive use evidenced in the record does not support such a limit. Koontz/Shaw and Mehan/Wessel argue the limit to passenger vehicles prevents further damage to Turk Road pending the outcome of the litigation. 11 ¶21 The purpose of a preliminary injunction is to prevent further injury or irreparable harm pending an adjudication on the merits. Yockey v. Kearns Props., L.L.C., 2005 MT 27, ¶ 18, 326 Mont. 28, 106 P.3d 1185 (citing Knudson v. McDunn, 271 Mont. 61, 65, 894 P.2d 295, 297-98 (1995)). In granting a preliminary injunction, the district court should decide whether a sufficient case was made to warrant the preservation of the status quo until trial. Yockey, ¶ 18. “Upon the requisite showing, a preliminary injunction is issued to maintain the status quo pending trial, which has been defined as ‘the last actual, peaceable, noncontested condition which preceded the pending controversy.’” Sandrock, ¶ 16 (citations omitted). Under § 70-17-106, MCA, the extent of an easement is determined by the nature of the enjoyment by which it was acquired. ¶22 The District Court concluded that the Floras made a prima facie case for a prescriptive easement along Turk Road. However, in granting the preliminary injunction, the District Court limited the scope of the use to passenger vehicles after making findings of undisputed fact that support use of heavy equipment, including Cheff’s use of Turk Road since 2009 to transport heavy equipment for logging operations to the Floras’ property in Section 10 and other properties in Section 17. Neither Koontz/Shaw nor Mehan/Wessel rebutted the evidence of use by trucks and heavy equipment. The District Court’s preliminary injunction as ordered has the effect of altering the status quo by limiting use of Turk Road to passenger vehicles and diminishing the Floras’ ability to maintain their property. ¶23 The last peaceable, noncontested condition in this case entailed the Floras using Turk Road to access their property by passenger vehicles as well as the Floras’ agents 12 using Turk Road to access the Floras’ property for maintenance with large trucks and heavy equipment. See Sandrock, ¶ 16. The established status quo would then be use by the Floras and their agents that includes use beyond light duty passenger vehicles. The extent of the easement on Turk Road includes the use of large trucks and heavy equipment by prescription. We hold that the District Court’s conclusion restricting the Floras’ use of Turk Road to light duty vehicles is incorrect and a manifest abuse of discretion. We therefore reverse on this issue. CONCLUSION ¶24 We affirm the District Court’s decision that the Floras are entitled to a preliminary injunction based on a prescriptive easement. We reverse the District Court’s decision restricting the Floras’ use along Turk Road to light duty and passenger vehicles, and remand to the District Court for further proceedings consistent with this Opinion. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE 13 APPENDIX A: Turk Road Area Map Mike Crites State of Montana 1 0 ,v o4s R es 4vy Mehan/ Wessel Floras' onginal driveway Elora • 1 Floras' new driveway 15 Koontz/ Shaw 815 Turk a pe,a 1 • R

November 15, 2016

a501e87f-19d9-4740-8824-660f7180d88f

State v. Patterson

2016 MT 289

DA 15-0734

Montana

Montana Supreme Court

DA 15-0734 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 289 STATE OF MONTANA, Plaintiff and Appellee, v. COREY ALLEN PATTERSON, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 14-444 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Elizabeth L. Griffing, Axilon Law Group, PLLC, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Kirsten H. Pabst, Missoula County Attorney, Mac Bloom, Deputy County Attorney, Missoula, Montana Submitted on Briefs: October 12, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 15-0734 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Corey Allen Patterson (Patterson) appeals from the judgment for conviction of burglary entered against him by the Fourth Judicial District Court, Missoula County, challenging the amount of restitution he was ordered to pay. ¶2 We affirm, and address the following issue: Did the District Court err in determining the amount of restitution? FACTUAL AND PROCEDURAL BACKGROUND ¶3 In September and October of 2013, Patterson and Jesse Alma King (King) broke into storage units in Missoula. They stole firearms, ammunition, gun cases, archery equipment, and other miscellaneous items. Ralph Tracy (Tracy), one of the victims, reported that 16 firearms were stolen. Brian Rogers (Rogers), a second victim, reported 12 firearms were stolen. During the investigation, firearms belonging to Tracy and Rogers were recovered from various pawn shops and from Patterson’s sister, who did not know they were stolen. Patterson and King were each charged with two counts of burglary.1 ¶4 Plea agreements were discussed, but were not agreed upon. On May 5, 2015, King and Patterson each entered open guilty pleas on two counts of burglary. A hearing on restitution was conducted, at which the District Court was advised that the parties had agreed to restitution in the amount of $23,762. A minute entry in the District Court case 1 Patterson’s and King’s cases proceeded together, and they were held jointly and severally liable for $28,592 in restitution. King’s case has also been appealed, but has not yet been briefed. State v. Jesse Alma King, Cause No. DA 15-0735. 3 register regarding the amount of restitution noted the defendants would be jointly and severally liable, but did not include an allocation to particular costs. Following the hearing, the District Court ordered the preparation of a Presentence Investigation Report (PSI), which was filed on September 1, 2015. The PSI proposed a higher restitution amount and included a letter and spreadsheet from Tracy detailing his claims, along with a new $1,300 claim from Cash One Pawn. ¶5 At the sentencing hearing, the parties discussed the additional $1,300 claim from Cash One Pawn. Patterson questioned the $1,300 claim and pointed out that a restitution amount had previously been determined. The State responded that Cash One Pawn’s restitution request was received after the parties had agreed to the $23,762 amount and, because the pleas were open, the additional restitution was a matter of the District Court’s discretion. The District Court expressed a concern that the law required it to consider the request and, ultimately, the parties agreed that the $1,300 was appropriate for restitution. ¶6 Also, during the hearing, an attorney for Tracy asked to be heard. Tracy had not been part of the negotiations between the State and the defense and wanted to present his restitution request. The District Court ruled it would hear the request. Tracy testified and was cross-examined, explaining that he lived in Nevada and had traveled to Montana for the sole purpose of searching for his stolen property. Tracy stated that he had spent a considerable amount of time driving to and checking pawn stores around Montana, including shops in Missoula, Butte, Great Falls, Helena, and Kalispell. Tracy presented a spreadsheet itemizing his claims. It included the amount of time (84 hours) he had spent 4 searching, his lost wages, travel expenses, damage to the firearms, and miscellaneous expenses, totaling $5,039.94, which are challenged on appeal by Patterson.2 ¶7 Patterson objected to Tracy’s restitution request. The sentencing hearing was continued to give the defense additional time to analyze and respond to the restitution requests. At the continued hearing, the District Court concluded that all of Tracy’s requested restitution amounts should be included in the restitution total. As part of his sentence, Patterson was ordered to pay, jointly and severally with King, $28,592 in restitution. ¶8 On appeal, Patterson challenges the restitution ordered for Tracy’s lost wages, damages to the firearms, mileage expenses, and copying costs. STANDARDS OF REVIEW ¶9 A criminal sentence is reviewed for legality. State v. Simpson, 2014 MT 175, ¶ 8, 375 Mont. 393, 328 P.3d 1144 (citing State v. Benoit, 2002 MT 166, ¶ 18, 310 Mont. 449, 51 P.3d 495). We review the imposition of criminal sentences to determine if they are statutorily authorized. State v. Henderson, 2015 MT 56, ¶ 13, 378 Mont. 301, 343 P.3d 566 (citing State v. Thorpe, 2015 MT 14, ¶ 7, 378 Mont. 62, 342 P.3d 5). 2 Tracy’s total request was as follows: $2,520.00 Wages lost while pursuing stolen property $1,500.00 Damage to returned personal property $600.00 Mileage for driving from Nevada to Missoula to search for stolen property $410.00 Mileage for driving around Montana searching for stolen property $9.94 Copying costs $5,039.94 Total 5 Restitution cases create mixed questions of fact and law. Upon appeal, we review these mixed questions de novo. State v. Cerasani, 2014 MT 2, ¶ 11, 373 Mont. 192, 316 P.3d 819 (citing State v. Warclub, 2005 MT 149, ¶ 21, 327 Mont. 352, 114 P.3d 254). Factual findings regarding the measure of restitution are reviewed under the clearly erroneous standard. State v. Passwater, 2015 MT 159, ¶ 9, 379 Mont. 372, 350 P.3d 382 (citing State v. Aragon, 2014 MT 89, ¶ 9, 374 Mont. 391, 321 P.3d 841); State v. Barrick, 2015 MT 94, ¶ 11, 378 Mont. 441, 347 P.3d 241 (citing State v. O’Connell, 2011 MT 242, ¶ 7, 362 Mont. 171, 261 P.3d 1042). Factual findings are clearly erroneous if they are not supported by substantial evidence. Barrick, ¶ 11 (citing O’Connell, ¶ 7). Conclusions of law regarding the measure of restitution are reviewed for correctness. Barrick, ¶ 11 (citing State v. Pritchett, 2000 MT 261, ¶ 18, 302 Mont. 1, 11 P.3d 539). DISCUSSION ¶10 Did the District Court err in determining the amount of restitution? ¶11 Both parties cite to Barrick in support of their arguments. In Barrick, we considered whether the victims’ lost wages incurred in cooperating in Barrick’s prosecution could be properly ordered to be repaid as restitution. Barrick, ¶ 16. Because the unpaid wages were neither an out-of-pocket expense under § 46-18-243(1)(d), MCA, nor a damage that the victims could recover “in a civil action arising out of the facts or events” of the crime under § 46-18-243(1)(a), MCA, we held that the wages were not properly assessed as restitution under § 46-18-243, MCA. In doing so, we analyzed 6 substantive civil law and, based upon the conversion statute,3 concluded that recoverable losses for conversion, an applicable civil claim, included only the value of the converted property and compensation for “the time and money properly expended in pursuit of the property.” Barrick, ¶ 23. We thus denied the claim for lost wages incurred by the victims in cooperating in the litigation of the case. Barrick, ¶ 24. ¶12 Regarding Tracy’s $2,520 lost wages claim, Patterson argues that Barrick did not definitively hold that lost wages incurred in pursuit of converted property are recoverable, but rather noted some uncertainty in the law. Patterson notes that Montana’s conversion statute, § 27-1-320, MCA, was drafted based on the Field Civil Code and that both California and North Dakota have similar statutes also originating from the Field Civil Code, leading to his citation of Gladstone v. Hillel, 250 Cal. Rptr. 372 (Cal. App. 1988) and Harwood State Bank v. Charon, 466 N.W.2d 601 (N.D. 1991). In Gladstone, the conversion victim sought reimbursement of expenses actually incurred in preparation for litigation under Cal. Civ. Code § 3336(2) (LexisNexis 2016), as “fair compensation for the time and money properly expended in pursuit of the property.” The victim’s damages were denied. Similarly, in Harwood, a case we cited in Barrick, the North Dakota Supreme Court was asked to determine if attorney fees could be claimed under 3 Section 27-1-320, MCA, Conversion of personal property. (1) The detriment caused by the wrongful conversion of personal property is presumed to be: (a) the value of the property at the time of its conversion with the interest from that time or, when the action has been prosecuted with reasonable diligence, the highest market value of the property at any time between the conversion and the verdict without interest, at the option of the injured party; and (b) a fair compensation for the time and money properly expended in pursuit of the property. 7 N.D. (2016) Cent. Code § 32-03-23(3), as “a fair compensation for the time and money properly expended in pursuit of property.” The North Dakota Supreme Court held the fees could not be claimed. ¶13 In both Gladstone and Harwood, the expenses and fees requested by the conversion victims were deemed to have been incurred in the litigation against the wrongdoers, not as out-of-pocket expenses incurred to recover the property. Gladstone, 250 Cal. Rptr. at 381 (“The court held ‘[accounting expenses] . . . were incurred in preparation for litigation and not in pursuit of property.’”); Harwood, 466 N.W.2d at 605 (“[T]he phrase ‘time and money properly expended in pursuit of the property’ is not an express authorization of attorney’s fees.”).4 We made the same distinction in Barrick. Barrick, ¶ 23 (“‘[C]ourts have distinguished between time spent in pursuit of converted property,’ which is generally compensable, ‘and time spent in litigation,’ which is generally not compensable.”). This distinction is supported by the plain language of § 27-1-320, MCA, and we concur with the District Court that Tracy’s lost wages, incurred in pursuit of his stolen property, are recoverable in a civil action for conversion, and are properly reimbursable as restitution for pecuniary loss under § 46-18-243(1)(a), 4 Patterson cites Gladstone for the proposition that the Field Civil Code was archaic and that, when enacted, “the Legislature may have contemplated compensation for time spent searching the countryside in search of misappropriated livestock or other chattels.” Gladstone, 250 Cal. Rptr. at 381. Based on this language, Patterson implies the effort and costs expended searching for stolen property may no longer be an appropriate measure of damages for civil conversion. However, we think the North Dakota Supreme Court’s reading of Gladstone and other California decisions is more accurate, and places the Gladstone quote in the appropriate context of the general rule stated by those courts: “California courts say the purpose of the second element of damages for conversion—time spent pursuing the property—is meant to compensate for time spent to recover the actual property.” Harwood, 466 N.W.2d at 605 (emphasis added). 8 MCA. The District Court found that Tracy’s efforts to locate his property were expected and directly related to obtaining his firearms. ¶14 The same rationale applies to Tracy’s mileage and copying costs. Tracy claimed $1,010 for driving to Montana from Nevada, as well as driving around Montana searching for his firearms. Tracy testified that none of this travel would have occurred had he not been directly engaged in pursuing and recovering his property, which the District Court found to be credible. He also claimed $9.94 in copying costs, which he would not have normally incurred. Tracy’s mileage costs were reimbursable as a pecuniary loss under § 46-18-243(1)(a), MCA, and his copying costs under § 46-18- 243(1)(d), MCA. ¶15 Tracy also sought $1,500 in restitution for damages to his recovered property. Tracy testified that his claim for $1,500 was “for [the] degradation and outright abuse of some of my firearms, which were all pristine and basically like new.” Section 27-1-106(2), MCA, states that “[a]n injury to property consists [of] depriving its owner of [its] benefits . . . , which is done by . . . deteriorating . . . it.” Likewise, the conversion statute permits recovery of “the value of the property at the time of its conversion.” Section 27-1-320(1)(a), MCA. The District Court properly ordered this restitution. ¶16 Lastly, Patterson argues Tracy’s claims were not supported by sufficient evidence. Substantial evidence is “more than a mere scintilla of evidence, but may be somewhat less than a preponderance.” Passwater, ¶ 9 (citing Aragon, ¶ 9). As we stated in Passwater, evidence presented in favor of restitution must be substantiated in the record 9 “‘such that a reasonable mind’ could conclude that the award of restitution was warranted,” and that such evidence had been presented there. Passwater, ¶ 15 (citing Aragon, ¶ 19; State v. Coluccio, 2009 MT 273, ¶ 45, 352 Mont. 122, 214 P.3d 1282 overruled in part on other grounds by State v. Kirn, 2012 MT 69, 364 Mont. 356, 274 P.3d 476). In Passwater, the District Court received: 1) a victim impact statement and affidavit claiming the amount of loss; and 2) a care plan with firm calculations. Here, the District Court received: 1) Tracy’s testimony; 2) his written victim impact statement; and 3) an itemized spreadsheet with firm calculations to support his claims. Tracy calculated his mileage based on total miles traveled multiplied by $0.50 per mile, which was near the current IRS mileage rate, and found to be reasonable by the District Court. Tracy calculated his lost wages by multiplying the 84 hours he spent by $30 per hour. Finally, Tracy based his property damage claim on “rust, wood damage, [and] abrasions to [the] metal and wood finishes.” Patterson did not specifically challenge the calculation of Tracy’s claims, but instead argued that these amounts had already been incorporated into the original restitution figure of $23,762. However, Tracy’s spreadsheet carefully itemized and accounted for a total restitution claim of $27,292, of which $5,039.94 was challenged on appeal. The District Court accepted all of Tracy’s claims and added Cash One Pawn’s $1,300 claim to arrive at $28,592, which was the total amount of restitution ordered. 10 ¶17 The District Court did not err in granting Tracy’s restitution requests for lost wages, mileage, copying costs, and personal property damage, which were all supported by substantial evidence. ¶18 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT

November 15, 2016

c96d1ba3-e968-4585-bf78-9b24070b4e0b

HONEY v STOLTZE LAND LUMBER COMP

N/A

88-492

Montana

Montana Supreme Court

NO. 88-492 IN THE SUPREME COURT OF THE STATE OF MONTANA 1 9 8 9 EUGENE J. HONEY, Claimant and Appellant, VS. STOLTZE LAND AND LUMBER COMPANY, Employer and Respondent, and STOLTZE LAND AND LTJMREF. COMPANY, Defendant and Respondent. APPEAL FROM: Workers' Compensation Court, The Honorable Timothy Reardon, Judge presiding COTJNSEL OF RECORD: For Appellant: John G. Bell; Bell, Corn & Bell, P.C., Hamilton, Montana For Respondent : Alan L. Joscelyn; Gough, Shanahan, Johnson & Waterman, Helena, Montana I - d 3 0 ' d 0 d w 1 2 Submitted on Briefs: Dec. 16, 1 9 8 8 . .at 1 . I % . Decided: February 7, 1 9 8 9 ? L . J * LJ : T c 2 2 MI-- = 0 2 Mr. Justice John Conway Harrison delivered the Opinion of the Court. This appeal arises from the decision of the Workers' Compensation Court limiting claimant's attorney's fees to the contingent fee aqreement without considering the time records and affidavit of his counsel. F 7 e reverse and remand for an evidentiary hearing. On February 10, 1984, Eugene Honey sustained a compensable injury. By order dated July 29, 1988, the Workers' Compensation Court determined claimant was entitled to 50 weeks of permanent partial disability benefits at the rate of $138.50 per week for a sum total of $6,925. The order further stated: 4. Claimant is entitled to attorney fees and costs. Because the injury occurred in 1984, the contingency fee is the appropriate means of computing claimant's entitlement. The standard agreement approved by the Division of Workers' Compensation for cases being resolved by this Court allows for an award of 33 percent of the benefits received as a result of the attorney's effort. Therefore, in the case at bar, claimant is entitled to attorney fees of 33 percent of $6,925.00, or $2,208.79 [sic], subject to the terms set forth in the Judgment number three. Continuing a review of the order, paragraph number 3. stated: 3. Claimant is entitled to an award of attorney fees and reasonable costs pursuant to Section 39-71-612, MCA. The attorney for the claimant shall serve this Court and opposing counsel no later than 20 days from the date of this Order a statement of the hours he or she compiled in pursuing this matter, the costs incurred, a statement of the attorney's customary and current hourly fee and a copy of the fee agreement as approved by the Division of Workers' Compensation. Claimant's counsel shall submit a proposed Order specifying the amount of attorney fees claimed. If the defendant or the claimant believes the amount due the claimant's attorney is unreasonable, then each has 30 days from the date of this Order to file a Motion for Evidentiary Hearing Regardinq Reasonableness of Attorney Fees; the motion shall be accompanied by an affidavit and statement of the grounds on which either the defendant or the claimant believes the amount due the claimant's attorney is unreasonable. Pursuant to the order, claimant's attorney filed a copy of the attorney-client agreement under which the claimant agreed to pay his attorney a contingent fee. In addition, claimant's attorney filed a sworn affidavit which established he worked on the case a total of 111.10 hours, which resulted in claimed attorney's fees of $9,443.50, and costs of $1,335.85. The affidavit also contained detailed statements of time records converted to a monetary sum based on the attorney's customary and current hourly rate. Finally, claimant's attorney submitted a proposed order specifying the amount of attorney' s fees claimed. Claimant' s attorney dj-S1 not, however, request an evidentiary hearing. In response to the fee proposal, the respondent filed a letter with the Workers' Compensation Court, objecting to any award in excess of the contingent fee agreement. By order dated August 31, 1988, the Workers' Compensation Court found: [A]s part and parcel of the Judgment herein, the Court directed counsel for the claimant to prepare and file with the Court a compilation of the number of hours devoted to the prosecution of the claim and to set forth a reasonable hourly rate. This is all in accord with the ruling of the Supreme Court in [Wight v. Hughes Livestock Co., Inc. (1983), 204 Mont. 98, 6 6 4 P.2d 3031 . . . , in which one of the criteria allowing the presumed reasonableness of the contingency fee is the number of hours required to prosecute the claim and granting either party an opportunity to request an evidentiary hearing to deviate from the presumed propriety of the contingent fee. Claimant complied with the directive of the Court and has filed a statement of hours wherein he claims 111 hours and a total attorney fee under that contention in excess of $10,000.00. Employer/insurer has responded, raisinq no objection to the 33 percent contingent fee, but objecting to any fee in excess of the contingent fee for the reason that no evidentiary hearing was requested wherein the Court would take evidence to deviate from the presumption of the reasonableness of the contingent fee. Having considered the matter, the Court finds that the claimant has not requested an evidentiary hearing so as to allow the Court to deviate from the presumed reasonableness of the contingency fee and, accordingly, finds that the contingency fee is reasonable and directs that the insurer pay attorney fees in the amount of $2,708.79 and costs as submitted. Claimant appeals from the foregoing order, alleging the lower court committed reversible error by fixing attorney's fees at the amount of the contingent fee contract without an evidentiary hearing. We agree. In Wight v. Hughes Livestock Co., Inc. (1983), 204 Mont. 98, 6 6 4 P.2d 303, this Court adopted several elements to he considered in determining the reasonableness of contingent fee contracts and the amount of attorney's fees to he awarded. [Iln determining a reasonable attorneys fee . . . [the judge] must engage in a balancing process and consider on contingent basis the following factors: "(1) The anticipated time and labor required to perform the legal service properly. " (2) The noveltv and difficulty of legal issues involved in the matter. " (3) The fees customarily charged for similar legal services. " ( 4 ) The possible total recovery if successful. "(5) The time limitations imposed by the client or circumstances of the case. " (6) The nature and length of the attorney-client relationship. " (7) The experience, skill and reputation of the attorney. "(8) The ability of the client to p a : ' for the legal services rendered. " (9) The risk of no recovery." . . . Not mentioned . . . but surely a . factor to be considered, is the market value of the lawyer's services at the time and place involved. Wight, 664 P.2d at 311-312, citing Clark v. Sage (Idaho 1981), 629 P.2d 657, 661. The above are more than mere suggestions, " [t] he lower court was required to consider the foregoing in its determination of the reasonableness of the contingent fee contract and the amount of attorneys fees to be awarded. " Mcnanold v. B. N. Transport, Inc . (Mont . 1985) , 701 P.2d 1001, 1004, 42 St.Rep. 940, 944. However, the Workers' Compensation Judge, in fixing the fee of $2,208.79, did not consider the proper factors. The respondent maintains that the Workers' Compensation Court cannot vary from the contingent fee agreement in the absence of a hearing, given the strong presumption of reasonableness in favor of the approved agreement. Instead, the party wishing to depart from the contingent fee must request a hearing. Respondent argues the lower court's order must be affirmed. Claimant contends he was not required to request an evidentiary hearing. The lower court's order required the claimant's attorney to submit a proposed order for reasonable attorney fees, supported by documentation. Only in the event a party believes the amount due under the proposed order is unreasonable would an evidentiary hearing be necessary. Claimant argues the respondent's letter objecting to any fee greater than the contingency amount was, in effect, an implied request for a hearing. Finally, claimant states the order was ambiguous, and he should be allowed a hearinq before the Workers' Compensation Court to establish an award of fees under the Wight guidelines. Neither party presents a definitive answer to explain the absence of a request for an evidentiary hearing. N o r does such absence explain the lower court's disregard for the documentation presented by the claimant's attorney. Indeed, the facts demonstrate a need for an evidentiary hearing. On the one hand, the claimant's attorney submitted an affidavit and time records establishing 110.10 hours were expended toward the case and justifying fees of nearly $10,000. Further, clai-mant's secured an award of $6,925 for his client. Certainly, substantial additional evidence reflecting the Wight guidelines is necessary before the Workers' Compensation Court may determine reasonable attorney's fees. Therefore, we reverse the decision of the Workers' Compensation Court and remand for an evidentiary hearing.

February 7, 1989

849681a4-ae66-4d3c-ab4b-315deee9be29

State v. Mayes

2016 MT 305

DA 15-0371

Montana

Montana Supreme Court

DA 15-0371 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 305 STATE OF MONTANA, Plaintiff and Appellee, v. JACK DEAN MAYES, Defendant and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DC 14-146 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Wendy Lee Holton, Attorney at Law, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jonathan M. Krauss, Assistant Attorney General, Helena, Montana Eileen Joyce, Butte-Silver Bow County Attorney, Michael Clague, Deputy County Attorney, Butte, Montana Submitted on Briefs: September 7, 2016 Decided: November 29, 2016 Filed: __________________________________________ Clerk 11/29/2016 Case Number: DA 15-0371 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Article II, Section 24, of the Montana Constitution, grants individuals accused of crimes the right to a speedy trial. At issue here is whether the right to a speedy trial is violated when, among other things, an accused is deprived of access to rehabilitation programs he would otherwise attend but for his unduly lengthy incarceration in county jail. After conducting a balancing of the applicable factors, the District Court found no violation. We reverse.1 FACTUAL AND PROCEDURAL BACKGROUND ¶2 Jack Dean Mayes (Mayes) has an extensive criminal record, including primarily drug offenses and other offenses likely related to drugs. Thus, Mayes was already on parole for a prior felony drug conviction when his parole officer arrested him, searched his home in Butte, and found a syringe containing liquid in a jacket pocket that field tested positive for methamphetamine. On August 7, 2014, the State arrested Mayes and charged him with felony criminal possession of the syringe in violation of § 45-9-102, MCA. Mayes made his initial appearance in Justice Court the next day, where his bond was set at $5,500. ¶3 The State filed an information on August 15, 2014. Mayes pleaded not guilty on August 28, 2014, and an omnibus hearing was held on September 18, 2014. At the omnibus hearing, the District Court set trial for February 9, 2015, 186 days after his arrest. At the time of Mayes’ arrest, the State Crime Lab had a substantial backlog of 1 Mayes also raises on appeal the District Court’s failure to credit his period of incarceration with 125 days. Based upon our resolution of the speedy trial issue, it is unnecessary to address Mayes’ second issue. 3 cases and notified the State that any analysis would require between seven and nine months to complete. On August 11, 2014, four days after Mayes was arrested, the Sheriff’s Office received notification from the State Crime Lab that the contents of the syringe had to be placed into a vial for purposes of analysis. Despite having received such notification, the State waited until November 17, 2014, or 102 days after Mayes’ arrest, to submit the substance for testing. There is no dispute that the State controlled the syringe and its contents during this 102 day period. During the hearing on the motion to dismiss, the State conceded that “there’s 100 days there that the substance sat in the sheriff’s department and didn’t get transferred.” Ultimately, the State could not explain why submission of the sample languished for nearly three and one-half months. ¶4 Since it appeared the lab would not complete its analysis in time for trial, the State filed a motion on January 20, 2015, to continue the February 9, 2015 trial date. Mayes objected, arguing that the continuance would leave him incarcerated for an excessive amount of time and place the trial date beyond the threshold period of 200 days established in Ariegwe.2 The District Court granted the continuance and reset Mayes’ trial for May 19, 2015, which was 285 days after his arrest. On April 2, 2015, Mayes filed a motion to dismiss for speedy trial violations. The State responded and the District Court entertained argument on the motion, ultimately issuing an order denying the motion on May 12, 2015. On May 13, 2015, Mayes pleaded guilty, but reserved the right to appeal the denial of his speedy trial motion. Thereafter, he received a five-year sentence to run concurrently with the sentence for which he was on parole. Mayes 2 See State v. Ariegwe, 2007 MT 204, ¶ 41, 338 Mont. 442, 167 P.3d 815. 4 remained incarcerated in county jail from the time of his arrest on August 7, 2014, until he entered his guilty plea on May 13, 2015, a total of 279 days. ¶5 In its order denying Mayes’ speedy trial motion, the District Court analyzed each Ariegwe factor. The court first acknowledged that the delay was beyond the 200 day threshold that would trigger a speedy trial analysis. In addressing the reasons for the delay, the District Court found the delay between Mayes’ arrest and his trial date was attributable to the State for purposes of balancing, but with a lesser degree of culpability. As for the specific delay arising from the State’s late submission of the sample to the lab, a delay of approximately 100 days, the court rejected Mayes’ argument that this delay was a tactical decision by the State to secure “better evidence.” Instead, the court found the delay was institutional, akin to negligence or a lack of diligence, which is the middle tier of the culpability scale in an Ariegwe analysis. The District Court recognized that Mayes had timely asserted his interest in a speedy trial by objecting to the State’s motion to continue trial, and then by motion on April 2, 2015. With respect to whether the delay caused Mayes prejudice, the court found that Mayes was incarcerated after December 11, 2014 as a result of his parole violation and not because of the new drug charges. Therefore, the court found no prejudice attributable to delay in the case pending before it for the new charges. The court also concluded Mayes had failed to provide sufficient evidence that: (1) the delay caused him aggravated anxiety or concern beyond what any person accused of a crime would face; (2) that Mayes had missed opportunities to participate in DOC treatment and rehabilitation programs; and (3) that Mayes’s defense had otherwise been compromised because of the delay. 5 STANDARD OF REVIEW ¶6 We review a district court’s findings of fact underlying a speedy trial claim for clear error. A court’s findings of fact are clearly erroneous when they are not supported by substantial credible evidence, if the court misapprehended the effect of the evidence, or if a review of the record leaves this Court with the definite and firm conviction that a mistake has been made. Whether there has been a constitutional violation of the right to speedy trial is reviewed de novo to determine whether the lower court’s interpretation and application of the law are correct. Ariegwe, ¶ 119. DISCUSSION ¶7 An accused’s right to a speedy trial is guaranteed by United States Constitution Amendments Six and Fourteen, and by Article II, Section 24, of the Montana Constitution. A reviewing court must analyze a potential speedy trial violation by balancing four factors: (1) the length of the delay; (2) the reasons for the delay; (3) whether the accused asserted his right to a speedy trial; and (4) whether prejudice to the accused resulted from the delay. Ariegwe, ¶ 20. When balancing the four factors, no single factor is dispositive and each is to be considered under the totality of relevant circumstances. Ariegwe, ¶ 112. The speedy trial clock commences once the accused is arrested, a complaint is filed, or an indictment or information is filed. Ariegwe, ¶ 42. A reviewing court must first address the length of delay as a threshold matter to determine if a speedy trial claim merits analysis. Ariegwe, ¶ 38. A minimum 200 days must elapse between the speedy trial clock’s commencement and the date of trial before a speedy trial claim merits consideration. Ariegwe, ¶ 41. 6 Factor One: The Length of the Delay ¶8 We consider the extent to which the delay stretches beyond the 200 day trigger date because a presumption of prejudice intensifies as the delay exceeds the trigger date: the greater the excess over the trigger date, the more likely the accused suffered prejudice. Ariegwe, ¶ 49. Here, Mayes was arrested on August 7, 2014 and pleaded guilty on May 13, 2015, a total of 279 days. This period exceeds the 200 day threshold by 79 days and, as the delay extends, it establishes an intensifying presumption of prejudice in Mayes’ favor. This factor favors Mayes’ motion to dismiss. Factor Two: The Reason for the Delay ¶9 A court reviewing a speedy trial claim does not consider in its analysis any action by either the State or the accused which does not postpone the trial date. Ariegwe, ¶ 63. The reviewing court must consider the cause and motive, or reason, behind the particular delay. Ariegwe, ¶ 67. Deliberate delays designed to undermine the defense are heavily weighed, while negligent or institutional delays are weighed less heavily. Ariegwe, ¶ 68. Institutional delays are those inherent in the criminal justice system, and beyond control of prosecutors. Ariegwe, ¶ 68. Negligence is equated with a lack of diligence in bringing the accused to trial. Ariegwe, ¶ 69. ¶10 We have previously recognized that where the State knows the State Crime Lab is significantly backlogged, the failure to inquire about independent lab analysis or other options constitutes a lack of diligence, even when the backlog is due to circumstances beyond the control of the prosecutor. State v. Velasquez, 2016 MT 216, ¶¶ 19-20, 384 Mont. 447, 377 P.3d 1235. In Velasquez, an accused facing felony drug charges was 7 incarcerated in Roosevelt County Jail the entire 309 days he awaited trial. Weeks before his first trial date, the State moved for a continuance because the lab analysis of the evidence had not been completed. As here, the State Crime Lab had informed the State that evidentiary samples were backlogged by an estimated nine months. The District Court granted the continuance despite Velasquez’ objection that he would be denied his right to a speedy trial. The District Court granted two more continuances to allow for completion of lab results. In denying Velasquez’ speedy trial motion, the District Court categorized the delay as institutional, and not attributable to negligence or lack of diligence on the part of the State. Velasquez, ¶¶ 1-5. We reversed, concluding that the failure of the State to pursue possible alternatives to testing at the State Crime Lab, coupled with the State’s awareness that the lab was backlogged by nine months, constituted a lack of diligence which weighed more heavily against the State and tipped the prejudicial scale in favor of the defendant in the Ariegwe analysis. Velasquez, ¶¶ 51-53. ¶11 As in Velasquez, the District Court here mischaracterized the prosecution’s inaction in submitting the sample as part of “the ordinary time required to initiate and prosecute a felony criminal action.” The delay in Velasquez—309 days—and the delay here—279 days—both resulted from the State’s failure to obtain a lab analysis necessary to prosecute a simple drug possession charge. The focus in both Velasquez and here is the State’s failure to take affirmative measures to move its case to trial and not the conduct of the lab. Furthermore, here, the delay by the State of 102 days in submitting the sample weighs more heavily against the State than in Velasquez because the State was 8 in control of the sample and the timetable for its submission to the lab. Although the delay remains unexplained, we decline to adopt Mayes’ position, on this record, that the State’s actions amounted to a deliberate bad faith effort to prejudice the defense. However, we cannot characterize the delay as merely a lack of diligence by the State when, all other considerations aside, failing to submit the sample constituted over one- half of the time necessary to trigger a speedy trial inquiry. Indeed, as the United States Supreme Court has cautioned, the speedy trial factors that make up our Ariegwe test “have no talismanic qualities.” Ariegwe, ¶ 101 (citing Barker v. Wingo, 407 U.S. 514, 92 S. Ct. 2182, 2193 (1972)). We therefore weigh the reason for the delay heavily against the State, but refrain from concluding that there was a deliberate bad faith delay by the State. It is the State’s burden to bring the accused to trial and a defendant has no burden to ensure the State’s diligent prosecution of his case. Ariegwe, ¶ 64. Such a burden should not be shouldered lightly by the State, especially when there are legitimate institutional delays, such as crowded dockets and availability of witnesses, which must be accounted for. Here, the record is devoid of any explanation for the State’s failure to submit an evidentiary sample to the lab for 102 days. As such, the reason for the delay weighs heavily against the State. Factor Three: The Accused’s Response to the Delay ¶12 Ariegwe not only requires that the District Court determine whether the accused timely asserted his right to a speedy trial, but also whether he actually wanted a speedy trial, given the circumstances. Ariegwe, ¶¶ 76, 79. We agree with the District Court that Mayes timely asserted his right by objecting to the State’s motion to continue and by 9 filing his motion to dismiss on April 2, 2015. We also agree with the District Court that there is no evidence in the record that the Defendant acquiesced or consented to the delay he endured. ¶13 We are compelled, however, to address the State’s argument that Mayes did not actually want a speedy trial because he ultimately pleaded guilty instead of proceeding to trial. Although Ariegwe acknowledges that a guilty plea stops the speedy trial clock, an accused’s constitutional right to a speedy trial is not compromised by the entry of a guilty plea. See Ariegwe, ¶ 43. It would be a mistake to align these distinct constitutional interests—the right to a speedy trial; the relinquishment of the right to trial; and all other constitutional rights attendant to trial—such that relinquishment of one constitutional right would compromise others that are distinguishably different. Ariegwe does not anywhere diminish the interests of an accused who chooses to enter a plea instead of proceed to trial, and we decline to do so here. Instead, we find that the Mayes met his burden of asserting his right to speedy trial. Factor Four: Prejudice to the Accused ¶14 Under factor four, the reviewing court must examine the interests of the defendant that the speedy trial right was designed to protect. Ariegwe, ¶ 86 (citing Barker v, 407 U.S. at 552, 92 S. Ct. at 2193). The United States Supreme Court enumerated these interests: (1) preventing oppressive pretrial incarceration; (2) minimizing anxiety and concern of the accused; and (3) limiting the possibility that the defense will be impaired because of dimming memories and the loss of exculpatory evidence. Ariegwe, ¶ 88 (citing Barker, 407 U.S. at 532, 92 S. Ct. at 2193; Doggett v. United States, 505 U.S. 647, 10 654, 112 S. Ct. 2686, 2692 (1992)). A reviewing court may find prejudice to the accused under any one or all of these factors. Ariegwe, ¶ 88. A. Whether Mayes’ pretrial incarceration was oppressive. ¶15 We have repeatedly recognized that the delay that can be tolerated for a relatively simple street crime is considerably less than, for example, a complex conspiracy charge. Ariegwe, ¶ 91. In State v. Billman, 2008 MT 326, 346 Mont. 118, 194 P.3d 58, Billman was charged with felony DUI and related driving offenses. Billman remained incarcerated and unable to post bail for 278 days while his trial was continued five times because of docket conflicts and a missing witness. Billman, ¶¶ 4-6. We recognized that Billman’s time incarcerated represented a “considerable amount of delay” and required the State to make a compelling and persuasive showing that this amount of delay did not prejudice him. Billman, ¶ 18. Even though Billman did not challenge the conditions of his incarceration, we found that the length of his incarceration in conjunction with the simple charges he faced sufficed to establish prejudice against him. Billman, ¶ 41; see also Velasquez, ¶ 35. Here, Mayes prosecution was also for a simple charge: possession of dangerous drugs. The charge against Mayes had only two elements: (1) possession; (2) of dangerous drugs. Section 45-9-102, MCA (2013). Therefore, the delay, ostensibly for the purpose of establishing the syringe contained a dangerous drug, is less tolerable and weighs against the State. ¶16 Mayes’ case additionally raises concerns regarding foregone rehabilitative opportunities, such as drug treatment and counseling, which we have not previously considered in the speedy trial balancing analysis. These considerations are most 11 appropriately made in the context of whether the pretrial incarceration has been oppressive. The District Court determined that, as of Mayes’ December 11, 2015 parole hearing, Mayes’ incarceration was due to his parole violation and not the pendency of the new drug charges. On that basis, the court concluded that it “cannot find that the Defendant’s pretrial incarceration has been oppressive under the circumstances. He was subject to continued custody regardless of the fact that the original trial date was vacated.” ¶17 We disagree with both the court’s finding of fact and its application of the law when it determined Mayes was not prejudiced because he was incarcerated pursuant to a parole violation. The record establishes that Mayes would not receive a disposition on his parole violation while the new charges in the instant proceedings remained unresolved. At Mayes’ probable cause hearing for his parole violation, held the day before he met with the parole board, Mayes’ parole officer advised, “[a]ny sanction I would impose, would be determined by . . . the outcome of those pending charges. . . . [B]asically what I am telling you [Mayes] is that you’re stuck here [in Butte-Silver Bow county jail] until those [charges] are adjudicated.” The record further establishes that Mayes was prescreened and accepted for Connections Corrections, followed by pre- release, but that such a placement could not occur until resolution of the new possession charges. Similarly, Mayes was an appropriate referral for NEXUS, but any placement would not occur until resolution of the new felony charges. Parole Officer Martin testified at the speedy trial hearing and explained Mayes’ situation succinctly: Q: Now going to the December 11 [parole board] hearing, what was the 12 result of that hearing? A: There was probable cause found by the Hearings Officer Kelley that the [parole] violations had occurred, and he was ordered to be returned back before the Board of Pardons and Parole. . . . Q: Now, from August 7, the date of his arrest, until currently, has he been able to apply for or enter any programs that the DOC offers? A: I had him pre-screened for Connections prior to his arrest on August 7. And then after his arrest. . , he was pre-screened at the Great Falls Pre- Release Center and accepted. Q: Okay. But he couldn’t go to those programs because of the August 7 arrest? A: Yes, sir. Q: Okay. While he’s been in the county jail, could he apply for any other DOC type of programs? A: Yes. Q: Like what? A: We could screen him for NEXUS, pre-releases and that, just getting that process taken care of for the outcome of the pending charges. Q: So even though he may have applied for the programs, he couldn’t go until these charges are resolved? A: No. No. He could not go. He’s not eligible for community placement until the felony charges are adjudicated or dismissed. ¶18 Mayes has established that he was prescreened and accepted for at least one rehabilitative drug program, followed by a community placement, which he could have participated in but for his incarceration in the county jail on new drug charges. We further observe that the sentence Mayes received was imposed concurrently to the 13 sentence he received his at parole hearing and for which his parole officer recommended participation in a drug rehabilitation program followed by community placement. It appears counterproductive, to say the least, to delay drug rehabilitation treatment for an offender obviously suffering from a drug addiction in order to test the substance in a syringe recovered from his person—submission of which did not occur for 102 days, or nearly twice as long as it would take for the offender to complete treatment at Connection Corrections. ¶19 We consider efforts to rehabilitate drug addiction as important, and opportunities to receive treatment are frequently limited, requiring many circumstances to align to effectuate the treatment opportunity. Here, the record established that Mayes had such an opportunity; he had been prescreened and could be placed in a drug rehabilitation program. However, the pending possession charges in the instant proceedings prevented him from doing so. In contrast to the speculative prospects for rehabilitation presented in State v. Betterman, 2015 MT 39, 378 Mont. 182, 342 P.3d 971, aff’d, Betterman v. Montana, ___U.S.___,136 S. Ct. 1609 (2016), Mayes has met his burden of establishing the availability and placement into drug rehabilitation programs which he was unable to realize because of the pending new drug charges. Thus, we consider the inability of Mayes to participate in drug rehabilitation as a consideration of oppressive pretrial delay and weigh it against the state. 14 B. Whether Mayes’ anxiety and concern was caused by or aggravated by the delay. ¶20 “[T]he crucial question here is whether the delay in bringing the accused to trial has unduly prolonged the disruption of his or her life or aggravated the anxiety and concern that are inherent in being accused of a crime.” Ariegwe, ¶ 97 (citing United States v. Macdonald, 456 U.S. 1, 8, 102 S. Ct. 1497, 1502 (1982)). In evaluating this interest, the court may infer from evidence that the unresolved charges disrupted the accused’s life, causing him anxiety and concern that led to prejudice. Ariegwe, ¶ 97. But a certain amount of disruption when facing criminal charges is to be expected, and finding prejudice from anxiety and concern hinges on duration and intensity. Ariegwe, ¶ 97. ¶21 Here, the record shows that Mayes alleged anxiety and concern. Mayes alleged that he suffered financially from his incarceration in that he was not employed, and was not able to graduate from college on time with his peers. He alleged that he suffered depression and emotional impairment as the result of his extended confinement. Although Mayes alleged a number of ways he has suffered anxiety and concern, he failed to present any evidence to the District Court to support his allegations. Ariegwe permits a reviewing court to infer from evidence that unresolved charges have disrupted the accused’s life, but Mayes failed to set forth any additional evidence for review under this factor. While Mayes’ testimony alone of his anxiety and concern is evidence for the court to consider, we attribute little, if any, prejudice to Mayes on this factor. 15 C. Whether the accused’s defense was impaired. ¶22 Preventing impairment of the defense remains the most serious interest the speedy trial right was designed to protect. Ariegwe, ¶ 98. Even though this interest focuses on specific aspects of potential impairment, such as witness reliability and evidence spoliation, an accused who fails to set forth any evidence of specific impairment is not precluded from a finding of prejudice. Ariegwe, ¶¶ 99-100. Rather, a lack of evidence showing impairment allows the court to focus on other speedy trial factors to determine whether the pretrial delay has prejudiced the defense. Billman, ¶ 47. The extent to which an accused may rely on the presumption of prejudice depends on the extent to which the delay exceeds the 200 day trigger date. Ariegwe, ¶¶ 51, 151. ¶23 In Ariegwe, we concluded that Ariegwe’s delay of 208 days past the trigger date (408 days total) required the State to make a compelling justification for the delay, and a persuasive showing that he had not been prejudiced by the delay. Ariegwe, ¶¶ 123, 151. However, we further concluded that the extent of that delay, substantial as it was, did not completely absolve Ariegwe from showing at least some particularized prejudice. Ariegwe, ¶ 151. By contrast, we concluded in Velasquez that a record with only a modicum of evidence showing an impaired defense would suffice to adequately support presumptive prejudice and direct a reviewing court to analyze the other factors. Velasquez, ¶¶ 48-50. Similarly, in Billman, we acknowledged the accused’s failure to submit affirmative proof of prejudice would not be fatal to the defendant’s speedy trial claim and would instead focus our attention on other factors. Billman, ¶ 47; see also State v. Butterfly, 2016 MT 195, ¶ 38, 384 Mont. 287, 377 P.3d 1191 (“[C]onsidering the 16 lack of evidence of impairment in light of all other factors, we conclude Butterfly was not prejudiced by the delay.”); State v. Redlich, 2014 MT 55, ¶ 53, 374 Mont. 135, 321 P.3d 82 (affirming the District Court’s ruling that there was no prejudice to the defendant where he alleged a defense impairment, but provided no detail how exactly his defense was hindered); State v. Zimmerman, 2014 MT 173, ¶ 37, 375 Mont. 374, 328 P.3d 1132 (concluding that there was no prejudice despite the defendant’s mere allegation of a defense impairment where witness memories were marginally dimmed by the erosion of time, but events were easily reconstructed by video evidence). ¶24 Here, the District Court found that Mayes failed to identify any evidence showing that potential evidence was lost, that witnesses have become unavailable, or that Mayes demanded an independent examination of the evidence. Indeed, the court found, “the Defendant has not alleged or shown any specific limitation on his ability to present an effective defense.” We agree with the District Court. Although “consideration of prejudice is not limited to the specifically demonstrable,” the complete lack of evidence that the defense was impaired should be considered under the totality of the circumstances. Ariegwe, ¶ 151 (quoting Doggett, 505 U.S. at 655, 112 S. Ct. at 2692-93). Here, Mayes’ inability or unwillingness to substantiate with evidence other than his own allegations some impairment to the defense weighs in favor of the State. Balancing the Factors ¶25 Whether the accused was deprived of his right to a speedy trial is determined by the facts of the case and by weighing each of the factors addressed above. Zimmerman, ¶ 38. We conclude that the State’s failure to submit the lab analysis for 102 days 17 following Mayes’ arrest, while not proven to be in deliberate bad faith, weighed very heavily against the State in the balancing of Areigwe factors. These charges were simple and the State’s reasons for delay, backlog at the State Crime Lab and an unexplained failure to timely submit the evidence, were insufficient when balanced against rehabilitative opportunities Mayes was unable to participate in as a result of the unresolved drug charges. When we consider the State’s reason for the delay, the simplicity and nature of the charges, the prejudice to Mayes by his inability to participate in drug rehabilitation programs and community placement, in conjunction with Mayes’ obvious need for treatment, we conclude that Mayes was denied his right to a speedy trial. ¶26 The remedy for violation of a speedy trial is dismissal of the charges. Betterman, ¶ 24. We therefore reverse the District Court’s denial of Mayes’ motion to dismiss and remand for dismissal of the charges. /S/ LAURIE McKINNON We Concur: /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER Justice Jim Rice, dissenting. ¶27 The complex and unwieldy Ariegwe test can lead to a parsing of the speedy trial inquiry into such minute pieces that it is easy to lose sight of the big picture. Indeed, as the U.S. Supreme Court has cautioned, the speedy trial factors that make up our Ariegwe 18 test “have no talismanic qualities.” Barker, 407 U.S. at 533, 92 S. Ct. at 2193. The big picture we should see here is that the State was ready to try this felony case less than seven months after Mayes’ not guilty plea put this case on a track for trial, even with the delays associated with the Crime Lab, and, unlike in Velasquez, there was absolutely no impairment to the “most serious” interest to be protected by the speedy trial right—the ability of Mayes to present an effective defense. Ariegwe, ¶ 98; Barker, 407 U.S. at 532, 92 S. Ct. at 2193; Doggett, 505 U.S. at 654, 112 S. Ct. at 2692. For these and other reasons stated below, I would affirm. ¶28 The situation with the Crime Lab was likewise not the same as in Velasquez. There, the 309-day delay was occasioned when the prosecution failed to act “after learning of and ‘repeatedly’ confirming the nine-month delay” in processing the evidence, but doing nothing in response. Velasquez, ¶ 19. Here, after an initial unquantified delay in processing that arose when the Crime Lab advised that it could not accept Mayes’ syringe in its original condition, and that the contents would need to be extracted and re-packaged in a different container, the Crime Lab processed the evidence in just four months, providing a report on March 23, 2015—far less time than required in Velasquez. Although by then a trial date was not available for another two months (May 19), that delay was not caused by any lack of diligence by the State. ¶29 The Court assesses the State’s conduct as lying somewhere between bad faith and lack of diligence, classifying it as not “merely a lack of diligence.” Opinion, ¶ 11. This underscores the vague subjectivity inherent in the Ariegwe analysis, dealing with, in its own words, “gradations of culpability.” Ariegwe, ¶ 71. Critically, however, the Court 19 does not explain how this deficiency on the part of the State matters—how Mayes was ultimately prejudiced. Despite any lack of diligence on the part of the State, the Crime Lab produced the evidence in less time than expected, and Mayes’ interests did not suffer. ¶30 Unlike the Court, I would credit the District Court’s findings of fact on these issues. The District Court rejected Mayes’ arguments about bad faith and lack of diligence, finding Mayes “did not offer any evidence to show a lack of diligence on the part of the prosecution. The Defendant did not argue that the State failed to submit its alleged drug evidence to the crime laboratory in a timely manner.” Given this lack of evidence and argument in the District Court, and the nature and duration of the delay here as compared to Velasquez, I agree with the District Court in not weighing the delay in this case “heavily” against the State, as the Court does. Opinion, ¶ 11. ¶31 The Court also weighs against the State the impact upon Mayes’ ability to seek program placement, rejecting the District Court’s findings of facts and conclusions of law. Opinion, ¶¶ 16–19. However, the record is clear that, while screened for DOC programs before and after his arrest, Mayes’ initial inability to access programs resulted from his arrest, on August 7, and continued for that reason at least four months, through December 11, when his parole violation hearing (probable cause) was conducted. Even thereafter, Mayes was placed on a “parole hold” and subjected to further DOC detention until parole board hearings could be conducted, adding to the delay attributable to his arrest. Although Mayes may then have been able to post bail, he offered no proof that he could or would have done so, especially in light of the “parole hold.” As the District 20 Court found, Mayes “was subject to continued custody regardless of the fact that the original trial date was vacated.” Further, the District Court found that Mayes’ program argument “was not supported by any evidence to identify particular programs at issue or to demonstrate the Defendant’s eligibility for such assistance.” The Court overturns the District Court’s findings on the basis of very thin and, in my view, inconclusive testimony. Opinion, ¶ 17. However, even if, in fact, Mayes sufficiently established his eligibility for programs, any delay in accessing them associated exclusively with the State’s delay in this criminal proceeding was minimal, and I agree with the District Court that it was not extensive enough to be considered oppressive. See State v. Maloney, 2015 MT 227, ¶ 32, 380 Mont. 244, 354 P.3d 611. ¶32 The Court agrees with the District Court that there was no evidence establishing aggravation of anxiety and concern. Opinion, ¶ 21. Further, it affirms the District Court’s finding that Mayes’ ability to present an effective defense was not hindered in any way. Opinion, ¶ 24. The Court neglects to recognize the importance of this final factor, which, as cited above, has been generally acknowledged by the U.S. Supreme Court and this Court as the most important consideration of prejudice. See Barker, 407 U.S. at 532, 92 S. Ct. at 2193; Doggett, 505 U.S. at 654, 112 S. Ct. at 2692; Billman, ¶¶ 68–69. Thus, it should be accorded significant weight. ¶33 Making these adjustments in the weight to be given to the Ariegwe factors, I would conclude that the record demonstrates that the factors do not weigh in Mayes’ favor. But beyond that, I believe it more important to recognize that the speedy trial factors are not to be “talismanic” in their effect, especially if they hinder seeing the big 21 picture. The delays that occurred in this case are simply not out of the ordinary for the prosecution of a felony case in Montana. Mayes did not demonstrate significant prejudice. I would affirm. /S/ JIM RICE Justice Beth Baker joins in the dissenting Opinion of Justice Rice. /S/ BETH BAKER

November 29, 2016

72864d46-e78f-4e55-a757-55772277d04a

Matter of the Estate of Johnson

2016 MT 274N

DA 16-0118

Montana

Montana Supreme Court

DA 16-0118 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 274N IN THE MATTER OF THE ESTATE OF: DONALD WESLEY JOHNSON, Deceased. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADP 2015-63 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellant: Margaret E. Miller (Self-Represented), East Helena, Montana For Appellee: Brand G. Boyar, Boyar Law Offices, PLLC, Helena, Montana Submitted on Briefs: August 31, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 16-0118 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Donald W. Johnson (Decedent), the oldest of 13 siblings, died on April 11, 2015, at age 67. His Last Will and Testament designated one of his sisters, Lora Johnson, and his niece, Shauna Helfert, as co-personal representatives (Co-PRs). In May 2015, the First Judicial District Court, Lewis and Clark County, granted Co-PRs’ application for informal probate of Decedent’s Will. On May 27, 2015, heirs and devisees were notified of the proceeding and creditors were notified on June 18, 2015. ¶3 On August 19, 2015, Decedent’s sister Margaret Miller, who was four years younger than Decedent, submitted a claim against Decedent’s estate seeking $75,000 in emotional and psychological damages, claiming Decedent had sexually abused her when they were both children and young adults, approximately 50 years earlier. She attached an affidavit dated August 18, 2015, in which she described, in substantial detail, instances of physical and sexual abuse by her brother dating back to 1962. Additionally, she claimed in the affidavit that several years ago she had told two of her sisters that the Decedent had molested her when they were youths. 3 ¶4 In September 2015, the Co-PRs disallowed Miller’s claim on the ground that she had not petitioned the District Court for allowance to assert her claim. In November 2015, Miller submitted her Allowance for Claim to the District Court. In December 2015, Co-PRs moved to have Miller’s claim dismissed on the grounds that the claim was barred by the applicable statute of limitations and violated Decedent’s constitutional rights. ¶5 On January 21, 2016, the District Court granted Co-PRs’ motion and dismissed Miller’s claim. Relying on § 27-2-216, MCA, which establishes the statute of limitations for tort actions arising from childhood sexual abuse, the court concluded that Miller’s claim was barred. Section 27-2-216, MCA, provides, in relevant part: (1) An action based on intentional conduct brought by a person for recovery of damages for injury suffered as a result of childhood sexual abuse must be commenced not later than: (a) 3 years after the act of childhood sexual abuse that is alleged to have caused the injury; or (b) 3 years after the plaintiff discovers or reasonably should have discovered that the injury was caused by the act of childhood sexual abuse. ¶6 Miller filed a timely appeal. We affirm. ¶7 Appearing pro se, Miller argues on appeal that it was not until her brother’s April 2015 death that repressed memories of the abuse began to surface, causing her emotional and psychological distress. She maintains that the surfacing of these memories qualifies as “discovery” of the abuse and its injuries under § 27-2-216(1)(b), MCA; consequently, her claim is timely filed. 4 ¶8 Statutes of limitations exist to promote fairness and suppress stale claims, ensuring that the responding party has a reasonable opportunity to put forth an effective defense. Christian v. Atl. Richfield Co., 2015 MT 255, ¶ 13, 380 Mont. 495, 358 P.3d 131. ¶9 In the case before us, Miller was a child when the alleged abuse began. She asserts that it continued until Decedent “was in his twenties.” As such, Miller may have reached the age of majority before the alleged abuse ceased. While Miller argues that her injury and emotional distress arose when the memories surfaced in 2015, the record establishes that memories of the events were not suppressed years ago when she mentioned to her sisters that their brother had abused her, or in 2013, when she told one of her sisters she did not want to visit their ailing brother because he had been mean to her and had molested her. ¶10 Miller claims that since her brother’s death, she has suffered traumatic flashbacks, a severe rash on her legs, and the loss of teeth as a result of a stress-induced exacerbation of rheumatoid arthritis. However, she has provided no evidence that links these conditions to her claimed childhood sexual abuse. Moreover, the submitted affidavit of Miller’s counselor reveals that Miller has experienced low self-esteem, difficulty in maintaining relationships, and feelings of depression throughout her adult life. Given Miller’s obvious memories of her brother’s alleged abuse, her statements that she did not want to embarrass or humiliate her family by making her allegations public, the passage of 50 years, and her decision to seek compensation just weeks after her brother’s death and before she commenced counseling, lead us to conclude, as did the District Court, that 5 Miller reasonably could or should have discovered the physical and emotional impact of the alleged abuse much earlier. ¶11 While we appreciate the difficulty of raising such a claim and the ramifications it could have on a family, the evidence in the record establishes that Miller’s memory of the alleged events was not suppressed until her brother’s death. It is clear that she had memories of events at least periodically through the years and knowledge that there may be reasons to associate those events with the physical and emotional symptoms she was experiencing. As a result, the applicable statute of limitations bars her claim and the District Court did not err in so ruling. As we conclude Miller’s claim is barred by § 27-2-216, MCA, we need not address the constitutional issue raised before the District Court. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for noncitable memorandum opinions. In the opinion of this Court, this case presents questions clearly controlled by settled law. ¶13 We affirm. /S/ MICHAEL E WHEAT We Concur: /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE

October 25, 2016

ae79803b-93d0-44db-a3fc-dacb940935e5

Byorth v. USAA Casualty Insurance Co.

2016 MT 302

DA 16-0013

Montana

Montana Supreme Court

DA 16-0013 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 302 PETER BYORTH and ANN McKEAN, on behalf of themselves and all those similarly situated, Plaintiffs and Appellees, v. USAA CASUALTY INSURANCE COMPANY, and JOHN DOES I-X, Defendants and Appellants. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV-15-0511 Honorable Gregory R. Todd, Presiding Judge COUNSEL OF RECORD: For Appellants: Ian McIntosh, Kelsey E. Bunkers, Crowley Fleck, PLLP, Bozeman, Montana Jessica G. Scott, Wheeler Trigg O’Donnell LLP, Denver, Colorado For Appellees: John Heenan, Colette B. Davies, Bishop & Heenan, Billings, Montana Submitted on Briefs: August 24, 2016 Decided: November 22, 2016 Filed: __________________________________________ Clerk 11/22/2016 Case Number: DA 16-0013 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 USAA Casualty Insurance Company (USAA) appeals from an order of the Thirteenth Judicial District Court in Yellowstone County certifying a class action pursuant to M. R. Civ. P. 23. We reverse the order of the District Court and remand for further proceedings. ISSUES ¶2 The question on appeal is whether the District Court abused its discretion in certifying the class pursuant to M. R. Civ. P. 23. Following the structure of Rule 23, we divide this question into two issues: 1. Did the District Court abuse its discretion in certifying the class under M. R. Civ. P. 23(a)? 2. Did the District Court abuse its discretion in certifying the class under M. R. Civ. P. 23(b)(3)? BACKGROUND ¶3 In September 2011, Peter Byorth was struck by a motor vehicle while riding his bicycle. He was insured at the time by USAA under an auto insurance policy that provided $10,000 in medical payment coverage. Byorth submitted medical payment claims totaling $85,000, which USAA then sent to Auto Injury Solutions (AIS) for review. Due to an alleged coding error in the paperwork AIS required Byorth’s physician to complete, USAA initially denied Byorth’s claims as medically unnecessary. However, USAA eventually paid policy limits to Byorth. ¶4 Ann McKean was also insured under a USAA auto insurance policy that provided medical payments coverage. In February 2014, McKean was injured in a motor vehicle 3 accident and incurred damages far greater than her policy limits. McKean submitted her medical bills to USAA, and USAA forwarded them to AIS for review. AIS allegedly determined several procedures McKean underwent were not medically necessary, and USAA subsequently denied coverage. ¶5 On April 24, 2015, Byorth and McKean filed a complaint against USAA alleging breach of fiduciary duties, breach of contract, and violations of the Unfair Trade Practices Act, § 33-18-201, MCA (UTPA). Plaintiffs argued USAA’s practice of sending medical claims to AIS was “an improper cost containment scheme designed to wrongfully deprive Montana consumers of their first-party medical pay benefits.” Plaintiffs sought to recover actual and punitive damages and to enjoin USAA from submitting future claims to AIS for review. ¶6 On June 11, 2015, USAA removed the matter to federal court. While the case was before the federal court, USAA filed its answer, wherein USAA denied all allegations relating to AIS’s role in adjusting medical claims. The federal court ultimately determined that it lacked subject matter jurisdiction, and the case returned to the District Court. On November 19, 2015, Plaintiffs filed a motion to certify the proposed class. Six days later, USAA filed a motion to strike the class allegations from Plaintiff’s complaint. On December 15, 2015, USAA filed its response in opposition to certification. The District Court issued its order certifying the class two weeks later, on December 29. ¶7 Plaintiffs’ motion and brief in support of class certification recited many of the allegations of their complaint. In its motion to strike the class allegations from the 4 complaint, USAA argued that the class was unascertainable, that individual issues predominated over common issues, and that a class action was not the superior method of litigation. USAA reasoned that no amount of discovery would ever show that Plaintiffs’ class could overcome these deficiencies and satisfy the requirements of Rule 23. ¶8 In response to USAA’s motion to strike, Plaintiffs repeated their allegations regarding AIS’s role in reviewing medical claims. To support these allegations, Plaintiffs appended two exhibits to their brief. First, Plaintiffs provided an August 6, 2009, National Association of Insurance Commissioners (NAIC) memorandum (hereinafter the NAIC memo) discussing the status of Horton v. USAA Casualty Ins. Co., No. CV-06-02810-PHX-DGC (D. Ariz.), a class action alleging USAA relied on AIS payment recommendations to pay less than the full amount owed on medical claims. Plaintiffs also provided an excerpt from a proposed settlement agreement dated May 27, 2008, wherein USAA denied the Horton class allegations but stipulated to a class for settlement purposes. The NAIC memo indicates the parties were scheduled to file an amended settlement agreement by November 6, 2009. Plaintiffs did not provide evidence of a final settlement in Horton. ¶9 Second, Plaintiffs provided the District Court with an undated excerpt from a Washington Superior Court’s order approving a class settlement in MySpine, PS v. USAA Casualty Ins. Co., No. 12-2-32635-5 SEA (Wash. Super. Ct.). The settlement class in MySpine included USAA insureds who had medical claim payments reduced due to certain “Reason Codes.” The excerpt does not mention AIS, nor does it explain what a “Reason Code” is or if the codes were used erroneously. 5 ¶10 In its December 15 brief in opposition to class certification, USAA provided medical payment logs for Byorth and McKean and the results of an AIS review of one of McKean’s claims. The payment logs list the dates USAA received claims from Byorth and McKean, as well as the dates USAA issued payments under the respective insurance policies. The logs indicate USAA did not pay many of the claims submitted, but they do not include any reason for the denials. The AIS review relates to coverage of an MRI McKean received. The review is signed by a physician who reviewed documentation submitted with the claim and concluded the MRI was “medically reasonable or necessary.” The physician therefore recommended payment of the claim. ¶11 The District Court’s certification order concluded that “all members of the proposed class, including Byorth and McKean, were subject to the same claims processing procedure of outsourcing claims to AIS.” Thus, the common question for the class was “[w]hether or not USAA violated Montana law with respect to its med-pay claims handling practices.” The District Court reasoned that although additional litigation may be needed to determine each class member’s damages, the threshold question of unfair trade practices could be resolved in a single stroke. The District Court therefore certified the class as follows: Under Mont. R. Civ. P. 23(b)(3) the Court certifies the following class: (a) all Montana consumers who (b) were insured by USAA for med pay benefits and (c) who submitted a claim for med pay benefits from April 2007 to April 2015, and (d) had their claim denied in whole or in part following a “file review” by AIS or because of an asserted “coding error.” 6 ¶12 The District Court analyzed each of the four elements of Rule 23(a), but did not explicitly address the requirements of Rule 23(b)(3). USAA promptly appealed from the certification order in accordance with Rule 23(f). STANDARD OF REVIEW ¶13 We review a district court’s decision on a motion for class certification for an abuse of discretion. Sangwin v. State, 2013 MT 373, ¶ 10, 373 Mont. 131, 315 P.3d 279 (citing Chipman v. N.W. Healthcare Corp., 2012 MT 242, ¶ 17, 366 Mont. 450, 288 P.3d 193). The question is not whether this Court would have reached the same decision, but whether the District Court acted arbitrarily without conscientious judgment or exceeded the bounds of reason. Sangwin, ¶ 10 (citing Chipman, ¶ 17). We afford trial courts the broadest discretion because they are “‘in the best position to consider the most fair and efficient procedure for conducting any given litigation.’” Sangwin, ¶ 10 (quoting Jacobsen v. Allstate Ins. Co., 2013 MT 244, ¶ 25, 371 Mont. 393, 310 P.3d 452). Certification orders are usually made in the early stages of litigation, when discovery is still underway and facts are disputed. Because of this timing, and the trial court’s power to modify a class after certification pursuant to Rule 23(c)(1)(C), we are generally reluctant to supplant the trial court’s certification decision. Diaz v. State, 2013 MT 219, ¶ 20, 371 Mont. 214, 308 P.3d 38 (Diaz II). A district court’s interpretation of procedural rules, like Rule 23, is a matter of law that we review de novo for correctness. See In re Estate of Strange, 2008 MT 158, ¶ 6, 343 Mont. 296, 184 P.3d 1029. 7 DISCUSSION ¶14 1. Did the District Court abuse its discretion in certifying the class under M. R. Civ. P. 23(a)? ¶15 Rule 23(a) establishes four prerequisites to class certification: One or more members of a class may sue or be sued as representative parties on behalf of all members only if: (1) the class is so numerous that joinder of all members is impracticable; (2) there are questions of law or fact common to the class; (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and (4) the representative parties will fairly and adequately protect the interests of the class. M. R. Civ. P. 23(a). These four prerequisites are respectively known as numerosity, commonality, typicality, and adequacy of representation. The absence of any one prerequisite is fatal to certification. Jacobsen, ¶ 28 (citing Chipman, ¶ 43). These prerequisites “‘ensure[ ] that the named plaintiffs are appropriate representatives of the class whose claims they wish to litigate’ and ‘effectively limit the class claims to those fairly encompassed by the named plaintiff's claims.’” Mattson v. Mont. Power Co., 2012 MT 318, ¶ 18, 368 Mont. 1, 291 P.3d 1209 (Mattson III) (quoting Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 349, 131 S. Ct. 2541, 2550 (2011)) (alteration in original). ¶16 The party seeking certification bears the burden of showing the proposed class satisfies all four prerequisites of Rule 23(a). Roose v. Lincoln Cnty. Emple. Group Health Plan, 2015 MT 324, ¶ 16, 381 Mont. 409, 362 P.3d 40. When evaluating a proposed class, a trial court may need to probe beyond the pleadings to determine whether the class is suitable for certification. Sangwin, ¶ 15. In this way, certification entails a “rigorous analysis,” which may touch the merits of the class claim. Worledge v. 8 Riverstone Residential Grp., LLC, 2015 MT 142, ¶ 23, 379 Mont. 265, 350 P.3d 39; Sangwin, ¶ 15. At the same time, we have cautioned district courts against assessing “any aspect of the merits unrelated to a Rule 23 requirement.” Sangwin, ¶ 15 (citing Chipman, ¶ 44). We have explained this analysis with the following framework: (1) a district judge may certify a class only after making determinations that each of the Rule 23 requirements has been met; (2) such determinations can be made only if the judge resolves factual disputes relevant to each Rule 23 requirement and finds that whatever underlying facts are relevant to a particular Rule 23 requirement have been established and is persuaded to rule, based on the relevant facts and the applicable legal standard, that the requirement is met; (3) the obligation to make such determinations is not lessened by overlap between a Rule 23 requirement and a merits issue, even a merits issue that is identical with a Rule 23 requirement; (4) in making such determinations, a district judge should not assess any aspect of the merits unrelated to a Rule 23 requirement; and (5) a district judge has ample discretion to circumscribe both the extent of discovery concerning Rule 23 requirements and the extent of a hearing to determine whether such requirements are met in order to assure that a class certification motion does not become a pretext for a partial trial of the merits. Jacobsen, ¶ 29 (quoting Mattson v. Mont. Power Co., 2009 MT 286, ¶ 67, 352 Mont. 212, 215 P.3d 675 (Mattson II)). Admittedly, the precise burden at the certification stage has been muddled. In Morrow v. Monfric, Inc., 2015 MT 194, 380 Mont. 58, 354 P.3d 558, this Court stated that “[p]laintiffs must actually prove that they have satisfied the prerequisites for class certification.” Morrow, ¶ 10. Four months later, we stated in Roose that “the class action proponent need not prove each element with absolute certainty.” Roose, ¶ 14. ¶17 Relevant precedent establishes two fundamental standards for the “rigorous analysis” of class certification. First, the trial court must have some evidentiary basis for determining each Rule 23 requirement is satisfied. Comcast Corp. v. Behrend, ___ U.S. 9 ___, 133 S. Ct. 1426, 1432 (2013) (proposed class must “satisfy through evidentiary proof at least one of the provisions of Rule 23(b)”); Diaz v. Blue Cross & Blue Shield, 2011 MT 322, ¶ 31, 363 Mont. 151, 159, 267 P.3d 756 (Diaz I) (proposed class must present evidence or reasonable estimate of numerosity). “‘Rule 23 does not set forth a mere pleading standard.’” Chipman, ¶ 44 (quoting Wal-Mart, 564 U.S. at 350, 131 S. Ct. at 2551). Thus, a district court may not simply rely on the allegations of the parties’ pleadings. Morrow, ¶ 10 (“speculation or conclusory allegations are not sufficient”); Sangwin, ¶ 15 (“Actual, not presumed, conformance with Rule 23(a) is indispensable.”). We anticipate this rigorous analysis will involve some assessment of the parties’ factual contentions. Mattson II, ¶ 67 (trial judge must “resolve[ ] factual disputes relevant to each Rule 23 requirement”). Those facts may even touch on the merits of the plaintiff’s cause of action. Worledge, ¶ 23; Sangwin, ¶ 15 (citing Comcast, ___ U.S. at ___, 133 S. Ct. at 1432); Chipman, ¶ 44 (citing Wal-Mart, 564 U.S. at 351, 131 S. Ct. at 2551). ¶18 Second, beyond this essential evidentiary basis, the trial court has broad discretion at the certification stage. Worledge, ¶ 14; Sangwin, ¶ 15 (trial court must be “‘satisfied, after a rigorous analysis, the prerequisites of Rule 23(a) are met’”) (quoting Comcast, ___ U.S. at ___, 133 S. Ct. at 1432); Jacobsen, ¶ 29 (trial court has discretion to establish scope of discovery and hold evidentiary hearing before certification). While we are deferential to a trial court’s determinations regarding satisfaction of the Rule 23 requirements, we cannot affirm certification of a class when the record lacks evidence supporting a determination on a Rule 23 requirement. To hold otherwise would reduce the concept of “rigorous analysis” to a nullity. See Comcast, ___ U.S. at ___, 133 S. Ct. 10 at 1433. It would also mean the proposed class’s “burden” to satisfy the requirements of Rule 23 is no burden at all. ¶19 “We have a ‘long history of relying on federal jurisprudence when interpreting the class certification requirements of Rule 23.’” Jacobsen, ¶ 32 (quoting Chipman, ¶ 52). The U.S. Supreme Court has never clearly defined the burden of proof at certification, and federal courts are divided on the question. 3 William B. Rubenstein et al., Newberg on Class Actions § 7:21 (5th ed. 2013) [hereinafter 3 Rubenstein]. In recent years, the burden has trended toward more proof, with several circuits adopting the familiar preponderance of the evidence standard. See Teamsters Local 445 Freight Div. Pension Fund v. Bombardier, Inc., 546 F.3d 196, 202 (2d Cir. 2008); In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 307 (3d Cir. 2008); Messner v. Northshore Univ. HealthSystem, 669 F.3d 802, 811 (7th Cir. 2012); see also 3 Rubenstein, § 7:21. In light of the discussion that follows, we need not adopt a specific standard today, but we do recognize that certification requires at least some evidence to satisfy each of Rule 23’s requirements. With this burden in mind, we turn to the four prerequisites of Rule 23(a). A. Numerosity ¶20 A proposed class must be “so numerous that joinder of all members is impracticable.” M. R. Civ. P. 23(a)(1). There is no “bright-line number” that satisfies numerosity—impracticability must be determined on a case-by-case basis. Morrow, ¶ 9. It is well established that the proposed class “‘must present some evidence of, or reasonably estimate, the number of class members.’” Sangwin, ¶ 17 (quoting Diaz I, ¶ 31). 11 ¶21 Here, USAA admitted in a discovery response that 154 claims from Montana insureds were submitted to AIS from January 2012 through September 2015. The District Court concluded that this volume of claims, which represented only a fraction of the eight-year timeframe at issue, satisfied numerosity. USAA argues that this number does not actually represent the size of the proposed class, because the class is defined to include only those claimants who were denied coverage in whole or in part. ¶22 USAA has resisted Plaintiffs’ efforts to discover the number of denied claims, maintaining that a burdensome “line-by-line review in every file” would be necessary to determine which claimants were denied benefits. When the District Court certified the class, Plaintiffs had not yet filed a motion to compel discovery pursuant to M. R. Civ. P. 37. Although Plaintiffs subsequently filed a motion to compel, the District Court has not yet ruled upon the motion.1 Because the District Court had not yet considered the merits of the parties’ arguments for and against discovery, we will not wade into the parties’ apparent discovery dispute. ¶23 The District Court has broad discretion to establish the scope of certification-related discovery. 3 Rubenstein, § 7:4. Here, the District Court has not yet established that scope, and very little certification-related discovery is present in the record. As a consequence, we have no evidence of the number of claimants who had their claims denied in whole or in part. Any attempt to distill the 154 claims down to only those that were denied would be pure speculation. Moreover, we have no evidence regarding the claims filed or denied in the 2007 to 2012 timeframe. Because the record 1 Instead, the District Court granted a USAA motion to stay discovery during this appeal. 12 lacks evidence or a reasonable means of estimating the size of the class, Plaintiffs have not at this juncture satisfied their burden of proving numerosity. We therefore conclude that the District Court abused its discretion in finding numerosity was satisfied. ¶24 Plaintiffs cite Roose for the proposition that a class of one is certifiable if a district court reasonably concludes that other, unidentified, class members exist. In Roose, the defendants admitted the insurance policies they had issued contained an exclusion that violated Montana’s made whole doctrine. Roose, ¶ 23. Although the full extent of the class had not been determined before certification, all policyholders were entitled to equitable and injunctive relief. Roose, ¶ 21. Plaintiffs analogize the present case to Roose as follows: “in this case, it is known that systematically, USAA refers adjustment of its med pay claims to AIS. AIS, in turn, systematically applies computer algorithms to review the files for any possible means to deny the claims in whole or in part.” ¶25 The record before us lacks any mention of an algorithm. In fact, Plaintiffs have provided virtually no evidence of how AIS actually reviews claims. USAA has admitted that all medical payment claims are sent to AIS, but USAA has not conceded that any of its practices are illegal. Unlike the contracts at issue in Roose, the systematic conduct that the Plaintiffs allege caused them harm—the AIS computer algorithms—has not been substantiated at this point. Roose is therefore inapposite. B. Commonality ¶26 Rule 23(a)(2) requires common questions of law or fact. The U.S. Supreme Court has observed that “any competently crafted class complaint literally raises common questions.” Wal-Mart, 564 U.S. at 349, 131 S. Ct. at 2551 (internal quotation omitted). 13 In Wal-Mart, a class of 1.5 million former and current employees of the nation’s largest private employer alleged gender discrimination in pay and promotions. Wal-Mart, 564 U.S. at 342–43, 131 S. Ct. at 2547. The Court observed that the class unsurprisingly raised certain superficial, common questions, such as: “Do all of us plaintiffs indeed work for Wal-Mart? Do our managers have discretion over pay?” Wal-Mart, 564 U.S. at 349, 131 S. Ct. at 2551. These questions were an insufficient basis for class certification because they did not “demonstrate that the class members ‘have suffered the same injury,’” as commonality requires. Wal-Mart, 564 U.S. at 349–50, 131 S. Ct. at 2551 (quoting Gen. Tel. Co. of the Sw. v. Falcon, 457 U.S. 147, 157–58, 102 S. Ct. 2364, 2370–71 (1982)). Before Wal-Mart, we construed commonality as a “relatively low burden for plaintiffs.” Jacobsen, ¶ 31 (citing Diaz I, ¶ 32). We have since recognized that Wal-Mart “significantly tightened the commonality requirement,” Chipman, ¶ 47, but we have not yet adopted Wal-Mart as the standard for commonality in Montana. Mattson III, ¶ 37. ¶27 Here, the District Court determined the proposed class satisfied the Wal-Mart standard. The District Court quoted Jacoben’s observation that Wal-Mart is satisfied when the proposed class alleges “that a defendant’s programmatic conduct violates the law.” Jacobsen, ¶ 44. The District Court then certified the class with the following common question: “[w]hether or not USAA violated Montana law with respect to its med-pay claims handling practices.” Because the class as defined included only those claimants who “had their claim denied in whole or in part following a ‘file review’ by AIS or because of an asserted ‘coding error,’” we can infer that the District Court 14 determined the AIS review process was the “programmatic conduct” that satisfied commonality. ¶28 In Jacobsen, the plaintiff class submitted evidence of a specific, programmatic, claims handling practice, the existence of which was undisputed. A consulting firm had advised Allstate that insureds represented by an attorney typically settled claims for double or triple the cost of an unrepresented insured’s claims. Jacobsen, ¶ 19. To reduce costs, Allstate implemented a new claims handling process whereby adjusters intimated to unrepresented claimants that they would recover more from their claim if they proceeded without an attorney. Jacobsen, ¶ 24. The uniform application of this process allegedly caused each class member damages in the form of reduced settlement values. ¶29 Here, the mere act of sending claims to an outside contractor like AIS—without more—is not the type of programmatic conduct that satisfies Jacobsen and Wal-Mart. The question of whether all class members had claims reviewed by AIS is precisely the type of superficial question that fails to demonstrate a common injury. To satisfy commonality, the question would have to address the common injury allegedly shared across the class. In other words, the question would have to identify the allegedly unlawful, systematic program in place at AIS that causes the denials, just as the plaintiffs in Jacobsen identified the specific claims handling process that led to diminished settlement values for each class member. ¶30 On appeal, Plaintiffs argue that AIS applies an algorithm to process and ultimately deny medical claims in whole or in part. Nothing in the record supports this claim, and the District Court did not mention an algorithm in its certification order. Plaintiffs 15 contend that the present action alleges essentially the same programmatic conduct as Horton and MySpine. We find Plaintiffs’ analogy to these cases unpersuasive. Because Plaintiffs have submitted only excerpts from these cases, the record lacks sufficient context to determine whether the claims are actually similar. The excerpt from Horton and the NAIC memo explaining it make clear the excerpt was not from a final settlement agreement. Indeed, nothing in the record indicates Horton was ever settled. Further, the MySpine excerpt does not mention AIS file reviews. While MySpine addresses claims denied for certain “reason codes,” the record does not indicate whether these reason codes are related to the coding errors alleged by Plaintiffs. In short, Plaintiffs’ reference to these two seemingly unrelated cases does nothing to advance their claims of programmatic conduct connecting Byorth, McKean, and the absent class members. ¶31 Plaintiffs also encourage us to take judicial notice of an article from the San Antonio Express-News that claims USAA has been “dogged by lawsuits” that take issue with the company’s handling of medical payments. This article was never submitted to the District Court and did not serve as a basis for certification. Moreover, judicial notice of the article is wholly inappropriate here: the facts explained in the article were not generally known in the District Court’s jurisdiction, nor were the facts “capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned,” as judicial notice requires. M. R. Evid. 201(b). We also note that the article focused on the present case and quoted Plaintiffs’ counsel extensively. We will not take judicial notice of facts alleged by Plaintiffs’ counsel simply because they were printed in a newspaper. 16 ¶32 Upon a full review of the record presently before us, we cannot locate any evidence of the alleged algorithm employed by AIS to systematically deny claims. In fact, the AIS reviews of McKean’s claims that USAA attached to its brief in opposition to certification include a physician’s analysis of documents submitted with the claim. If anything, this evidence tends to show an individualized review, rather than a systematically-applied algorithm. Throughout their brief, Plaintiffs cite their complaint and the District Court’s certification order as evidence of systematic claims handling processes. As previously explained, the Plaintiffs’ complaint is not a sufficient basis for class certification. See Chipman, ¶ 44 (“Rule 23 does not set forth a mere pleading standard.” (internal quotation marks omitted)). Similarly, the District Court’s order does not direct us to evidence in the record supporting certification. Because the record lacks an evidentiary basis for finding commonality, we conclude that the District Court abused its discretion by granting certification before the proposed class had met its burden of showing commonality. Because this case comes before us with minimal discovery, we leave it to the District Court to determine whether Plaintiffs can demonstrate, after additional discovery, a common injury through an algorithm or some other programmatic conduct. C. Typicality ¶33 The typicality requirement of Rule 23(a)(3) ensures the named class members’ interests align with the interests of absent class members. Jacobsen, ¶ 51 (citing Mattson III, ¶ 21). This alignment occurs when “the claims or defenses of the representative parties are typical of the claims or defenses of the class.” M. R. Civ. P. 23(a)(3). 17 “Typicality is not a demanding standard.” Worledge, ¶ 34 (citing Sangwin, ¶ 21). If the class claims are based on the “same event, practice, or course of conduct” and “the same legal or remedial theory,” typicality is satisfied. Worledge, ¶ 34 (internal quotation marks omitted). Moreover, the event, practice, or course of conduct need not be identical for all members of the class. Worledge, ¶ 34. ¶34 Typicality and commonality tend to overlap, as both measure the relationship of the members’ class claims. Worledge, ¶ 34. The difference between typicality and commonality is a matter of perspective: commonality looks to the questions of law or fact common to the class as a whole, while typicality focuses more closely on the named representatives’ relationship to the rest of the class. 1 William B. Rubenstein et al., Newberg on Class Actions § 3:31 (5th ed. 2011) [hereinafter 1 Rubenstein]. ¶35 In its certification order, the District Court stated that USAA did not dispute typicality. On appeal, USAA directs us to three pages of its brief opposing certification wherein the company argues that Byorth is not a member of the class and McKean’s claims are not “co-extensive” with the class. USAA reasons that, because Byorth eventually received the maximum benefit provided under his policy, he is not a member of the class of claimants who had claims denied in whole or in part. As for McKean, USAA notes that McKean does not allege that a coding error was the cause of her benefit denial. Therefore, USAA argues that McKean’s claims are not co-extensive with those of the larger class of claimants who were denied coverage due to an AIS file review or an asserted coding error. 18 ¶36 Plaintiffs’ complaint alleges several counts, including violations of the UTPA for misrepresenting pertinent facts or insurance policy provisions, refusing to pay claims without conducting a reasonable investigation, and failing to promptly settle claims once liability became reasonably clear. Assuming Plaintiffs can satisfy commonality with a showing of the alleged algorithm, the class UTPA claim will be shared across all members of the class, including the named representatives, Byorth and McKean. The fact that Byorth eventually received what he was owed under the contract does not absolve USAA of the alleged UTPA violations. See McVey v. USAA Cas. Ins. Co., 2013 MT 346, ¶¶ 24–25, 372 Mont. 511, 313 P.3d 191 (eventual payment does not shield insurer from UTPA liability); Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 149, 345 Mont. 12, 192 P.3d 186. Because Byorth is a member of the class, and he has alleged that a coding error resulted in denial of benefits, the two representative class members’ claims are reasonably co-extensive with the class as a whole. ¶37 We reiterate that the record before us lacks evidence of the alleged programmatic conduct used by AIS to injure the class as a whole, which must be shown to establish commonality. Because typicality and commonality overlap to the extent both are measured by the reach of common questions of law or fact, we cannot overlook the fact that the record does not contain evidence of the alleged common question that unites not only the class as a whole, but also the named representatives with the absent class members. We therefore conclude that the District Court abused its discretion in finding typicality satisfied, though not for the reasons claimed by USAA. We leave it to the 19 District Court to determine, with the benefit of additional discovery, whether Plaintiffs can satisfy typicality. D. Adequacy ¶38 Rule 23(a)(4) ensures “the representative parties will fairly and adequately protect the interests of the class.” M. R. Civ. P. 23(a)(4). This portion of Rule 23 looks to the attorney representing the class, who must “be qualified, experienced, and generally capable” of conducting the class action. Jacobsen, ¶ 58 (internal quotation marks omitted). Adequacy also prevents certification of a class if the representative parties’ interests are “antagonistic to the class interests.” Worledge, ¶ 39; accord 1 Rubenstein, § 3:54. ¶39 USAA does not dispute adequacy on appeal. In a footnote to its opening brief, USAA reserves a potential challenge to the adequacy of the named representatives until it has taken discovery from Plaintiffs. Because we remand for additional discovery, we decline to address adequacy further at this juncture. ¶40 2. Did the District Court abuse its discretion in certifying the class under M. R. Civ. P. 23(b)(3)? ¶41 After a proposed class has shown it satisfies the four elements of Rule 23(a), a district court may certify the class if it fits within one of the class categories provided in Rule 23(b). The Rule 23(b)(3) class is appropriate only if “the questions of law or fact common to the class members predominate over any questions affecting only individual members” and “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.” M. R. Civ. P. 23(b)(3). These dual 20 requirements of Rule 23(b)(3) are commonly referred to as predominance and superiority. Regardless of the category of class action a district court chooses, the court must conduct a rigorous analysis of all Rule 23 requirements, including Rule 23(b). Comcast, ___ U.S. at ___, 133 S. Ct. at 1432 (noting that the analytical principles that govern Rule 23(a) also govern Rule 23(b)). ¶42 Here, the District Court did not mention Rule 23(b) until the penultimate page of its certification order. Even then, the District Court did so in passing: “Under Mont. R. Civ. P. 23(b)(3) the Court certifies the following class . . . .” It is unclear whether the District Court undertook any analysis in determining that the class satisfied Rule 23(b)(3). We therefore conclude the District Court abused its discretion by certifying the class under Rule 23(b)(3) without assessing predominance and superiority. ¶43 USAA urges us to conclude that the record shows the proposed class could never satisfy the predominance and superiority requirements of Rule 23(b)(3). USAA reasons that each class member’s claims involve individualized determinations of medical reasonableness and necessity, and that these individual questions would predominate over common questions. USAA also maintains that the claims Plaintiffs have raised here are frequently litigated on an individual basis, making the class action an unnecessary and inferior method of resolution. Because the District Court has not analyzed these arguments, we will not entertain them on appeal. We therefore remand to the District Court to consider the parties’ evidence and arguments regarding Rule 23(b)(3). 21 CONCLUSION ¶44 For the reasons stated above, we reverse the order of the District Court granting class certification. We remand for further certification-related discovery and an analysis of the Rule 23(b) requirements. To be clear, we do not conclude that the class could never be certified. Rather, the District Court may certify the class provided Plaintiffs satisfy their burden of showing each Rule 23 requirement is met. ¶45 Reversed and remanded. /S/ PATRICIA COTTER We Concur: /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ JIM RICE Justice Michael E Wheat, dissenting. ¶46 I dissent from the majority’s decision to reverse the District Court’s class certification in this case. The foundation of all class action suits is consumer protection and judicial economy. For this reason we have provided the district courts with broad discretion in certifying classes and managing the litigation related thereto. As we stated in Roose, certification orders “‘are not frozen once made’; instead, the District Court maintains discretion to alter the class definition as the case proceeds.” Roose, ¶ 14 (internal citation omitted). 22 ¶47 Here the District Court exercised its broad discretion by certifying a class of Montana consumers who are alleged victims of USAA’s acknowledged and long-standing practice of outsourcing claims handling to be conducted by a computer algorithm which is programmed to evaluate medical payment claims. The District Court invoked its discretion to certify the class based on the facts and arguments presented to it by the parties. The District Court’s order certifying the class demonstrates its clear grasp of the parameters of the case and the obvious need for the court to manage and control the course of litigation. Therefore, I would affirm the District Court. ¶48 Because the matter is being remanded for further discovery, the District Court will be able to employ its broad discretion in managing the course and scope of discovery. And, because the discovery will be focused on USAA’s claims handling practices and Byroth and McKean’s efforts to re-establish class certification, I would encourage the court to schedule a discovery conference as provided by M. R. Civ. P. 16 and 26 so the parties will fully understand the court’s procedural expectations. /S/ MICHAEL E WHEAT Chief Justice Mike McGrath joins the Dissent of Justice Michael E Wheat. /S/ MIKE McGRATH

November 22, 2016

7f962963-3e67-4b37-bccd-639a2caa32db

State v. Harrison

2016 MT 271

DA 15-0707

Montana

Montana Supreme Court

DA 15-0707 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 271 STATE OF MONTANA, Plaintiff and Appellant, v. JAMES JOHN HARRISON, Defendant and Appellee. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 15-5 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana William E. Fulbright, Ravalli County Attorney, Thorin Geist, Deputy County Attorney, Hamilton, Montana For Appellee: John D. Greef, Attorney at Law, Hamilton, Montana Submitted on Briefs: September 14, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 15-0707 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 The State of Montana appeals an order of the Twenty-First Judicial District Court, Ravalli County, denying the State’s motion to conform the District Court’s written judgment to its oral pronouncement of James John Harrison’s sentence for convictions related to poaching nine black bears. We address: 1. Whether the District Court correctly determined that Harrison may petition for early termination of his lifetime prohibition on hunting, fishing, and trapping. 2. Whether the District Court correctly determined that Harrison may petition for early termination of his lifetime prohibition on accompanying any hunter, angler, or trapper. ¶2 We affirm in part and reverse in part. PROCEDURAL AND FACTUAL BACKGROUND ¶3 On June 25, 2015, Harrison pled guilty to—and was convicted of—five felony charges: unlawful possession, shipping, or transportation of a game fish, bird, game animal, or fur-bearing animal pursuant to a common scheme in violation of § 87-6-202(1), (5), and (6)(f), MCA; tampering with witnesses and informants in violation of § 45-7-206(1)(a), MCA; tampering with or fabricating physical evidence in violation of § 45-7-207, MCA; and two counts of tampering with public records or information in violation of § 45-7-208, MCA. The charges all stemmed from Harrison’s illegal baiting, killing, and transportation or assistance in illegal baiting, killing, and transportation of nine black bears between May 2009 and June 2014. On August 28, 2015, the District Court orally sentenced Harrison to ten years in prison, all suspended, with several conditions, including a “lifetime loss of hunting, trapping and 3 accompaniment privileges.” On September 9, 2015, the District Court issued its written judgment, imposing a ten-year suspended prison sentence and twenty-six conditions. The two conditions at issue in this appeal, Conditions 23 and 24, provide: 23. The Defendant shall be prohibited from hunting, fishing, or trapping in the State of Montana during his lifetime. Pursuant to §46-18-208, the Defendant may file a petition for early termination of this sentence and/or this condition after 2/3 of the suspended sentence time has elapsed. 24. The Defendant shall be prohibited from accompanying in the field any hunter, angler, or trapper in the State of Montana during his lifetime. Pursuant to §46-18-208, the Defendant may file a petition for early termination of this sentence and/or this condition after 2/3 of the suspended sentence time has elapsed. ¶4 On October 5, 2015, the State filed a motion to conform the District Court’s written judgment to its oral pronouncement of Harrison’s sentence. The State argued that the District Court’s written judgment did not conform to its oral pronouncement of Harrison’s sentence because the District Court never mentioned at sentencing that Harrison could seek an early termination of his lifetime hunting, fishing, trapping, and accompaniment prohibitions. The State further argued that Harrison’s loss of these privileges is an independent criminal penalty, not a condition of his suspended sentence. According to the State, allowing Harrison to petition for an early termination of his lifetime prohibitions would render the sanctions meaningless because, “when a [d]istrict [c]ourt terminates the time remaining on a sentence pursuant to § 46-18-208, MCA, all of the conditions that were imposed as a condition of that sentence are also terminated.” On October 26, 2015, the District Court issued an order denying the State’s motion. The District Court concluded that the lifetime prohibitions were conditions of Harrison’s 4 sentence, not independent penalties, and therefore modifiable pursuant to § 46-18-208, MCA. The State appealed. STANDARDS OF REVIEW ¶5 We generally review a criminal sentence for legality; “that is, whether the sentence falls within the statutory parameters.” State v. Duong, 2015 MT 70, ¶ 11, 378 Mont. 345, 343 P.3d 1218. A district court’s interpretation of a statute is a question of law, which we review for correctness. Duong, ¶ 11. DISCUSSION ¶6 1. Whether the District Court correctly determined that Harrison may petition for early termination of his lifetime prohibition on hunting, fishing, and trapping. ¶7 Pursuant to § 87-6-202(6)(f), MCA, a person convicted of possessing, shipping, or transporting an unlawfully killed game fish, bird, game animal, or fur-bearing animal worth more than $1,000 “shall forfeit . . . the privilege to hunt, fish, or trap in this state for not less than 3 years up to a revocation for life from the date of conviction.” ¶8 Section 46-18-208(1), MCA, provides: When imposition of a sentence has been deferred or execution of a sentence has been suspended, the . . . defendant may file a petition to terminate the time remaining on the sentence if: . . . (b) in the case of a suspended sentence: (i) the defendant has served two-thirds of the time suspended; and (ii) the defendant has been granted a conditional discharge from supervision under 46-23-1011 and has demonstrated compliance with the conditional discharge for a minimum of 12 months. ¶9 The oral pronouncement of a criminal sentence in the presence of the defendant is the “legally effective sentence and valid, final judgment.” State v. Claassen, 5 2012 MT 313, ¶ 16, 367 Mont. 478, 291 P.3d 1176 (quoting State v. Lane, 1998 MT 76, ¶ 40, 288 Mont. 286, 957 P.2d 9). In the event of a conflict between the oral pronouncement and the written judgment, the oral pronouncement of a sentence controls. Claassen, ¶ 16. ¶10 The State contends that Harrison’s lifetime hunting, fishing, and trapping prohibition is not subject to early termination under § 46-18-208, MCA, because it is a separate penalty, not a condition of his suspended sentence. We agree. Statutory interpretation “must be reasonable,” § 1-3-233, MCA, and “should not lead to absurd results if a reasonable interpretation would avoid it.” State v. Sommers, 2014 MT 315, ¶ 22, 377 Mont. 203, 339 P.3d 65. Section 46-18-208, MCA, applies to early termination of “the time remaining” on a suspended sentence. Section 87-6-202(6)(f), MCA, provides a separate, independent penalty, that allows for a lifetime prohibition on hunting, fishing, or trapping. It is not subject to early termination under § 46-18-208, MCA. Holding otherwise would lead to the absurd result of rendering Harrison’s “lifetime” prohibition meaningless, because it would end not with Harrison’s lifetime, but with the termination or expiration of his sentence. ¶11 The District Court incorrectly applied the law when it denied the State’s petition to conform its written judgment to its oral pronouncement by striking the provision in Condition 23 that allows Harrison to petition for early termination of his lifetime hunting, fishing, and trapping prohibition. 6 ¶12 2. Whether the District Court correctly determined that Harrison may petition for early termination of his lifetime prohibition on accompanying any hunter, angler, or trapper. ¶13 Unlike his lifetime hunting, fishing, and trapping prohibition, Harrison’s lifetime prohibition on accompanying any hunter, angler, or trapper is not provided for by statute. Because there is no independent statutory basis for it, the accompaniment prohibition would necessarily be a condition of Harrison’s sentence, not an independent penalty. Although the District Court did not expressly advise Harrison that he had the right to petition for early termination of this condition during its oral pronouncement, in denying the State’s motion to alter or amend the judgment, the District Court correctly noted that petitioning for early termination of a suspended sentence pursuant to § 46-18-208, MCA, “is a statutory right, enacted by the Legislature, and therefore has no need to be orally expressed.” Whether or not the District Court orally advised Harrison of his statutory right to seek early termination of his suspended sentence—including the lifetime prohibition on accompanying any hunter, angler, or trapper—does not change the fact that Harrison has that right. The District Court merely advised him of that right in the written judgment. It did not substantively alter the oral pronouncement or create a conflict between the oral pronouncement and the written judgment. CONCLUSION ¶14 We affirm in part and reverse in part the District Court’s order. We remand for the District Court to strike the following sentence from Condition 23 of its written judgment: “Pursuant to §46-18-208, the Defendant may file a petition for early 7 termination of this sentence and/or this condition after 2/3 of the suspended sentence time has elapsed.” /S/ JAMES JEREMIAH SHEA We Concur: /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JIM RICE Justice Patricia Cotter, dissenting. ¶15 I dissent. I would uphold the order of the District Court in all respects. ¶16 The Court states at ¶ 10 that it agrees with the State’s contention that the lifetime hunting, fishing, and trapping prohibition imposed pursuant to § 87-6-202(6)(f), MCA, is a separate penalty and not a condition of Harrison’s suspended sentence. While the lifetime ban is indeed a penalty, it is also clearly a condition of Harrison’s suspended sentence, as the Court itself notes in ¶ 3. This being so, the provisions of § 46-18-208, MCA, permitting early termination of a suspended sentence may apply. ¶17 There is no language in § 87-6-202, MCA, to support the proposition that a penalty which is imposed as a condition of sentence may not be terminated early pursuant to § 46-18-208, MCA. Section 87-6-202(6)(f), MCA, requires only that, if the value of the game exceeds a certain dollar figure, the person shall forfeit his privilege to hunt, fish, or trap for not less than 3 years. Here, the sentence imposed was a prison sentence of 10 years with all time suspended. Thus, the earliest opportunity in this case for either the 8 prosecutor or defendant to invoke the benefit of § 46-18-208, MCA, would be after two-thirds of the suspended time—or 6 years and 8 months—has been served. This penalty would exceed by 3 years and 8 months the minimum forfeiture requirements of § 87-6-202(6)(f), MCA. ¶18 Similarly, § 46-18-208, MCA, contains no language precluding its application to sentences involving conditions of suspended sentences that can also be considered penalties. Therefore, neither statute supports the Court’s categorical statement in ¶ 10 that the penalty imposed under Title 87 is not subject to early termination under § 46-18-208, MCA, nor does the Court cite any statutory reference or case law for its conclusion. The Court’s conclusion is ipse dixit and nothing more. ¶19 Finally, I would conclude that the fact that the oral pronouncement of sentence did not reference § 46-18-208, MCA, or the possibility of early termination of the suspended sentence is of no consequence. The written sentence merely informed Harrison of his right to seek early termination of his suspended sentence—a statutory right that every defendant enjoys regardless of whether it is referenced by a court at sentencing. ¶20 For the foregoing reasons, I dissent. /S/ PATRICIA COTTER

October 25, 2016

964263b1-2304-4c74-a7ad-ddc86a2cfd96

Marriage of Lee

2016 MT 295N

DA 16-0082

Montana

Montana Supreme Court

DA 16-0082 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 295N IN RE THE MARRIAGE OF: SANDRA MURRAY LEE, Petitioner and Appellee, And AMOS ABRAHAM LEE, Respondent and Appellant. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DR 15-32 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert W. Snively, Attorney at Law, Hardin, Montana For Appellee: Ann C. German, Attorney at Law, Libby, Montana Submitted on Briefs: October 5, 2016 Decided: November 15, 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 16-0082 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Amos Abraham Lee appeals an order of the Nineteenth Judicial District Court, Lincoln County, denying his motion to modify child support as to arrears before the date he filed the motion. We address whether the District Court erred in its ruling. We affirm. ¶3 In June 2007, Amos and Sandra Murray Lee dissolved their marriage. Pursuant to the dissolution decree, Amos was required to pay $934 per month in child support for the parties’ two children. A letter from Sandra to Amos, dated October 20, 2009, and signed by both parties (2009 Letter), states, in relevant part: “You are no longer required to pay child support . . . .” On December 22, 2014, Amos filed a motion to modify child support, requesting that the District Court adopt the 2009 Letter as a child support modification order. Sandra opposed the motion, and the District Court held a hearing, during which both parties testified. On January 8, 2016, the District Court denied Amos’ motion to modify child support as to arrears before the date he filed the motion but held: “The motion to modify child support may proceed as to modification after the date of filing.” Amos appeals the District Court’s denial of his motion as to arrears, contending that the 2009 Letter modified his child support obligation. 3 ¶4 We review a district court’s findings of fact for clear error and its conclusions of law for correctness. In re Marriage of Albinger, 2002 MT 104, ¶ 9, 309 Mont. 437, 47 P.3d 820. “Additionally, we review a district court’s decision regarding modifications to child support to determine whether the district court abused its discretion.” Albinger, ¶ 9. ¶5 Pursuant to § 40-4-208(1), MCA, a district court may modify a child support order “only as to installments accruing subsequent to actual notice to the parties of the motion for modification.” Additionally, “[i]t is ‘established law in Montana that neither laches nor equitable estoppel applies to recovery of child support arrears.’” Pfeifer v. Pfeifer, 2013 MT 129, ¶ 14, 370 Mont. 158, 301 P.3d 821 (quoting Schmitz v. Engstrom, 2000 MT 275, ¶ 14, 302 Mont. 121, 13 P.3d 38). The only exception occurs when the parties establish, by “clear and convincing evidence,” that there is: (1) a substantial and continuing change in circumstances rendering the original support decree inequitable; (2) a mutual agreement between the parties made in good faith; and (3) conduct consistent with the agreement over a period of years. Pfeifer, ¶ 14. The District Court denied Amos’ motion on the basis that “[t]here was no agreement in good faith between the parties rendering the collection of arrears in child support inequitable,” because the District Court determined that Sandra agreed to waive child support only to avoid further custody battles during her move from Montana to Utah. ¶6 “[T]he weight of the evidence and the credibility of the witnesses are exclusively the province of the trier of fact and, in the event of conflicting evidence, it is within the province of the trier of fact to determine which will prevail.” In re Marriage of Bliss, 4 2016 MT 51, ¶ 17, 382 Mont. 370, 367 P.3d 395 (citation omitted). During the December 18, 2015 hearing, the parties presented conflicting evidence. Sandra testified that, when she told Amos she was moving to Utah, Amos told her he would only let her take the children if she drafted an agreement stating that he no longer needed to pay child support. Amos testified that he never proposed not paying child support. The District Court, as the trier of fact, weighed the evidence before it and found that Sandra’s testimony was more credible. This finding is not clearly erroneous. Therefore, the District Court’s finding that Amos did not supply “clear and convincing evidence” that the 2009 Letter was drafted “in good faith” is not clearly erroneous. See Pfeifer, ¶ 14. Accordingly, the District Court correctly concluded that Amos did not meet the exception to the notice-of-motion requirement set forth in § 40-4-208(1), MCA. See Pfeifer, ¶ 14. The District Court did not abuse its discretion by denying Amos’ motion to retroactively modify the parties’ child support arrangement. ¶7 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s interpretation and application of the law were correct, its findings of fact are not clearly erroneous, and its ruling was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA 5 We Concur: /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

November 15, 2016

34dd9ea5-3bb4-4845-bd26-13ae38101fc2

Granite County Commissioners v. McDonald

2016 MT 281

DA 16-0126

Montana

Montana Supreme Court

DA 16-0126 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 281 GRANITE COUNTY BOARD OF COMMISSIONERS, Claimant, Objector and Appellee, v. ESTHER J. MCDONALD, Objector and Appellant. APPEAL FROM: Montana Water Court, Cause No. 76GJ-40 Honorable Russ McElyea, Chief Water Judge COUNSEL OF RECORD: For Appellant: David T. Markette, Dustin M. Chouinard, Markette & Chouinard, P.C., Hamilton, Montana For Appellee: Blaine C. Bradshaw, Granite County Attorney, Philipsburg, Montana Submitted on Briefs: July 20, 2016 Decided: November 3, 2016 Filed: __________________________________________ Clerk 11/03/2016 Case Number: DA 16-0126 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Esther McDonald appeals from the Water Court’s Order filed January 27, 2016. We affirm. ¶2 We restate the issues on appeal as follows: Issue one: Did the Water Court err in its interpretation of the 1906 Decree in the case of Montana Water, Electric and Mining Co. v. Schuh? Issue two: Did the Water Court err in deciding whether to apply claim preclusion doctrines to limit Granite County’s arguments concerning application of the Schuh Decree? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case arises from McDonald’s objection to three water right claims owned by Granite County, 76GJ 40733-00, 76GJ 94401-00, and 76GJ 94402-00. The County’s water claims all involve its storage of Flint Creek water in Georgetown Lake reservoir. McDonald claims senior water rights in the natural flow of Flint Creek, which she diverts from the Creek below Georgetown Lake. Both the County claims and McDonald’s objections arise from the terms of the 1906 Decree in Montana Water, Electric and Mining Co. v. Schuh, by the Circuit Court of the United States, Ninth Circuit, District of Montana. Both parties are successors in interest to water rights decreed to parties in the Schuh case. Granite County is a successor to the plaintiff Montana Water, Electric and Mining Company, and McDonald is a successor to one of the defendants. ¶4 The County’s predecessors built a dam on Flint Creek, creating a reservoir now known as Georgetown Lake. The purpose of the reservoir was to generate electric power. The County owns the dam and hydroelectric facility, which it acquired from the Montana 3 Power Company in 1997. The operation of the facility is subject to regulation by the Federal Energy Regulatory Commission (FERC). Two of the County’s water rights used in the reservoir-hydroelectric facility arise from the Schuh Decree while the third is a subsequent use right. The County’s rights total 1200 miner’s inches1 or 30 cubic feet per second. The water used for power generation is returned to Flint Creek below the dam. STANDARD OF REVIEW ¶5 This Court reviews a lower court’s interpretation of a judgment as a question of law to determine whether it is correct. Harland v. Anderson Ranch Co., 2004 MT 132, ¶ 20, 321 Mont. 338, 92 P.3d 1160. DISCUSSION ¶6 Issue one: Did the Water Court err in its interpretation of the 1906 decree in the case of Montana Water, Electric and Mining Co. v. Schuh? ¶7 McDonald objected to the County’s water right claims in proceedings before the Water Court, contending that the Schuh Decree requires the County to maintain a constant flow of 30 CFS in Flint Creek below the Georgetown Lake dam during irrigation season, regardless of the amount of natural flow into the Lake. McDonald requested that “information remarks” be included with the abstract of each of the County’s water rights from Flint Creek, to provide as follows: At all times during the irrigation season of each year the owner of this right is to let, turn down and cause to flow into the Flint Creek channel below the power generation facilities not less than 1200 miner’s inches (30 CFS) of water. 1 A miner’s inch of water is equal to a flow of 2.5 cubic feet of water per second. Section 85-2-103(2), MCA. 4 Granite County counters that the downstream irrigators are entitled to have the natural inflow of Flint Creek released below the dam, but that it is not required to release storage water from the reservoir when the natural inflow from Flint Creek falls below 30 CFS. Granite County contends that its obligation to McDonald is to assure that the natural inflow of Flint Creek passes through Georgetown Lake and the hydroelectric facility for release back into the natural channel. ¶8 The Water Court defined “natural flow” for purposes of this case as the amount of water that would flow through a stream if there were no interference from the dam. The Water Court defined storage water as impoundment of the natural flow of a stream for use during times of low natural flow. ¶9 The Water Court considered the terms of the Schuh Decree as it affected the respective rights of the parties, summarized as follows: Georgetown Lake was created in 1901 when the Montana Water, Electric Power and Mining Company (the Company) built a dam across Flint Creek, creating Georgetown Lake. The Company brought the Schuh action because of claims by downstream irrigators that the reservoir was interfering with their senior water rights. The Schuh Decree determined that the average flow of Flint Creek “has not exceeded and does not exceed” 1200 miner’s inches of water, but the Decree did not define the time of the year covered by that determination. The Water Court construed that flow finding to apply to the natural flow of Flint Creek during the irrigation season because the dispute before the Schuh Court pertained to disputes over irrigation rights. The Water Court determined that the Schuh Court’s reference to an average flow “impliedly recognizes that natural flows vary from season to 5 season and from year to year, with actual flows often falling either above or below the described average” which is “normal on Montana streams.” ¶10 The Schuh Court determined that the Company returned 1200 miner’s inches of water to Flint Creek “without deterioration in quality or quantity,” and that the Company had not impeded “the ordinary and natural flow or passage of the water of said Flint Creek.” Therefore, the Schuh Court concluded that none of the downstream water users had been damaged by operation of the dam and hydroelectric plant. The Water Court determined that these statements by the Schuh Court “recognize that the [downstream water users] rights were based on natural flow.” ¶11 The Schuh Decree also included a determination of the water rights of the downstream appropriators, totaling about 5000 miner’s inches of water. The Decree listed the flow of the appropriation right of each downstream appropriator for irrigation purposes at the water duty of one and one half miner’s inches of water per acre. While most of the downstream rights were senior to the Company’s rights, the Decree did not grant any downstream user a right in the storage water behind the Georgetown Lake dam. The Water court noted that the Schuh Decree entitled the Company to continue using its water rights as long as it “uses the water in such a manner that every appropriator further down the stream shall have, during the irrigating season of each year, the use and enjoyment of it substantially according to its natural flow.” (Emphasis added.) The Water Court reasoned that the term “every appropriator” must cover only appropriators with rights senior to those held by the Company, because the Company had no duty under 6 the principles of prior appropriation to preserve the flow of Flint Creek for junior appropriators. ¶12 The root of the present controversy is the statement in the Schuh Decree that during the irrigation season the Company must “let, turn down and cause to flow in the channel of said creek, to-wit Flint Creek, below its electric plant, not less than 1200 miner’s inches of water.” The Schuh Court enjoined the Company from “diverting from the channel of Flint Creek the water herein decreed to [downstream users].” At the same time, the Schuh Court recognized that the downstream users’ rights were limited to the natural flow of Flint Creek, enjoining them from demanding that the Company release “any greater amount of water than the average natural flow of said stream which in the irrigating season of each year does not exceed 1200 miner’s inches or 30 cubic feet per second of water.” The Water Court determined that this language supported Granite County’s argument that the Schuh Decree did not require it to release storage water to benefit downstream users. ¶13 Both sides moved for summary judgment in the Water Court, McDonald relying upon the portion of the Schuh Decree that ordered that 1200 miner’s inches must be discharged into Flint Creek “at all times” during the irrigation season. The Water Court found that McDonald’s position conflicts with the express recognition in the Schuh Decree that the rights of the downstream users were limited to the natural flow of Flint Creek and with the injunction against the downstream users from demanding any more than the natural in-flow of Flint Creek. The Water Court found no indication that the Schuh Court intended to depart from the established Montana precedent that “makes a 7 clear distinction between the natural flow rights held by McDonald and the storage rights held by Granite County.” ¶14 The Water Court explained that limiting the downstream users to the natural flow of Flint Creek was consistent with established Montana law. The Water Court cited Beaverhead Canal Co. v. Dillon Electric Light & Power, 34 Mont. 135, 140, 85 P. 880, 882 (1906) (appropriator’s rights are limited to the natural conditions of the stream at the time of the appropriation); Kelly v. Granite Bi-Metallic, 41 Mont. 1, 108 P. 785 (1910) (stored water is not available to satisfy rights of downstream users); Donich v. Johnson, 77 Mont. 229, 250 P. 963 (1926) (downstream users had the right to use the natural flow of the stream to the extent of their appropriations); and Federal Land Bank v. Morris, 112 Mont. 445, 116 P.2d 1007 (1941) (water released from artificial impoundments is not part of the natural flow). The principle of separating stored water from the natural flow is recognized by Montana statute, § 85-2-411, MCA. ¶15 The Water Court summarized the relationship between upstream storage and downstream senior appropriators: To summarize, downstream appropriators of irrigation rights with senior priority dates are entitled to the natural flow of a stream as it existed at the time of appropriation but they cannot demand release of water from storage when natural flows are unavailable. This has long been the rule in Montana. And, although the Schuh Decree did not expressly state this rule, the language of the Decree implicitly recognizes it. The Schuh Decree’s reference to natural flow was consistent with the law applicable to storage rights. That law required operators of reservoirs to make the natural flow of a stream available to senior downstream appropriators during time of shortage. Under this rule, natural flow can only be stored when there is enough water to satisfy senior rights 8 or when senior rights are not being used. At the same time, the law on storage does not require release of lawfully impounded storage water when natural flows drop below the amounts needed by downstream irrigators. The Water Court also rejected McDonald’s contention that the Schuh Court made a factual finding that “natural flows in Flint Creek equal 30 CFS every day of the irrigation season.” To the contrary, the Water Court determined that read in context, the Schuh Decree enjoined the downstream users’ demands for water beyond a greater amount of water than the amount of natural flow of the stream above the dam. Further, the water Court determined that the statement in the Decree that the flow of Flint Creek “has not exceeded and does not exceed twelve hundred (1200) miner’s inches” was only an observation that natural flows average that amount of water. The Water Court determined that the Court in Schuh was undoubtedly aware “that stream flows vary from year to year and from month to month within the same year.” In conclusion, the Water Court determined that the Schuh Decree’s instruction to release 1200 miner’s inches “at all times” was designed to ensure that whatever the Company used for hydroelectric generation was returned to the stream rather than being diverted elsewhere. “It was not a literal command to release 1200 miner’s inches every day of the irrigation season regardless of how much water was naturally available in Flint Creek.” ¶16 Accordingly, the Water Court denied McDonald’s motion for summary judgment and denied McDonald’s request to add “information remarks” to the statements of the County’s water rights. 9 ¶17 Turning to the County’s motion for summary judgment, the Water Court reiterated its construction that the Schuh Decree did not direct that the downstream irrigators receive a benefit—mandatory release of storage water—that the law does not provide. The Water Court determined that water lawfully impounded in Georgetown Lake is not “subject to a servitude in favor of downstream irrigators requiring releases to supplement the natural flows of Flint Creek.” ¶18 The Water Court concluded: The Court in Schuh did not intend to obligate the owner of Georgetown Lake to supplement the natural flows of Flint Creek with storage water. Granite County’s water rights are not subject to a condition requiring use of storage water from Georgetown Lake to maintain 30 CFS flows in Flint Creek throughout the irrigation season. The Water Court granted summary judgment to Granite County, holding that its water claims to Flint Creek “are not subject to a servitude in favor of McDonald requiring releases of storage water to supplement the natural flows of Flint Creek.” McDonald appeals. ¶19 This Court reviews the Water Court’s interpretation of a prior decree as an issue of law, to determine whether it is correct. Harland, ¶ 20; Levens v. Ballard, 2011 MT 153, ¶ 10, 361 Mont. 108, 255 P.3d 195. Judgments are to have a reasonable intendment; where a judgment is susceptible of two interpretations the one will be adopted which renders it the more reasonably effective and conclusive and which makes the judgment harmonize with the facts and law of the case. It is imperative, in view of the contradictory findings and conclusions of the court in the Smith and consolidated decrees, to ascertain the intention of the court. A decree 10 will not be construed so as to result in a positive wrong where that result can possibly be avoided. Gans & Klein v. Sanford, 91 Mont. 512, 522, 8 P.2d 808, 811 (1932) (internal citations omitted). When a decree is obscure or ambiguous the reviewing court may “refer to the record in the original case,” Harland, ¶ 23, and a decree is ambiguous “if reasonable persons differ as to its effect and meaning.” Harland, ¶ 24. ¶20 McDonald argues that the Schuh Decree was ambiguous and that the Water Court failed to properly apply the pleadings in that case while interpreting the Decree. She argues that the “entire purpose” of the action was to “determine a quantified flow” that the dam operator must release for downstream users. To the contrary, the Water Court expressly construed the Schuh Decree to require the County to release the natural inflow of Flint Creek during irrigation season, but to not require release of stored water to do so. This is entirely consistent with the pleadings that McDonald cites. ¶21 While McDonald also asserts that the Decree should be read as expressing the intent to continue the “historic” operation of the dam, this overlooks the facts that the dam was built in 1901 and the Decree was issued in 1906. So, while there was some record of the operation of the dam before the case was submitted for decision, it can hardly be relied upon as an “historic” record. The Schuh Decree was clearly issued in the context of established prior appropriation law. The Decree listed the name of each appropriator with rights from Flint Creek for irrigation purposes, along with the flow rate of each right and, by implication, the number of acres to be irrigated based upon the express water duty of one and one half miner’s inches of water per acre. This is similar 11 to many other water adjudication decrees of the early twentieth century under Montana’s law of prior appropriation. Gwyn v. City of Philipsburg, 156 Mont. 194, 478 P.2d 855 (1970) (City owned a dam that diverted the outflow of a mountain lake from Fred Burr Creek, into its municipal water system. Upon suit by downstream appropriators on Fred Burr Creek, this Court held that the City was required to release water “not to exceed” the natural flow from the lake whenever the water in the stream below was less than the amount required to satisfy downstream rights.). The Water Court therefore properly construed the prior Decree by concluding that a downstream appropriator has no rights to water stored behind an upstream dam as long as the dam operator releases the natural inflow into the stream below the dam. ¶22 The Water Court was tasked with construing and applying a decree drafted over 100 years ago and did so consistently with the applicable law. ¶23 Issue two: Did the Water Court err in deciding whether to apply claim preclusion doctrines to limit Granite County’s arguments concerning application of the Schuh Decree? ¶24 The Water Court considered McDonald’s argument that principles of claim preclusion estopped the County from contending that it was not required to release 30 CFS from Georgetown Lake continuously during the irrigation season. First, McDonald argued that res judicata barred the County from “attempting to redefine its rights” already determined in the Schuh Decree. The Water Court disagreed, noting that both parties “agree the narrow issue is interpretation of the rights already recognized in the Schuh Decree” and that “[i]nterpreting a decree is not the same as re-litigating matters already 12 decided in it.” For similar reasons, the Water Court determined that the County was not collaterally estopped by the existence of the Schuh Decree. ¶25 The Water Court considered McDonald’s argument that judicial estoppel barred the County from arguing that it was not required to make continuous releases of 30 CFS of water during the irrigation season. McDonald relied upon a statement by the County in FERC and other prior proceedings about its obligations under the Schuh Decree. The Water Court cited Watkins Trust v. Lacosta, 2004 MT 144, ¶ 33, 321 Mont. 432, 92 P.3d 620, for the principles of judicial estoppel, the purpose of which is to “suppress fraud and prevent abuse of the judicial process by deliberate shifting of positions to suit the exigencies of a particular action.” The Water Court determined that McDonald’s judicial estoppel argument failed because that doctrine “does not apply to changes of position relating to matters of law. Interpretation of the Schuh Decree involves a statement of opinion regarding a matter of law, not a statement of fact.” Finding no evidence that the County intended to commit fraud or abuse the judicial process, the Water Court found that McDonald did not demonstrate all the elements of judicial estoppel. ¶26 The Water Court dismissed McDonald’s argument that principles of claim preclusion estopped the County from contending that it was not required to release 30 CFS from Georgetown Lake continuously during the irrigation season. The Water Court concluded: Although Granite County has taken contradictory positions in other proceedings, those proceedings did not involve McDonald, and there is no evidence that Granite County meant to perpetuate a fraud or abuse the 13 judicial process. Granite County’s arguments in this case are not precluded by the doctrines of res judicata, judicial estoppel or collateral estoppel. We agree with the Water Court’s conclusion that res judicata does not bar the County’s arguments made in this case. The County is not attempting to re-litigate settled issues, but, like McDonald, is only arguing its case for how the ambiguities in the Schuh Decree should be construed. The Water Court noted that both parties “agree the narrow issue is interpretation of the rights already recognized in the Schuh Decree” and that “[i]nterpreting a decree is not the same as re-litigating matters already decided in it.” For similar reasons, we agree with the Water Court’s determination that the County was not collaterally estopped in its arguments by the existence of the Schuh Decree. ¶27 Therefore, the Water Court properly considered and applied the principles of claim preclusion relied upon by McDonald. ¶28 The Water Court’s decision is affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE 14 Justice Laurie McKinnon, specially concurring. ¶29 I agree with the Court’s conclusion that “a downstream appropriator has no rights to water stored behind an upstream dam as long as the dam operator releases the natural inflow into the stream below the dam.” Opinion, ¶ 21. I write separately, however, to address what I believe was ultimately decided in the Schuh Decree and to recognize what remains unresolved between the parties. The provisions of the Schuh Decree must be read together, along with the findings regarding natural flow. ¶30 The Schuh Decree recognized that the Company was the owner of, and entitled to, a total of 1200 miner’s inches of Flint Creek by virtue of certain appropriations made in 1888, 1889, and 1891. Schuh Decree, ¶ 2. The purpose and beneficial use of these appropriations was to generate electricity. Schuh Decree, ¶ 2. In 1901, as owner of these appropriations, the Company’s predecessor completed construction of a dam, begun in 1891, for the purpose of storing water diverted pursuant to its appropriations. Schuh Decree, ¶ 2. In 1902, the Company filed a complaint in federal district court requesting a determination of the “amounts of water which your orator shall be compelled to allow to flow from the said storage reservoir during the irrigation season . . . .” ¶31 The Schuh Decree must be evaluated within the context of the Company’s request to establish a quantity or amount of instream flow. The Schuh court found specifically that “the amount of water reasonably and necessarily required to run and operate said electric plant of the complainant to its full capacity, and which has been and now is so used by the complainant, is about 30 second feet, or 1200 miner’s inches of water.” Schuh Decree, ¶ 5. Significantly, the Schuh Decree further found that through its electric 15 power plant, the Company has permitted to flow down through the natural channel 1200 miner’s inches of water, in such a manner that none of the downstream users have been damaged. Schuh Decree, ¶¶ 7, 14. More specifically, the Schuh court determined that the Company had not – during the irrigating seasons since the construction of its dam, detained or deprived the defendants of, the ordinary and natural flow or passage of the water of said Flint Creek, that is in quantities as the same would naturally run at such times, otherwise than is necessary to the reasonable and proper operation of its electric plant and machinery. Schuh Decree, ¶ 9. The Schuh court determined the natural flow rate of Flint Creek above the dam to be 1200 miner’s inches, which the Company was entitled to divert as long as it was returned to Flint Creek, in the amount of 1200 miner’s inches, for the lands of downstream users. Schuh Decree, ¶ 4. ¶32 Importantly, the Schuh court continued to recognize entitlement by downstream water users to appropriate amounts greater than 1200 miner’s inches, many of which had senior appropriation dates to the Company. Schuh Decree, ¶ 15. As observed by the Water Court, those combined rights far exceeded 1200 miner’s inches. Therefore, the Schuh Decree determined only the amount of instream flow the Company was entitled to divert and, thereafter return, to Flint Creek. The Schuh court’s conclusion that downstream users are “enjoined and restrained” from “obstructing or interfering with the use and enjoyment of said dam and reservoir and the storing of water therein,” and that the natural flow was 1200 miner’s inches, refers to the amount of water the court previously established as the natural flow of Flint Creek, which the Company demonstrated it could use and return to Flint Creek without harm to downstream 16 appropriators. Schuh Decree, ¶ 20. Downstream appropriators were restrained from demanding “any greater amount of water than the average natural flow” be returned for downstream appropriators. Schuh Decree, ¶ 20. Therefore, I agree, based on the entirety of the Schuh Decree, that the Company is not required to release storage water in favor of downstream users to supplement natural flows of Flint Creek which are below 1200 miner’s inches. The Schuh Decree clarified instream flow which, if available, could be diverted by the Company, and returned for the lands of downstream users. ¶33 While the Schuh Decree made a specific finding that quantifies Flint Creek’s average natural flow above the dam, it did not enjoin downstream users with senior rights from appropriating amounts in excess of 1200 miner’s inches when the flow exceeded 1200 miner’s inches in Flint Creek. These downstream rights, together with those of the Company, remain subject to the doctrine of prior appropriation. The Water Court correctly recognized that the law requires operators of reservoirs to make the natural flow of a stream available to senior downstream appropriators during times of shortage. Thus, natural flow can be stored only when there is enough water to satisfy senior rights, or when senior rights are not being used. ¶34 Therefore, I would clarify and definitively reject McDonald’s argument that the Schuh Decree enjoins downstream users from appropriating no more than 1200 miner’s inches during the irrigation season. In my opinion, the Schuh Decree established a quantity of natural flow above the dam only, and it did not enjoin downstream users with senior rights from appropriating amounts in excess of 1200 miner’s inches when the flow exceeded 1200 miner’s inches in Flint Creek. It similarly did not compel the Company to 17 draw from its reservoir to supplement instream flow when those rates were below 1200 miner’s inches—the amount the Schuh Decree quantified as a finding of fact as the average instream flow. /S/ LAURIE McKINNON

November 3, 2016

b5001c31-ddac-4ac3-8348-b8fa78e768ad

Citizens for a Better Flathead v. Bd. of County Comm’rs of Flathead County

2016 MT 256

DA 15-0696

Montana

Montana Supreme Court

DA 15-0696 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 256 CITIZENS FOR A BETTER FLATHEAD, a Montana nonprofit public benefit corporation, Plaintiff and Appellant, v. BOARD OF COUNTY COMMISSIONERS OF FLATHEAD COUNTY, a political subdivision of the State of Montana and the governing body of County of Flathead, acting by and through Dale W. Lauman, Pamela J. Holmquist, and Calvin L. Scott, Defendant and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-12-1304(C) Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellant: John F. Lacey, McGarvey, Heberling, Sullivan & Lacey, PC, Kalispell, Montana For Appellee: Alan F. McCormick, Garlington, Lohn & Robinson, PLLP, Missoula, Montana Tara R. Fugina, Flathead County Attorney’s Office, Kalispell, Montana Submitted on Briefs: June 29, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 15-0696 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Citizens for a Better Flathead (Citizens) appeals the District Court’s rejection of its challenge to Flathead County’s 2012 Revised Growth Policy. Citizens asserts that both the Flathead County Planning Board (Planning Board or Board) and the County Commission (Commission) violated public rights protected by Montana’s constitution and statutes when they developed the revised policy without adequate public participation. Citizens also claims that the County failed to follow its own procedures for amending the growth policy. We agree with the District Court that the alleged irregularities do not invalidate the revised growth policy. Because the growth policy lacks the force of law, we likewise affirm the District Court’s refusal to strike from it what Citizens calls the “property rights trump card.” ¶2 We address Citizens’ claims in the following issues: 1. Whether the District Court abused its discretion in striking Citizens’ expert report. 2. Whether the District Court erred in determining that the Commission complied with the growth policy’s mandatory procedures for adopting revisions. 3. Whether the District Court erred in determining that the Commission allowed meaningful public participation in the revision process. 4. Whether the District Court erred in determining that the Commission adequately incorporated public comments into its decision-making process. 5. Whether the final clause in Part 6 of the revised growth policy survives constitutional scrutiny. 3 PROCEDURAL AND FACTUAL BACKGROUND ¶3 The Commission adopted the original Flathead County Growth Policy in March 2007. The growth policy’s terms required the Planning Board to review the policy at least every five years and to make recommendations to the Commission as to what changes to the original policy, if any, it should adopt. In anticipation of the five-year deadline, the Planning Board prepared a proposed “work plan” for the growth policy update process and forwarded it to the Commission for consideration. On January 3, 2011, the Commission adopted a resolution requesting that the Planning Board update the growth policy as proposed by the work plan. ¶4 Shortly after the Commission’s resolution, the Planning Board announced through a press release that it was commencing a revision process. Over the next year, the Planning Board held approximately twenty public workshops to solicit public comment and to discuss revisions to the growth policy. ¶5 The Planning Board presented a “first final draft” of the revised growth policy at a public hearing on February 15, 2012. Members of the public offered comments on the draft. Over the next few months, the Planning Board held four additional public workshops and continued to refine the draft policy. ¶6 The Planning Board released a “second final draft” in April 2012, and solicited comments on this draft at another public hearing in June. The Planning Board discussed these public comments at its next meeting. The Board voted to forward the policy to the Commission for approval. 4 ¶7 The Commission passed a resolution of intent to adopt the Planning Board’s proposed revised growth policy and initiated a thirty-day public comment period. After the comment period ended, the Commission held a meeting on October 12, 2012. At that meeting, it approved the revised growth policy. The October meeting, along with all of the Planning Board’s public workshops and hearings, was recorded onto DVD. The Commission did not issue written findings of fact explaining its rationale for approving the policy. ¶8 Citizens brought suit, claiming that the Commission’s adoption of the revised growth policy violated Montana statutes, the Montana Constitution, and Flathead County’s own procedures. In support of its claims, Citizens submitted an expert report of Kathleen McMahon. The District Court granted the Commission’s motion to strike McMahon’s report. Citizens and the Commission filed cross-motions for summary judgment on the question whether the revised growth policy’s adoption complied with the law. The District Court granted the Commission’s motion, reasoning that the growth policy revision process did not violate any statutory, constitutional, or regulatory provisions. Citizens appeals. STANDARDS OF REVIEW ¶9 It is within a district court’s discretion to determine whether evidence is relevant and admissible. State v. Hocevar, 2000 MT 157, ¶ 54, 300 Mont. 167, 7 P.3d 329. District courts are vested with great latitude in ruling on the admissibility of expert testimony. Hocevar, ¶ 54. Absent a showing of an abuse of discretion, we will not overturn a district court’s determinations on evidentiary matters. Hocevar, ¶ 54. 5 ¶10 We review de novo a district court’s ruling on summary judgment, applying the criteria of M. R. Civ. P. 56(c)(3). Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Pilgeram, ¶ 9. ¶11 We review a governing body’s decision to amend or revise its growth policy—a legislative act—for an abuse of discretion. North 93 Neighbors, Inc. v. Board of Cnty. Comm’rs of Flathead Cnty., 2006 MT 132, ¶ 18, 332 Mont. 327, 137 P.3d 557. ¶12 This Court’s review of constitutional questions is plenary. Williams v. Bd. of Cnty. Comm’rs, 2013 MT 243, ¶ 23, 371 Mont. 356, 308 P.3d 88. DISCUSSION ¶13 1. Whether the District Court abused its discretion in striking Citizens’ expert report. ¶14 Kathleen McMahon is a professional land-use planner. At Citizens’ request, she reviewed the audio and video recordings of the Planning Board’s and the Commission’s public meetings. She then prepared a report discussing the growth policy’s revisions and the process employed in preparing and adopting those revisions. Citizens proffered her report as evidence. ¶15 The District Court struck the report on a number of grounds, among which was that it contained legal conclusions. Citizens argues that the report is admissible because it served the primary purpose of assisting the trier of fact to understand the content of the numerous recorded public workshops and hearings. Citizens alternatively argues that, 6 even if the District Court rightly identified certain portions of the report as inadmissible, the remaining portions should have been admitted. ¶16 The McMahon report’s stated purposes include: (1) determining if the growth policy revision process “followed requirements mandated by the Montana Code Annotated (MCA) and the process for updates that is specified in the Flathead County Growth Policy”; (2) reviewing key revisions to the growth policy to determine if they are “consistent with the requirements of the MCA”; and (3) assessing whether the revision process “provided meaningful public participation in accordance with the MCA and the county’s own obligations.” The report analyzes whether the Commission’s and the Planning Board’s activities conformed to the growth policy’s guidelines for revision and complied with Montana statutory, constitutional, and case law. ¶17 Montana law permits testimony by experts “[i]f scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue.” M. R. Evid. 702. We have held, however, that “expert opinion that states a legal conclusion or applies the law to the facts is inadmissible.” Wicklund v. Sundheim, 2016 MT 62, ¶ 15, 383 Mont. 1, 367 P.3d 403 (citing Cartwright v. Scheels All Sports, Inc., 2013 MT 158, ¶ 43, 370 Mont. 369, 310 P.3d 1080). “Legal conclusions offered by an expert witness invade the province of the fact-finder, whose duty it is to apply the law as given to the facts in the case.” Wicklund, ¶ 15 (citing Perdue v. Gagnon Farms, Inc., 2003 MT 47, ¶ 28, 314 Mont. 303, 65 P.3d 570). ¶18 Rather than serving to “assist the trier of fact to understand the evidence or to determine a fact in issue,” M. R. Evid. 702, the McMahon report primarily offers legal 7 conclusions. The report’s stated purposes include determining whether the revision process met the legal requirements of Montana statutes and the procedural requirements of the County’s growth policy. The report repeatedly applies the law to the Commission’s and the Planning Board’s actions. By applying the law to the facts of this case, the report impermissibly offers legal conclusions. See Wicklund, ¶ 15. We therefore hold that the District Court did not abuse its discretion in striking this report. See Hocevar, ¶ 54. ¶19 Similarly, we are unpersuaded by Citizens’ argument that the District Court erred in excluding certain segments of the report that it argues are admissible, such as the summary tables and descriptions of the DVD recordings. These tables and descriptions mainly provided background information to support the report’s legal conclusions. The District Court reasonably determined, within its broad discretion, that these portions of the report had little relevance independent of their relation to the report’s legal conclusions. The court did not abuse its discretion in striking these segments of the report. ¶20 2. Whether the District Court erred in determining that the Commission complied with the growth policy’s mandatory procedures for adopting revisions. ¶21 The District Court held that the Planning Board and the Commission properly observed the growth policy’s revision procedures. It concluded that the Planning Board did not exceed its broad scope of review in revising the policy, that the revisions to the policy constituted “updates” rather than “amendments,” and that the requirement to prepare findings of fact did not apply to the Commission or to the Planning Board. 8 ¶22 Citizens argues that the Planning Board exceeded the scope of review defined in the original work plan and that the revisions constituted “amendments” to the growth policy rather than “updates.” The Planning Board and the Commission, Citizens maintains, failed to comply with the original growth policy’s requirements for amending the policy when they neglected to prepare written findings of fact. In the alternative, Citizens argues that even if the revisions to the policy constituted “updates,” the Planning Board and the Commission failed to meet the requirements for updating the policy by not holding meetings “throughout” Flathead County. ¶23 The original growth policy described the requirements for updating or amending the policy. Chapter 9, Part 6, under the heading, “Growth Policy Update,” provided in relevant part: At a minimum of every five years, the Planning Board shall prepare a draft revised Growth Policy . . . Goals and policies should be revised as needed to accurately reflect the present day needs of Flathead County . . . Public meetings shall be held throughout Flathead County to present revisions to the public and gather public opinion. ¶24 Chapter 9, Part 7, titled, “Growth Policy Amendments,” stated as follows: Various events could potentially create a situation where certain goals, policies and/or implementation techniques are no longer adequate or appropriate. If this occurs prior to the regularly scheduled updates, the Flathead County Growth Policy may be amended . . . Amendments shall be subject to . . . preparation of findings of fact. ¶25 Montana law requires that “a governing body ‘must be guided by and give consideration to’ its growth policy.” North 93 Neighbors, Inc., ¶ 22 (quoting § 76-1-605, MCA). We have held that a governing body “must substantially comply with an adopted growth policy.” Heffernan v. Missoula City Council, 2011 MT 91, ¶ 77, 360 Mont. 207, 9 255 P.3d 80; North 93 Neighbors, Inc., ¶ 23. Chapter 9, Part 7 of the growth policy defines amendments as changes to the policy that occur “prior to the regularly scheduled updates.” By contrast, Part 6 implies that updates are revisions to the growth policy that occur routinely—every five years at minimum. ¶26 The record shows that the revision process began with discussions of a Planning Board subcommittee in the fall of 2010, in anticipation of the April 2012 five-year deadline. The Commission’s January 3, 2011 resolution—about four years after it adopted the initial policy—called for an “update” of the growth policy. The Commission approved the Planning Board’s proposed work plan at the same time. The work plan stated a goal of “updating the Growth Policy by April 2012.” “Rather than a wholesale update” of the growth policy, the work plan stated that “it would be most effective to focus on specific areas of the growth policy in most need of updating or clarification based on public input received as well as insight gleaned from working with the [growth policy] document over the past 4 years.” The plan named three areas of “main focus” for the revision process, with two sub-topics under each. ¶27 The revised growth policy came about as part of a longstanding plan to update the growth policy every five years. Both the resolution and the work plan called for an update, and the resolution directed the Planning Board to consider “insight gleaned from working with the document over the past 4 years.” The District Court correctly determined that the revisions to the growth policy constituted an update within the meaning of Chapter 9, Part 6. 10 ¶28 Next, we agree with the District Court that the Planning Board did not exceed its scope of review as determined by the work plan. The flexible language of the work plan’s phrases, quoted above, gave the Planning Board discretion and a wide-ranging directive to revise the growth policy, rather than a rigid set of instructions. Furthermore, Chapter 9, Part 6 of the growth policy states, “Goals and policies should be revised as needed.” (Emphasis added.) Taken together, this provision and the work plan’s flexible language gave the Planning Board a broad directive to revise the policy. In expanding the revision process to include topics not specifically identified by the work plan, the revision process did not violate this directive. ¶29 Finally, the Planning Board and the Commission complied with the requirements for updating the growth policy. The policy calls for “preparation of findings of fact” only when the governing body initiates amendments pursuant to Chapter 9, Part 7 of the policy; thus, the absence of such findings here is immaterial. Rather, when a governing body revises a growth policy, it “must equip reviewing courts with a record of the facts it relied upon in making its decision to avoid judicial intrusion into matters committed to the Board’s discretion.” North 93 Neighbors, Inc., ¶ 35. Citizens challenges the Board’s processes, but it does not argue that any particular revisions are without support in the administrative record. The only requirement for updating the policy that Citizens claims the Commission and the Planning Board did not meet is the provision in Chapter 9, Part 6 that “[p]ublic meetings shall be held throughout Flathead County to present revisions to the public and gather public opinion.” (Emphasis added.) 11 ¶30 Citizens points out that the Commission and the Planning Board held meetings only in Kalispell and not in additional locations throughout the county. While true, we conclude that this failure alone does not require invalidating the revised growth policy. The record does not suggest that limiting the meetings to Kalispell negatively affected the Planning Board’s presentation of revisions to the public, or that the public was limited in its ability to comment on the proposed changes. Citizens does not demonstrate how the numerous public meetings and hearings the Board and the Commission convened should be deemed substantial non-compliance with the growth policy on the single ground that all of those meetings occurred in one part of the county. See Heffernan, ¶ 77. ¶31 In conclusion, the Planning Board and the Commission substantially complied with the County’s procedural requirements for updating the growth policy. The District Court’s holding on this issue was correct. ¶32 3. Whether the District Court erred in determining that the Commission allowed meaningful public participation in the revision process. ¶33 In response to Citizens’ public participation challenge, the District Court concluded that no statutory basis existed to invalidate the revised growth policy. In its view, the public participation statutes afforded Citizens no avenue for relief because the Planning Board was not an “agency” whose “decision” the law allowed the court to invalidate. The court therefore declined to consider further whether the Planning Board violated its public participation obligations. ¶34 Citizens asserts that the Planning Board failed to keep minutes of its meetings, failed to produce a comprehensive document highlighting in one place all the changes 12 made to the original growth policy, and failed to give adequate notice after its February 15, 2012 public hearing of what changes it was considering. These failures, in Citizens’ view, amounted to statutory violations of Montana’s open meeting laws and constitutional violations of the rights to know and participate. ¶35 The record shows that the Planning Board held over twenty public workshops at which it solicited public comment on proposed revisions to the growth policy. The Board held its first public hearing on February 15, 2012, to discuss the revised policy’s “first final draft.” The Board then held four additional public workshops between February and April to further revise the policy. On June 13, 2012, the Planning Board held a public hearing to discuss the policy’s “second final draft.” It posted the “second final draft” to the County’s website well in advance of this hearing. The Planning Board continued discussion of this second draft at a public meeting the following month. Throughout the revision process, the Planning Board gave notice of the times, dates, locations, and agendas of its public workshops and hearings. ¶36 All of the Planning Board’s public workshops and hearings were recorded onto DVD. The DVDs did not include written logs to help viewers access the contents. The Planning Board did not keep written minutes of its many public workshops, but it did keep minutes of its public hearings on February 15 and June 13, 2012, and of its public meeting in July 2012. ¶37 The Planning Board routinely posted “tracked-changes” versions of the growth policy’s individual chapters to the County’s website during the revision process. Neither 13 the Planning Board nor the Commission, however, provided the public with a single, comprehensive document identifying all of the proposed changes to the original policy. ¶38 The Commission entertained a thirty-day public comment period on the proposed revised growth policy, and then held a public meeting on October 12, 2012, to discuss the public comments received. At the beginning of the meeting, the Commissioners briefly solicited oral public comments. The Commission kept minutes of this meeting and recorded the entire meeting. At the conclusion of the public meeting, the Commission voted to approve the revised growth policy. ¶39 Article II, Section 8, of the Montana Constitution provides, “The public has the right to expect governmental agencies to afford such reasonable opportunity for citizen participation in the operation of the agencies prior to the final decision as may be provided by law.” We have held that “[t]he essential elements of public participation” required by Article II, Section 8, are “notice and an opportunity to be heard.” Bitterroot River Protective Ass’n v. Bitterroot Conservation Dist., 2008 MT 377, ¶ 21, 346 Mont. 507, 198 P.3d 219. The public’s right to participate requires more than simply an “uninformed opportunity to speak.” Bryan v. Yellowstone Cnty. Elementary Sch. Dist. No. 2, 2002 MT 264, ¶ 44, 312 Mont. 257, 60 P.3d 381. The right to know is protected by Article II, Section 9, of the Constitution, which provides, “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.” We analyze Article II, Sections 8 and 9, as coextensive provisions. Bryan, ¶ 31. 14 ¶40 The Legislature implemented these constitutional rights by enacting §§ 2-3-101 to -221, MCA. Bryan, ¶ 24. The law requires that agencies “develop procedures for permitting and encouraging” public participation and provide adequate notice of their planned actions. Section 2-3-103(1)(a), MCA. It also requires that agencies give the public a “reasonable opportunity to submit data, views, or arguments.” Section 2-3-111, MCA. Meetings of “public or governmental bodies [or] boards” must be open to the public. Section 2-3-203(1), MCA. The governmental bodies must either keep minutes of their meetings or create audio recordings accompanied by logs or time stamps. Section 2-3-212(1), (3), MCA. ¶41 Courts may void agency decisions reached in violation of these statutory provisions. Sections 2-3-114, -213, MCA. Montana law defines an agency 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.” Section 2-3-102, MCA (emphasis added). Courts may not use §§ 2-3-114 or -213, MCA, to invalidate decisions made by public bodies that are not agencies, even if those decisions violate the open meeting laws. Allen v. Lakeside Neighborhood Planning Comm., 2013 MT 237, ¶ 31, 371 Mont. 310, 308 P.3d 956. ¶42 The Planning Board does not have the authority of an agency. Its duty is to recommend that the Commission adopt, reject, or take some other action with regard to the proposed revisions to the growth policy. Section § 76-1-603, MCA. The Planning Board’s recommendations are not binding on the Commission. Allen, ¶ 28. Because the 15 Planning Board is not an agency as defined by law, the statutes do not authorize a court to invalidate its actions. Allen, ¶ 31; §§ 2-3-114 and -213, MCA. ¶43 While the Commission is an “agency” under § 2-3-102, MCA, it did not violate the open meeting laws. The Commission solicited public comment prior to and during its October 12, 2012 meeting, and it kept minutes at the meeting. The Commission provided the public with a “reasonable opportunity to submit data, views, or arguments.” Section 2-3-111, MCA. ¶44 Citizens nonetheless contends that the Planning Board and the Commission deprived Citizens of the meaningful participation guaranteed by Article II, Sections 8 and 9, of the Montana Constitution. First, the record shows that the Planning Board gave advance notice of its public workshops and hearings. The Planning Board provided agendas for its public workshops between February and April 2012. The Commission solicited public comment on its proposed adoption of the revised growth policy for a thirty-day period prior to its October 12, 2012 meeting. These actions provided adequate notice under the law to the public regarding the Planning Board’s and the Commission’s deliberations. See Bitterroot, ¶ 21; § 2-3-103(1)(a), MCA. ¶45 Second, the Planning Board and the Commission allowed for public observation of their deliberations. All of the workshops, hearings, and meetings were open to the public and recorded onto publicly available DVDs. This fulfilled the constitutional obligation of permitting public observation. See Mont. Const. art. II, § 9; § 2-3-203(1), MCA. ¶46 Third, and finally, the Planning Board and the Commission gave the public reasonable opportunities to be heard during the deliberations, and these opportunities 16 amounted to more than uninformed opportunities to speak. See Bryan, ¶ 44. The Planning Board held over twenty workshops and multiple hearings at which it solicited public comments. The Board preceded each subsequent meeting with a release of changes made since the last meeting, and it posted those changes to its website for viewing. True, the County did not maintain a comprehensive document to illustrate all changes proposed. But the Planning Board did post a full proposed revised growth policy draft to the County’s website well before the June 13, 2012 public hearing. Finally, the Board posted agendas of its workshops between its presentations of the first and second “final drafts” of the revised policy. ¶47 The Commission entertained a thirty-day public comment period prior to adopting the revised growth policy. Members of the public submitted 299 written comments in the form of emails, letters, and postcards, and a petition containing 451 signatures. We conclude that the public had ample reasonable opportunities through the workshops, the hearings, the website materials, and the comment period to be informed and to be heard by the Planning Board and the Commission. See Bitterroot, ¶ 21; Bryan, ¶ 44; § 2-3-111, MCA. ¶48 The Planning Board and the Commission met the constitutional requirements of Article II, Sections 8 and 9. They gave adequate notice of their deliberations, allowed the public to observe the meetings, and gave the public sufficient opportunities to be informed and heard. As such, neither the Commission nor the Planning Board infringed on the public’s right to participate or right to know. For these reasons, we hold that the 17 District Court did not err in determining that the Commission allowed for meaningful public participation in the revision process. ¶49 Citizens takes issue with the complexity of the process and with the difficulty for the public in keeping abreast of the specific revisions under consideration and in following the details of the Planning Board’s deliberative process. The statute commands a “reasonable opportunity” for public participation. Section 2-3-111, MCA. The court cannot dictate process to government agencies administering programs and functions within their authority. Instead, this Court’s role is limited to assessing whether the Planning Board and the Commission fulfilled the obligations imposed by the Constitution and related statutes. We conclude that they did. ¶50 4. Whether the District Court erred in determining that the Commission adequately incorporated public comments into its decision-making process. ¶51 Citizens claims that the Commission, through its own actions and those of the Planning Board, failed to consider public comments, to incorporate those comments into the decision-making process, to summarize the comments, or to explain how the comments factored into its decision, in violation of the law. The District Court disagreed, reasoning that the Planning Board and the Commission received many public comments and that the record showed that these comments had at least some influence on their decision-making processes. ¶52 At the February 15, 2012 public hearing, Flathead County residents commented on the “first final draft” of the proposed revised version of the growth policy. The Planning Board then discussed those comments. The Planning Board’s four public workshops in 18 the ensuing months included discussion of public input. The minutes of the Board’s June 2012 public hearing reflect that the Board made revisions to the growth policy in the months following the February 2012 hearing based on its consideration of the public input received and on the Board’s own discussions. ¶53 Members of the public offered additional comments on the revised growth policy’s “second final draft” at the Planning Board’s June 2012 public hearing. When the Planning Board met the next month, each member discussed his or her thoughts on the public comments received at the June hearing. ¶54 Under Montana law, the Planning Board was required to consider “the recommendations and suggestions elicited at the public hearing[s],” § 76-1-603, MCA, and to “incorporate those comments into its decision-making process,” North 93 Neighbors, Inc., ¶ 36. Here, the Planning Board’s consideration and incorporation of public comment met the law’s requirements. Board members discussed the public comments offered at the two public hearings. In the months following the February 15, 2012 hearing, the Board based its many revisions to the policy on public comments received at the workshops and on the Board’s own discussions at those workshops. This record establishes that the Planning Board considered “the recommendations and suggestions elicited at the public hearing[s]” and “incorporate[d] those comments into its decision-making process.” Section 76-1-603, MCA; North 93 Neighbors, Inc., ¶ 36. The law does not require that specific public comment be incorporated into the final decision, only into the process. 19 ¶55 The Commission also was required to consider and incorporate public comments into its process. Section 76-1-603, MCA; North 93 Neighbors, Inc., ¶ 36. In addition, by County resolution, the Commission was required to “summarize” the comments received and to “explain” how the comments influenced its decision to approve the revised policy. Flathead County Resolution No. 2129, March 18, 2008 (stating that the “scope and format of such summarization and explanation may vary as appropriate for the type of decision and extent of public comment”). This resolution provides no specific requirement as to the form of the Commission’s summary and explanation. ¶56 The Commission met on October 12, 2012, to discuss the public comments received as to the Commission’s intent to adopt the revised growth policy. At that meeting, the Commissioners briefly summarized the comments and explained how the comments factored into their decisions. Commissioner Holmquist summarized the comments for and against the revised growth policy, and explained how the comments opposing the policy factored into her decision. Commissioner Scott and Chairman Lauman addressed specific issues with the growth policy that the public comments raised, including traffic, water quality, planning and zoning, and development along highways. We conclude that these discussions fulfilled the Commission’s obligations to consider and incorporate public comments into its process, to summarize the comments, and to explain how the comments influenced its decision to adopt the revised growth policy. ¶57 Citizens argues that the Planning Board and the Commission could not possibly have considered all of the public comments from the revision process, given the volume 20 of comments received. The Planning Board members and Commissioners stated, however, that each had reviewed the public comments. It is not within this Court’s purview to determine how sincere these county officials were in their assertions that they had reviewed all public comment or to assess how the comments factored into their decisions. The scope of our review is to determine, based on the record, whether the Planning Board and the Commission “consider[ed] the public comments and incorporate[d] those comments” into their decision-making processes. North 93 Neighbors, Inc., ¶ 36. The record shows that they did. We therefore uphold the District Court’s determination on this issue. ¶58 5. Whether the final clause in Part 6 of the revised growth policy survives constitutional scrutiny. ¶59 Citizens claims that a clause in Part 6 of the revised growth policy, which it refers to as the “property rights trump card,” is unconstitutionally vague and that it violates Citizens’ Article II, Section 3, constitutional right to a clean and healthful environment. Part 6 emphasizes the predominance of individual property rights and lists requirements that a growth policy must meet if it attempts to regulate the use of private property. It concludes with the following sentence: “In the event of a conflict between the provisions in this part and any other provision in this Growth Policy and [its] amendments, this part shall control.” The District Court held that this clause did not violate the Constitution. It reasoned that the growth policy was not regulatory in nature, that the clause was not inherently vague, and that it did not encourage a violation of the constitutional right to a clean and healthful environment. 21 ¶60 Montana law provides that “a growth policy is not a regulatory document and does not confer any authority to regulate that is not otherwise specifically authorized by law or regulations adopted pursuant to the law.” Section 76-1-605(2)(a), MCA. Courts may strike down regulations as unconstitutional if they permit government action that conflicts with the Constitution. Because a growth policy “is not a regulatory document and does not confer any authority to regulate that is not otherwise specifically authorized by law,” it is incapable of authorizing a governing body to take action that would conflict with the Constitution. Section 76-1-605(2)(a), MCA. ¶61 The revised growth policy, including the final clause of Part 6, provides guidance to the local governing body. The growth policy constitutes “the preeminent planning tool” for land use planning. Heffernan, ¶ 76. But it “cannot be applied in a ‘regulatory’ fashion,” Heffernan, ¶ 78 (quoting § 76-1-605(2)(a), MCA), and thus bestows the Commission with no authority that it does not have under a statute or regulation. The clause cannot require Flathead County to take any action, much less any action that conflicts with the Constitution. We hold that, because this clause lacks the force of law, it cannot “trump” Citizens’ constitutional rights. We agree with the District Court’s conclusion that this clause is not unconstitutional. CONCLUSION ¶62 The alleged procedural shortcomings in Flathead County’s process for updating its growth policy do not rise to the level of either a statutory or a constitutional violation. The County’s process was adequate to meet its obligations under the law. We affirm the 22 District Court’s order and its decision to award summary judgment to the Commission on the validity of the County’s 2012 revised growth policy. /S/ BETH BAKER We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE

October 11, 2016

89a09da5-61a2-4e5d-91a9-d07f0d5256a4

In re Marriage of Brown

2016 MT 299

DA 16-0085

Montana

Montana Supreme Court

DA 16-0085 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 299 IN RE THE MARRIAGE OF: EMILY A. BROWN, Petitioner and Appellee, v. JOHN O. BROWN, Respondent and Appellant. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Hill, Cause No. DR 11-019 Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellant: Jason T. Holden, Katie R. Ranta, Faure Holden Attorneys at Law, P.C., Great Falls, Montana For Appellee: Amy O. Duerk, Simon Law Office, Missoula, Montana Submitted on Briefs: September 21, 2016 Decided: November 22, 2016 Filed: __________________________________________ Clerk 11/22/2016 Case Number: DA 16-0085 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 John Brown appeals from an order of the Montana Twelfth Judicial District Court, Hill County, denying his motions to modify the parenting plan and child support agreement he entered with his former wife, Emily. Although Emily does not cross- appeal, she requests an award of fees associated with the appeal. We affirm the District Court’s denial of John’s motions and deny Emily’s request for fees. ISSUES ¶2 We address the following issues on appeal: 1. Did the District Court err in denying John’s motions to modify child support and amend the parenting plan without a hearing? 2. Is Emily entitled to attorney’s fees associated with the appeal? BACKGROUND ¶3 The District Court entered a decree dissolving the marriage of John and Emily Brown in November 2012. The decree incorporated by reference a separation agreement signed by the parties that provided a parenting plan and child support for their daughter, the sole child of their marriage. The agreement obligated John to pay $1000 per month in child support through the end of 2012 and $750 per month thereafter. The agreement also provided that each party had “the right to modify child support payments every two years.” ¶4 The parenting plan designated Emily as the primary parent. John and Emily agreed their daughter would live with Emily and attend school in Missoula during the school year. John was entitled to spend one weekend each month of the school year with 3 their daughter in Missoula, and for the majority of the summer, their daughter would live with John in Havre. The parenting plan further provided that “[a] motion to amend this plan to change the school location or schedule . . . prior to September, 2013, is vexatious and not in the best interests of the child.” ¶5 On February 3, 2014, John filed a motion to modify his child support obligation, citing § 40-4-208, MCA. In his motion, John claimed his “income and financial circumstances have changed significantly.” John explained that “[h]e does not earn the income he once did and he can no longer afford the $750.00 per month payment.” The motion did not elaborate on why or to what extent his income had fallen. John asked for a hearing on his motion and a scheduling order to exchange financial information with Emily. ¶6 On February 18, 2014, Emily filed a brief opposing John’s motion. Emily argued John’s motion was premature under the terms of their agreement and that John had failed to raise sufficient facts to show the substantial and continuing change in circumstances required by § 40-4-208, MCA. After receiving several time extensions, John filed a memorandum and affidavit supporting his motion on March 12, 2014, in which he asserted that § 40-4-208, MCA, allowed the court to modify his child support obligation upon a showing of changed circumstances. According to the memo, John “believes he has shown such a circumstance and will show such a circumstance.” John explained that his declining income was out of his control and noted that the price of gas was at “historic lows.” John again requested a hearing and a scheduling order. 4 ¶7 On April 24, 2015, John filed a motion to amend the parenting plan. In his affidavit supporting the motion, John asked the District Court to review the plan because his contact with his daughter “is essentially a non-school year schedule” and “is not substantial and continuing.” John did not claim Emily had breached the parenting plan, but he expressed his belief that it was in his daughter’s best interest to spend every other weekend with him during the school year. John again requested a hearing. Emily opposed the motion, arguing again that John had failed to show a substantial change in circumstances. ¶8 A discovery dispute ensued when Emily sought to compel John to produce financial records. This dispute further delayed a hearing on John’s motions. On August 10, 2015, the parties stipulated to a scheduling order that set September 24 as the date for a hearing on the outstanding motions. Emily filed a status report on September 17 in which she relayed information obtained in discovery about several instances of high- value transactions in John’s personal checking account. Premised upon these facts, Emily argued John’s financial condition had not changed for the worse and asked the District Court to deny the pending motions and vacate the hearing. Based on Emily’s status report, the District Court vacated the hearing but did not rule on the motions. Instead, the District Court gave John until November 16, 2015, to respond to Emily’s status report. ¶9 John’s response to the status report again asserted that it would be in his daughter’s best interest to spend more time with him. Regarding the modification to his child support obligation, John claimed that he was “entitled to a reduction as the parties 5 agreed to adjust child support in two (2) years and [Emily] is making more money today and [John] is making less money today.” As before, John did not provide any explanation of how or why his income had fallen, beyond the vague statement that his “income has declined because of the continued historic lows of natural gas prices.” ¶10 On December 15, 2015, the District Court conducted a case management conference with the parties via telephone. Following that conference, the District Court issued the order denying John’s motions that serves as the basis for this appeal. In the order, the District Court stated that “the parties [sic] counsel agreed that no hearing was needed on the pending motions,” although John maintains that neither he nor his counsel withdrew his multiple requests for a hearing. On the basis of the motions, briefs, and affidavits discussed above, the District Court concluded that John had not shown a substantial change in circumstances or provided a basis for modifying his child support obligations. Accordingly, the District Court denied John’s motions. John timely appeals. STANDARD OF REVIEW ¶11 We review a district court’s ruling on a motion for modification of child support for an abuse of discretion. In re Marriage of Pearson, 1998 MT 236, ¶ 29, 291 Mont. 101, 965 P.2d 268. We also apply the abuse of discretion standard to a district court’s decision not to hold an evidentiary hearing. Harrington v. Energy W. Inc., 2015 MT 233, ¶ 11, 380 Mont. 298, 356 P.3d 441. A court abuses its discretion if it acts arbitrarily without conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice. Pearson, ¶ 30. 6 DISCUSSION ¶12 1. Did the District Court err in denying John’s motions to modify child support and amend the parenting plan without a hearing? ¶13 At the outset, we note that the terms of a separation agreement are generally binding upon the court, except for provisions relating to “support, parenting, and parental contact with children.” Section 40-4-201(2), MCA. As such, John’s contention that the separation agreement grants him the right to modify child support and the parenting plan is not persuasive—the relevant statutes in Title 40, chapter 4, MCA, must be satisfied to modify child support or a parenting plan. Indeed, John seems to acknowledge this by citing § 40-4-208, MCA, in his original motion to modify child support. ¶14 It is also important to distinguish between a motion to modify child support and a motion to modify a parenting plan. Both are at issue in this case and both ultimately require a showing of changed circumstances, but Montana statutes provide different standards for evaluating the necessity of the two types of modification. We therefore address the two motions in turn. A. Child Support Modification ¶15 Child support provisions in a dissolution decree may be amended only under certain, specific conditions. See § 40-4-208(2)(b), MCA. One of these conditions requires “a showing of changed circumstances so substantial and continuing as to make the terms unconscionable.” Section 40-4-208(2)(b)(i), MCA. Unconscionability determinations are made on a case-by-case basis at the discretion of the district court. Pearson, ¶ 30. 7 ¶16 In his motion to modify his child support obligation, John claimed his income and financial circumstances had changed significantly. More than a month later, John filed a supporting affidavit that echoed this conclusory refrain and generally blamed the price of natural gas for his alleged earnings decline. John did not explain how the drop in the price of gas affected his income or the extent to which his income had declined since the decree of dissolution. From this nebulous claim of changed circumstances, John maintains that he is entitled to an evidentiary hearing. ¶17 John cites Harrington for the proposition that a district court should hold an evidentiary hearing (1) if there are disputed issues of material fact and (2) if the court must weigh the credibility of witnesses. See Harrington, ¶ 11. While these considerations would generally counsel in favor of a hearing, we note that John has not actually mustered a dispute of material fact. Nearly two years had passed between the filing of the motion to modify child support and the District Court’s denial of the motion. During this time, John merely made conclusory statements about the need for a child support modification but did not make a showing of changed circumstances arguably demonstrating that the existing support order was unconscionable. We are not inclined to compel the District Court to hold a hearing to find the facts that John has repeatedly failed to assert. Consequently, we cannot fault the District Court for refusing John’s requests for an evidentiary hearing, nor can we fault the District Court’s ultimate conclusion that John failed to show a substantial and continuous change in circumstances that made his child support obligation unconscionable. 8 B. Parenting Plan Modification ¶18 Montana’s laws governing parenting plans seek to “preserve stability and continuity of custody for the children.” In re Marriage of Johnson, 266 Mont. 158, 166, 879 P.2d 689, 694 (1994) (internal quotation marks omitted). A district court may amend a parenting plan if it finds, upon the basis of facts that have arisen since the prior plan or that were unknown to the court at the time of entry of the prior plan, that a change has occurred in the circumstances of the child and that the amendment is necessary to serve the best interest of the child. Section 40-4-219(1), MCA. ¶19 A parent who seeks to amend a parenting plan must “submit, together with the moving papers, an affidavit setting forth facts supporting the requested plan or amendment.” Section 40-4-220(1), MCA. It is not enough to simply file the motion without specifying how the parenting plan should be amended; the requested amendment must be included with the moving papers. Section 40-4-219(7), MCA. Taken together, these statutes impose a burden on the parent seeking an amendment to show, through affidavits submitted with the motion to amend, facts that were unknown to the court when the parenting plan was adopted or that have since arisen and that necessitate amendment of the parenting plan. ¶20 The District Court’s order did not cite these statutes, but summarized the law by noting that “[p]arenting plans can only be modified on a substantial change in circumstances.” John does not dispute this interpretation of the statute, nor does he allege Emily has in any way breached their parenting plan. Instead, John argues that the 9 settlement agreement specifically allowed modification of the parenting plan after two years had passed. ¶21 John relies on the following language from the agreement: “A motion to amend this plan to change the school location or schedule . . . prior to September, 2013, is vexatious and not in the best interests of the child.” This language simply provides that any attempt to amend the parenting plan before the stated month is not in the child’s best interests. It does not grant either party a right to freely amend the plan after September 2013. Moreover, any amendment to the parenting plan must comply with the applicable statutes. See § 40-4-201(2), MCA. In other words, John, as the movant, was required to submit a specific, proposed amendment to the parenting plan and an affidavit informing the District Court of the new facts that necessitated the amendment. See §§ 40-4-219(7) and -220(1), MCA. ¶22 John did not supply a specific, proposed amendment with his motion. He did file an affidavit, in which he argues that the parenting schedule during the school year deprives him of substantial and continuing contact with his child. As the District Court observed, however, “[t]he fact that the child is now in school and school attendance interferes with visitation was anticipated by the prior parenting plan, and was to be expected in the ordinary course of life.” Thus, the District Court concluded John failed to show the requisite “substantial change in circumstances.” The District Court was not obliged to hold an evidentiary hearing to give John an opportunity to cure his failure to raise facts pursuant to § 40-4-220(1), MCA, or submit a proposed amendment in compliance with § 40-4-219(7), MCA. We therefore conclude the District Court did not 10 abuse its discretion in denying John’s motion to amend the parenting plan without first holding an evidentiary hearing. ¶23 2. Is Emily entitled to attorney’s fees associated with the appeal? ¶24 On appeal, Emily asks this Court to award her attorney’s fees incurred during the appeal, relying on Cadena v. Fries, 2015 MT 90, 378 Mont. 409, 346 P.3d 347, and M. R. App. P. 19(5). In Cadena, the parties’ separation agreement provided for an award of attorney’s fees to the prevailing party. Cadena, ¶ 22. John and Emily’s separation agreement contains no such provision, so Cadena is inapposite. We will award attorney’s fees under M. R. App. P. 19(5) if the appellant’s claims for relief are “frivolous, vexatious, filed for purposes of harassment or delay, or taken without substantial or reasonable grounds.” Although John’s claims lack merit, we cannot conclude they are frivolous or lacking in good faith. See In re Marriage of Parker, 2013 MT 194, ¶ 54, 371 Mont. 74, 305 P.3d 816. ¶25 Alternatively, Emily asks this Court to sanction John for filing vexatious motions that constitute harassment, pursuant to § 40-4-219(5), MCA. Emily did not raise this argument at the District Court, however, and we will not consider it for the first time on appeal. See JAS, Inc. v. Eisele, 2016 MT 33, ¶ 26, 382 Mont. 200, 367 P.3d 330. CONCLUSION ¶26 We affirm the order of the District Court and decline to award attorney’s fees related to the appeal. /S/ PATRICIA COTTER 11 We Concur: /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE /S/ MICHAEL E WHEAT

November 22, 2016

f8c6954c-142e-451c-ae11-1aef8f15d2dc

W. Larson Jr. v. State

2016 MT 259N

DA 15-0790

Montana

Montana Supreme Court

DA 15-0790 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 259N WALTER M. LARSON, JR. Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Seventh Judicial District, In and For the County of Dawson, Cause No. DV 15-078 Honorable Richard A. Simonton, Presiding Judge COUNSEL OF RECORD: For Appellant: Walter M. Larson, Jr., Self-Represented, Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Brant S. Light, Assistant Attorneys General, Helena, Montana Olivia Norlin-Rieger, Dawson County Attorney, Glendive, Montana Submitted on Briefs: August 17, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 15-0790 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by unpublished opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Walter M. Larson, Jr., appearing pro se, appeals from a December 2015 order of the Seventh Judicial District Court, Dawson County, denying his Petition for Post-Conviction Relief. We affirm. ¶3 In 2013, Larson was convicted of deliberate homicide and tampering with evidence. He appealed and we affirmed his convictions.1 In October 2015, Larson filed a petition for post-conviction relief alleging he had received ineffective assistance of counsel during his original trial, supported by an affidavit from him restating the allegations contained in the petition. The District Court found that the petition, files, and records of the case conclusively established that the petitioner was not entitled to relief, and therefore dismissed the petition for failure to state a claim for relief in accordance with § 46-21-201(1)(a), MCA. On appeal, Larson argues the District Court erred by failing to hold an evidentiary hearing prior to dismissing his petition for post-conviction relief, and by failing to appoint counsel to assist him during the post-conviction proceeding. 1 State v. Larson, 2015 MT 271, ¶¶ 1, 42, 381 Mont. 94, 356 P.3d 488. 3 ¶4 “We review a district court’s denial of a petition for post-conviction relief to determine whether the court’s findings of fact are clearly erroneous and whether its conclusions of law are correct.” Beach v. State, 2009 MT 398, ¶ 14, 353 Mont. 411, 220 P.3d 667. “We review discretionary rulings in post-conviction relief proceedings, including rulings related to whether to hold an evidentiary hearing, for an abuse of discretion.” Beach, ¶ 14. ¶5 A district court may “dismiss a PCR petition without ordering a response if the petition and records conclusively show that the petitioner is not entitled to relief.” Marble v. State, 2015 MT 242, ¶ 38, 380 Mont. 366, 355 P.3d 742 (internal quotations omitted). Further, a court may “dismiss a petition without holding a hearing if the petition fails to satisfy the procedural threshold set forth in § 46-21-104(1)(c), MCA.” Marble, ¶ 38. A post-conviction petition must “identify all facts supporting the grounds for relief set forth in the petition and have attached affidavits, records, or other evidence establishing the existence of those facts.” Section 46-21-104(1)(c), MCA. “Mere conclusory allegations are insufficient to support the petition.” Beach, ¶ 16. This Court has consistently held that while a certain amount of latitude may be given to pro se litigants, it is nonetheless reasonable to expect such litigants to adhere to procedural rules. Greenup v. Russell, 2000 MT 154, ¶ 15, 300 Mont. 136, 3 P.3d 124. ¶6 After reviewing the petition, affidavits, and record in this case, we determine that the District Court did not abuse its discretion in refusing to hold an evidentiary hearing and dismissing the petition for failure to state a claim upon which relief may be granted. 4 ¶7 As noted, Petitioner argues that the District Court erred in not appointing counsel to assist him in the post-conviction proceeding. The right to counsel expires following the conclusion of a direct appeal. Section 46-8-103(1), MCA. A district court’s assignment of counsel after the conclusion of a direct appeal is discretionary and governed by § 46-8-104, MCA. Further, § 46-21-201(2), MCA, dealing with proceedings on a post-conviction petition, provides that If the death sentence has not been imposed and a hearing is required or if the interests of justice require, the court shall order the office of state public defender, provided for in 47-1-201, to assign counsel for a petitioner who qualifies for the assignment of counsel under Title 46, chapter 8, part 1, and the Montana Public Defender Act, Title 47, chapter 1. Because the District Court determined that a hearing was not required and that the petition failed to state a claim upon which relief could be granted, the District Court was not required to appoint counsel to assist the Petitioner. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. In the opinion of this Court, this case presents a question controlled by settled law. ¶9 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 11, 2016

3112d893-e692-4232-9658-9f10527cd466

State v. Krebs

2016 MT 288

DA 15-0287

Montana

Montana Supreme Court

DA 15-0287 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 288 STATE OF MONTANA, Plaintiff and Appellee, v. MARTE ALBERT KREBS, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 14-442 Honorable Michael G. Moses, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Moses Okeyo, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Melissa Schlichting, Assistant Attorney General, Helena, Montana Scott D. Twito, Brett D. Linneweber, Deputy County Attorney, Billings, Montana Submitted on Briefs: October 5, 2016 Decided: November 15 2016 Filed: __________________________________________ Clerk 11/15/2016 Case Number: DA 15-0287 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Marte Krebs and the State contest whether one of Krebs’s prior convictions is a “qualifying conviction” that allowed the State to charge him with a felony for his most recent driving under the influence (DUI) violation. Krebs challenged the prior conviction’s applicability, arguing that the State failed to meet its burden of showing that the prior conviction could be used to enhance the penalty for his conviction to a felony. The District Court disagreed and imposed a felony sentence. ¶2 We reverse because the State had the burden of demonstrating the existence of qualifying convictions for purposes of enhancing Krebs’s penalty to a felony DUI and did not meet it. PROCEDURAL AND FACTUAL BACKGROUND ¶3 The State charged Krebs with felony DUI in June 2014. The probable cause affidavit alleged that Krebs had three prior DUI convictions—two from North Dakota in 1988 and 2006, and one from Montana in 1991. Krebs filed a motion challenging the 1988 North Dakota conviction’s applicability, arguing that the 1988 conviction should not qualify as a conviction sufficient to enhance the penalty for his 2014 charge to a felony. ¶4 Krebs contended that the State bore the burden to prove that the 1988 conviction was a qualifying conviction. Krebs maintained that it was impossible to determine whether the 1988 conviction was a “blood alcohol concentration” (BAC) conviction or an “under the influence” conviction because, under North Dakota’s statutory framework, the 3 same statute governed both offenses. In contrast, there are distinct Montana statutes that govern BAC convictions and “under the influence” convictions. Krebs asserted that it was the State’s burden to prove whether the 1988 conviction was an “under the influence” conviction or a BAC conviction. If the 1988 conviction was a BAC conviction, Krebs asserted that it would have been expunged under Montana law. Alternatively, if it were an “under the influence” conviction, Krebs contended that it could not count as a qualifying conviction pursuant to § 61-8-734, MCA, because it was not a substantially similar offense given the differences between North Dakota’s and Montana’s definitions of “under the influence.” ¶5 The State countered that Krebs bore the burden to prove whether the 1988 conviction was an “under the influence” or a BAC conviction. Prior to hearing Krebs’s motion, the District Court requested supplemental information regarding the nature of the 1988 conviction. Both parties agreed that the register of actions from the North Dakota court was the only documentation available, as the court file had been destroyed. The register showed only that Krebs had been convicted of DUI; it did not indicate whether the 1988 conviction was an “under the influence” or a BAC conviction. ¶6 The District Court denied Krebs’s motion following a hearing. The court concluded that it was Krebs’s burden to prove the nature of the 1988 conviction. Because Krebs failed to show that the 1988 conviction was expunged from his record, the District Court concluded that the 1988 conviction could be used to support the felony charge. Krebs pleaded guilty to the felony, reserving his right to appeal the denial of his motion. 4 STANDARD OF REVIEW ¶7 Whether a prior conviction may be used to enhance a criminal sentence is a question of law that we review for correctness. State v. Burns, 2011 MT 167, ¶ 17, 361 Mont. 191, 256 P.3d 944; State v. Maine, 2011 MT 90, ¶ 12, 360 Mont. 182, 255 P.3d 64. DISCUSSION ¶8 Whether the State is required to prove the existence of a qualifying conviction in order to treat an alleged fourth DUI offense as a felony. ¶9 The District Court treated Krebs’s motion as a motion to dismiss. The court acknowledged that “[t]he record is inadequate to provide the Court with sufficient information as to whether [Krebs’s 1988 conviction] was a BAC conviction or an ‘under the influence’ conviction.” In addition, the court agreed with Krebs that if his 1988 conviction was a BAC conviction, it would have been expunged from his record and therefore it would not count for sentence enhancement purposes. The court concluded, however, that the burden was on Krebs to provide the court “with sufficient information supporting any argument that his 1988 DUI conviction was a BAC conviction.” In doing so, the court relied on the procedural framework we established in Maine to evaluate collateral challenges to prior convictions. Because Krebs failed to meet the burden imposed by Maine, the District Court concluded that the 1988 conviction was valid for enhancing his 2014 charge to felony DUI. ¶10 On appeal, the State agrees that if the 1988 conviction had been a BAC conviction, it would not qualify as a conviction for purposes of enhancing the new DUI to felony status. Relying exclusively on Maine, the State contends that it was Krebs’s “burden to 5 produce direct evidence that the prior conviction is invalid.” (Quoting Maine, ¶ 12). The State contends further that it provided sufficient evidence of Krebs’s 1988 conviction by introducing the North Dakota court’s register of actions. Because Krebs was the moving party, and he “only disputed the type of DUI conviction,” the State argues that the “burden of proof clearly” remained with him. ¶11 The District Court’s and the State’s reliance on Maine is misplaced. In Maine, the defendant argued that a prior DUI conviction used to enhance his conviction to felony DUI was “constitutionally infirm” and was therefore invalid. Maine, ¶ 35. Our purpose in Maine was “to clarify the procedure on these sorts of collateral attacks on prior convictions.” Maine, ¶ 17 (emphasis added). We grounded our analysis in the well-established principle that a constitutionally infirm conviction may not be used to support an enhanced punishment. Maine, ¶¶ 28, 33. We recognized also that the State has an interest “in deterring habitual offenders” and “in the finality of convictions.” Maine, ¶ 29. ¶12 Balancing these interests, we concluded that “a rebuttable presumption of regularity attaches to [a] prior conviction, and we presume that the convicting court complied with the law in all respects.” Maine, ¶ 33. We held therefore that when a defendant collaterally attacks the validity of a prior conviction on the ground that the conviction is constitutionally infirm, the defendant bears the “initial burden to demonstrate that the prior conviction is constitutionally infirm.” Maine, ¶ 33. In other words, under Maine, it is the defendant “who must prove by a preponderance of the evidence that the conviction is invalid.” Maine, ¶ 34 (emphasis in original). Imposing 6 the burden of proving the prior conviction’s constitutional infirmity on the defendant does not violate due process “once [the] state proves the fact of a prior conviction.” State v. Okland, 283 Mont. 10, 17, 941 P.2d 431, 435 (1997) (citing Parke v. Raley, 506 U.S. 20, 29, 113 S. Ct. 517, 523 (1992)) (emphasis added). We have applied the Maine framework consistently in cases where a defendant attempts this type of collateral attack on a prior DUI conviction. E.g., State v. Hancock, 2016 MT 21, 382 Mont. 141, 364 P.3d 1258; State v. Johnson, 2015 MT 221, 380 Mont. 198, 356 P.3d 438; State v. Nixon, 2012 MT 316, 367 Mont. 495, 291 P.3d 1154. ¶13 But here, Krebs admits that he was validly convicted in 1988. He is not questioning whether the North Dakota court complied with the law or violated his constitutional rights. Rather, he is asserting that the State had the burden of proving the fact that the 1988 conviction qualified as a predicate for the felony charge in this case. ¶14 Montana’s statutory framework establishes separate offenses for driving under the influence and for driving with excessive blood alcohol concentration. Sections 61-8-401, -406, MCA. After three qualifying convictions, a defendant convicted of a fourth or subsequent offense is guilty of a felony and subject to an enhanced penalty. Section 61-8-731(1), MCA. Under current law, “all previous convictions,” whether “under the influence” or BAC, “must be used for sentencing purposes” no matter when they occurred. Section 61-8-734(1)(b)-(c), MCA. ¶15 Under the law in effect at the time of Krebs’s 1988 conviction, however, a person’s prior BAC conviction would be “expunged from the defendant’s record” if he or she did not receive another BAC conviction within five years. State v. Sidmore, 7 286 Mont. 218, 227, 951 P.2d 558, 564 (1997) (quoting § 61-8-722(6), MCA (1989)). This remained true even if the person received an “under the influence” conviction within five years of receiving a BAC conviction. Sidmore, 286 Mont. at 227, 951 P.2d at 564. Thus, a BAC conviction that was not followed by another BAC conviction within that five-year period could not “be counted to support [a] charge of felony DUI.” Sidmore, 286 Mont. at 227, 951 P.2d at 564; accord State v. Beckman, 284 Mont. 459, 466, 944 P.2d 756, 761 (1997); State v. Cooney, 284 Mont. 500, 508, 945 P.2d 891, 895 (1997); State v. Brander, 280 Mont. 148, 155, 930 P.2d 31, 36 (1996). ¶16 The parties do not dispute that if Krebs’s 1988 conviction was a BAC conviction, it could not have been used to support a felony charge under § 61-8-731, MCA, because he did not receive another BAC conviction in the subsequent five years. The parties do dispute, however, who bears the burden of proving whether a prior conviction qualifies as a “conviction” that may be used to support felony enhancement. ¶17 As noted, in order to be sentenced for felony DUI, a person must have four or more qualifying convictions. Section 61-8-731, MCA; Sidmore, 286 Mont. at 227, 951 P.2d at 564. Analogous are the statutes governing persistent felony offenders, which require that an offender have two or more qualifying felony convictions. Section 46-18-501, MCA. In both instances, prior convictions are considered at sentencing. State v. Nelson, 178 Mont. 280, 284, 583 P.2d 435, 437 (1978) (concluding that the State had to present evidence of prior DUI convictions at sentencing, not at a defendant’s trial for third DUI); § 46-18-502, MCA (“Sentencing of persistent felony offender”). We have analogized sentencing procedures for multiple DUI convictions to the sentencing 8 procedures for repeat felony offenders in the past. Nelson, 178 Mont. at 284, 583 P.2d at 437. ¶18 In the persistent felony offender context, we have concluded that “in order to present evidence of a prior conviction in a sentencing proceeding there must be competent proof that the defendant in fact suffered the prior conviction.” State v. Lamere, 202 Mont. 313, 321, 658 P.2d 376, 380 (1983) (citing State v. Cooper, 158 Mont. 102, 489 P.2d 99 (1971)) (emphasis in original); accord State v. Farnsworth, 240 Mont. 328, 334, 783 P.2d 1365, 1369 (1989) (concluding that the “District Court relied on competent evidence . . . to establish the requirements of the persistent felony offender statute”); State v. Smith, 232 Mont. 156, 160, 755 P.2d 569, 571-72 (1988) (agreeing that “because the Court relied on competent evidence in sentencing [the defendant],” the court properly sentenced the defendant as a persistent felony offender). Requiring competent proof of a prior conviction “has nothing to do with the validity of the conviction.” Cooper, 158 Mont. at 109, 489 P.2d at 103. ¶19 As demonstrated above, Krebs is not challenging the 1988 conviction’s validity; he is challenging whether the 1988 conviction may be used to enhance his penalty to felony status. It is the State’s burden to “prove[ ] the fact of a prior conviction.” See Okland, 283 Mont. at 17, 941 P.2d at 435. And the State must do so by presenting “competent proof that the defendant in fact suffered the prior conviction.” Lamere, 202 Mont. at 321, 658 P.2d at 380. The District Court acknowledged that “[t]he record is inadequate to provide the Court with sufficient information as to whether [Krebs’s 1988 conviction] was a BAC conviction or an ‘under the influence’ conviction.” An 9 “inadequate record” cannot be competent proof that Krebs in fact suffered a prior conviction that would qualify to enhance his penalty to a felony. ¶20 We conclude that the State bore the burden to prove that the 1988 conviction could be used to support its felony charge against Krebs and that the State failed to meet this burden. Accordingly, we reverse the District Court’s order. ¶21 Because our resolution of this issue is dispositive, we need not address whether North Dakota’s and Montana’s definitions of “under the influence” are substantially similar. CONCLUSION ¶22 We reverse and remand to the District Court for further proceedings consistent with this Opinion. /S/ BETH BAKER We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

November 15, 2016

c6817669-b3a5-4e5f-bf12-cc3d23cab5f0

Diaz v. State

2016 MT 270

DA 16-0023

Montana

Montana Supreme Court

DA 16-0023 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 270 JEANETTE DIAZ, LEAH HOFFMANN-BERNHARDT, Individually and on Behalf of Others Similarly Situated, Plaintiffs and Appellants, v. STATE OF MONTANA, Defendant and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2008-596 Honorable DeeAnn Cooney, Presiding Judge COUNSEL OF RECORD: For Appellants: Erik B. Thueson, Thueson Law Office, Helena, Montana James G. Hunt, Jonathan McDonald, Hunt Law Firm, Helena, Montana For Appellee: Robert Lukes, Garlington, Lohn & Robinson, PLLP, Missoula, Montana Submitted on Briefs: July 27, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 16-0023 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Jeanette Diaz, Leah Hoffmann-Bernhardt, and others similarly situated, collectively (Diaz), appeal from an order entered in the First Judicial District Court determining the manner in which prejudgment interest on payments due to class members was to be calculated. The underlying payments arose from the Defendant’s application of its policy’s Coordination of Benefits Provision to avoid payment of medical expenses already paid by a third-party liability carrier without Defendant first undertaking a made whole analysis. The District Court found that, except for claims “arising after December 24, 2009,” interest for all such payments is to commence 30 days following our decision in Blue Cross & Blue Shield of Mont. v. Mont. State Auditor, 2009 MT 318, 352 Mont. 423, 218 P.3d 475 (BCBS). For claims arising after December 24, 2009, the District Court required that the State pay interest commencing on the day the underlying medical expenses were incurred. We affirm the District Court order, but remand for correction of the date to be applied for determining the calculation of prejudgment interest.1 ¶2 Diaz presents the following issue for review: Whether the District Court correctly determined the date upon which interest should first accrue on claims for members of the State of Montana Health Benefit Plan. 1 The District Court’s ORDER ON INTEREST TO BE PAID incorrectly calculates 30 days following BCBS to be December 24, 2009. While both parties agree that December 24, 2009, was an incorrect date to commence interest calculations, they disagree on what date is actually 30 days after BCBS. The State maintains 30 days after BCBS is November 24, 2009, while Diaz maintains 30 days after our BCBS decision is October 24, 2009. For reasons that follow, we conclude interest is to commence on November 14, 2009, for all claims filed prior to November 14, 2009. 3 FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case has been appealed on three previous occasions on various questions. The underlying claim in these proceedings concerns an exclusion in the State’s health benefit insurance plan which allowed the State to coordinate benefits in violation of Montana’s made whole laws. The State offers a State Employee Health Benefits Plan (Plan) paid to its employees, retired employees, and dependents of both. The Plan enrolls approximately 32,000 members and provides for coverage of health care costs to health care providers. Significantly, it does not provide for any payments to be made directly to a Plan member. ¶4 The Plan had a coordination of benefits provision, in conjunction with payments from third parties, which excludes: 5. Expenses that a member is entitled to have covered, or that are paid under an automobile insurance policy, a premise liability policy, or other liability insurance policy. This includes but is not limited to, a homeowner’s policy or business liability policy, or expenses that a member would be entitled to have covered under such policies if not covered by the State Plan. Both Diaz and Hoffmann-Bernhardt’s original medical bills were paid timely and in full by third-party insurers and the State. Diaz filed suit alleging that defendants, third-party administrators and the State, had violated the employees’ made whole rights under Montana law. ¶5 Our first consideration of coordination of benefits language, such as here, was in 2009 when we decided BCBS. In BCBS, coordination of benefits language in a Blue Cross & Blue Shield policy excluded coverage for any health care costs incurred by its 4 insured if they received or were entitled to receive payment for those costs from a third-party’s automobile or premises liability policy. The issue in BCBS was whether the coordination of benefits provision violated the made whole requirement in § 33-30-1102, MCA. We held that the legal effect of the coordination provision was to allow Blue Cross & Blue Shield to exercise subrogation before paying anything to its insured. BCBS was the first time this Court examined a coordination of benefits provision in the context of our made whole laws and determined that its utilization violated the made whole requirement of § 33-30-1102, MCA. BCBS, ¶ 19. ¶6 The Diaz trilogy is premised upon our decision in BCBS. The first appeal dealt with Rule 23 class certification. We concluded that the District Court had properly certified a class which addressed issues of the Plan’s coordination of benefits language. Diaz v. Blue Cross & Blue Shield, 2011 MT 322, ¶ 50, 267 P.3d 756 (Diaz I). The second appeal addressed the definition of the class by the court which included those claims with an “eight-year statute of limitations suggested by the Plaintiffs, but also adopting the one-year filing limitation proposed by the State . . . .” Diaz, ¶ 14. We affirmed the court’s class definition, observing that class action orders “are not frozen once made” and that a “District Court maintains discretion to alter the class definition as the case proceeds.” Diaz v. State, 2013 MT 219, ¶ 28, 308 P.3d 38 (Diaz II). The third appeal affirmed the district court’s award of summary judgment finding the policy’s coordination of benefits provision to be de facto subrogation and that the State, which operates as an insurer, is subject to the Insurance Code and Montana’s made whole laws. Diaz v. State, 2013 MT 331, ¶¶ 14-16, 313 P.3d 124 (Diaz III). 5 ¶7 In the current appeal, which is the fourth, Diaz asks us to determine when interest should begin to accrue on the class members’ claims. Some of the claims, given the court’s broad class definition which we affirmed in Diaz II, predate our decision in BCBS, while other claims arose following our decision in BCBS. The District Court addressed both categories of claims and ordered that for pre-BCBS claims, interest commences 30 days following the date of our BCBS decision. For all claims arising subsequent to BCBS, the District Court required the State to pay interest commencing on the day the underlying medical expense was incurred. STANDARD OF REVIEW ¶8 “We review a district court’s grant or denial of prejudgment interest to determine if the district court’s interpretation of the law is correct.” Fitterer Sales Mont., Inc. v. Mullin, 2015 MT 272, ¶ 16, 381 Mont. 107, 358 P.3d 885. DISCUSSION ¶9 Whether the District Court correctly determined the date upon which interest should first accrue on claims for members of the State of Montana Health Benefit Plan. ¶10 Diaz argues that §§ 18-1-404(1) and 17-8-242(2), MCA, provide interest should commence 30 days after the date on which payment was due and that the District Court erred in commencing interest on the date BCBS was decided, rather than the date the bills were incurred. The statutory sections to which Diaz refers do, in fact, provide that interest is to commence from “the date on which the payment on the contract became due” and that “[t]his liability is retroactive . . . and applies to any contract in effect or an action pending on a contract on or after May 1, 1997.” Section 18-1-404(1)(b), MCA. 6 Further, Diaz argues that, pursuant to § 18-1-404(1)(a), MCA, the State is liable with respect to any contract in the same manner as an individual and that the provision for interest is retroactive whether “due before or after a decision by the government agency or court.” Section 18-1-404(1)(b), MCA. Section 17-8-242(2), MCA, provides that payment is timely if made within 30 days of when the bill is due. ¶11 The State does not dispute that it is held to the same standard as an individual when it enters into a contract. Section 18-1-404(1)(a), MCA. The State contends that interest only accrues when an individual has a right to a monetary recovery and the right has fully vested. As the Plan provides no right of monetary recovery or for direct payment to Plan members, the State argues there is no interest liability until after a monetary right exists and has fully vested. Here, the State maintains the right of recovery was not created and could not vest until this Court determined in BCBS that the Plan’s coordination of benefits provision violated Montana’s made whole laws. Additionally, the State maintains that § 18-1-404, MCA, provides a good faith exception to the rule that interest commences when payment on the contract is due which allows for interest to be assessed following a court’s resolution of the good faith dispute. ¶12 We have previously stated that “prejudgment interest is to be awarded unless either the law or the creditor prevents the payment of principal.” Byrne v. Terry, 228 Mont. 387, 391, 741 P.2d 1341, 1343 (1987) (citing Price Building Services, Inc. v. Holms, 214 Mont. 456, 468-69, 693 P.2d 553, 559-60 (1985)). Section 27-1-211, MCA, sets forth the criteria for an award of prejudgment interest as follows: 7 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 paying the debt. ¶13 We have interpreted this statute as having three requirements a party must satisfy to be eligible for an award of prejudgment interest under § 27-1-211, MCA: (1) an underlying monetary obligation; (2) the amount of recovery must be certain or capable of being made certain by calculation; and (3) the right to recover must vest on a particular day. Kraft v. High Country Motors, Inc., 2012 MT 83, ¶ 70, 364 Mont. 465, 480-81, 276 P.3d 908; see also New Hope Lutheran Ministry v. Faith Lutheran Church of Great Falls, Inc., 2014 MT 69, ¶70, 374 Mont. 229, 328 P.3d 586; Byrne, 228 Mont. at 390, 741 P.2d at 1343; Stafford v. Fockaert, 2016 MT 28, ¶ 24, 382 Mont. 178, 366 P.3d 673. The main purpose of prejudgment interest is to compensate a party for the loss of her money during the period in which her valid claim was not paid. Byrne, 228 Mont. at 391, 741 P.2d at 1343. Finally, § 27-1-211, MCA, mandates interest “as long as the legal situation fits within the broad guidelines of the statute.” Byrne, 228 Mont. at 391, 741 P.2d at 1343. The instant proceedings involve the question of how to apply the provisions of § 18-1-404, MCA, within the context of § 27-1-211, MCA, and the newly recognized right to recovery created by our decision in BCBS. For purposes of § 18-1-404(b), MCA, Diaz stipulates that the State had a good faith basis for disputing coverage. Accordingly, Diaz is entitled to prejudgment interest if the requirements of § 27-1-211, MCA, have been satisfied. 8 ¶14 The first criterion entitling a party to prejudgment interest is the existence of a monetary obligation. Here, the State had no monetary obligation under the Plan to its members. The policy provisions of the Plan did not allow for any payment or right to monetary recovery by a Plan member. As noted previously, the Plan provides for payment to health care providers and does not provide for any direct payments to a Plan member. With respect to third-party health care providers, the Plan recognized that payment of medical expenses may not be due because the coordination of benefits provision recognized the State’s obligation as secondary to the payment from a third- party liability carrier. There is no dispute that Diaz’s medical expenses were paid in a timely manner by a third-party carrier. It was not until our decision in BCBS, that any right to monetary recovery for damages arising out of the State’s violation of the made whole laws was recognized. We conclude that the existence of an underlying monetary obligation did not exist under the Plan’s provisions until our decision in BCBS and the first criterion of § 27-1-211, MCA, has, therefore, not been established. ¶15 Our conclusion that the underlying monetary obligation did not arise until our decision in BCBS also disposes of the third criterion in § 27-1-211, MCA, that the right to recover vests on a particular day. Diaz’s right to recover did not vest until our decision in BCBS recognized, for the first time, that the Plan’s coordination of benefits provision violated Montana’s made whole laws.2 The coordination of benefits provision at issue was enforceable under Montana law until our decision to the contrary in BCBS. Thus, the 2 Prior to the instant appeal, the State maintained that interest should not begin until 30 days following our decision in Diaz III. However, the State on appeal concedes that the District Court correctly determined interest should commence following our decision in BCBS. 9 particular day on which Diaz’s right to recover vested was 30 days after our remittitur in BCBS. See § 17-8-242(2), MCA. The second criterion, that the amount of recovery is capable of being made certain by calculation, is undisputed. Nonetheless, on the basis of Diaz’s failure to establish the (1) existence of an underlying monetary obligation prior to BCBS, and (2) the right to recover prior to BCBS, we conclude that the District Court did not err in holding that for claims arising prior to December 24, 2009, interest was to commence following our decision in BCBS. ¶16 We do note, however, that BCBS was decided on September 24, 2009, and our remittitur was issued October 15, 2009. Therefore, 30 days following the remittitur was November 14, 2009. We therefore remand only for the purpose of: (1) changing the date of December 24, 2009, to November 14, 2009, as the correct date upon which interest is to commence, and (2) that the date of November 14, 2009, is also to be applied for purposes of assessing when a claim arose. For claims arising after November 14, 2009, the State shall pay interest commencing on the day the underlying medical expense was incurred. CONCLUSION ¶17 We affirm the District Court’s order declaring interest to begin 30 days following our decision in BCBS. We remand for the District Court to correct the commencement date for interest from December 24, 2009 to November 14, 2009. Additionally, the order should reflect this applies to all claims arising prior to November 14, 2009. /S/ LAURIE McKINNON 10 We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 25, 2016

221c0ae6-424d-4fdc-a502-df151a53b26b

Robak v. Ravalli County

2016 MT 286N

DA 16-0047

Montana

Montana Supreme Court

DA 16-0047 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 286N TOM ROBAK and CHARLOTTE ROBAK, Plaintiffs and Appellants, v. RAVALLI COUNTY, Defendant and Appellee. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DV-2008-472 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellants: Michael L. Rabb, The Rabb Law Firm, PLLC, Bozeman, Montana For Appellee: Bill Fulbright, Ravalli County Attorney, Howard F. Recht, Deputy County Attorney, Hamilton, Montana Submitted on Briefs: August 24, 2016 Decided: November 9, 2016 Filed: __________________________________________ Clerk 11/09/2016 Case Number: DA 16-0047 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 The issue on appeal is whether the Robaks’ appeal is timely. ¶3 This case began in 2008 when Plaintiffs Tom and Charlotte Robak (Robaks) filed a Complaint, Request for Declaratory Judgment and Demand for Jury Trial, on August 22, 2008, in response to a December 2007 letter, signed by Laura Hendrix, Ravalli County Floodplain Administrator, requesting the Robaks halt construction on their home because it was possibly in the floodplain. For the next six years, the case remained unresolved until the parties stipulated, in 2013, to a resolution of the declaratory judgment claim. The instant proceeding arises from the 2010 findings by the District Court in which it found various reasons for sanctioning the Robaks. ¶4 Based on the stipulations between the parties, the District Court issued an order dismissing the action on September 15, 2014. The following day, September 16, 2014, the Notice of Entry of Order was entered. On September 24, 2014, the Robaks appealed from the District Court’s September 15 order dismissing their case. This Court denied the Robaks’ appeal. Robak v. Ravalli County, 2015 MT 126N, DA 14-0618, 2015 Mont. LEXIS 199. Following remittitur from this Court, Ravalli County obtained two writs of execution to satisfy the sanctions award. One writ was returned October 7, 2015, 3 partially satisfied; the other writ was returned November 3, 2015, partially satisfied. During that time, the Robaks moved for the District Court to quash the writs of execution, arguing that the sanctions awards were not judgments. The District Court denied the Robaks’ motion. Two months later, on January 22, 2016, the Robaks filed their second appeal. ¶5 The standard of review of a district court’s conclusion of law is whether the interpretation is correct. Giambra v. Kelsey, 2007 MT 158, ¶ 28, 338 Mont. 19, 162 P.3d 134. The standard of review of a district court’s findings of fact is whether the findings are clearly erroneous. A finding is clearly erroneous if not supported by substantial credible evidence, if the court has misapprehended the effect of the evidence, or if upon review the record leaves the reviewing court with the definite and firm conviction a mistake has been committed. Kuzara v. State Compensation Ins. Fund, 279 Mont. 223, 229, 928 P.2d 136, 140 (1996). ¶6 “In civil cases . . . in which . . . any officer or agency thereof is a party, the notice of appeal shall be filed within 60 days from the entry of the judgment or order from which appeal is taken.” M. R. App. P. 4(5)(a)(i). This Court does not have appellate jurisdiction over matters not timely appealed. Challinor v. Glacier Nat’l Bank, 283 Mont. 342, 345, 943 P.2d 83, 85 (1997). “A party may appeal from a final judgment in an action or . . . from those final orders specified in sections (2), (3), and (4) of this rule.” M. R. App. P. 6(1) (emphasis added). A final judgment is defined as a judgment that “conclusively determines the rights of the parties and settles all claims in controversy in 4 an action or proceeding, including any necessary determination of the amount of costs and attorney fees awarded or sanction imposed.” M. R. App. P. 4(1)(a). ¶7 The District Court’s September 15, 2014 Order of Dismissal finally and conclusively determined the rights of the parties. The sanction imposed by the District Court against the Robaks became part of the final judgment. Therefore the time for Robaks to file their appeal commenced September 16, 2014, with the Notice of Entry Order, and ended November 15, 2014, sixty days later. Horton v. Horton, 2007 MT 181, ¶ 6, 338 Mont. 236, 165 P.3d 1076. After 60 days the Robaks no longer had an ability to appeal. M. R. App. P. 4(5)(a)(i). ¶8 This is the second appeal in these proceedings that the Robaks have attempted. Montana law disfavors piecemeal appeals. Farmers Union Mut. Ins. Co. v. Bodell, 2008 MT 363, ¶ 26, 346 Mont. 414,197 P.3d 913. Furthermore, matters that may have been raised or were raised on the first appeal have either been resolved or waived when the court issued its Memorandum Opinion in Robak v. Ravalli County, 2015 MT 126N, DA 14-0618, 2015 Mont. LEXIS 199. The Robaks could have appealed the sanctions in their first appeal, but they chose not to. They have waived their appeal as to those sanctions now. ¶9 The Robaks argue that since the July 28, 2010 Opinion and Order-Sanction Award was not a final judgment it was not appealable at the time of their first appeal. However, we conclude that the July 28, 2010 order was a final judgment. As such, by not including this issue in their first appeal Robaks have waived the ability to appeal the sanctions. 5 ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of relevant standards of review. ¶11 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

November 9, 2016

c26a12f3-449a-49bf-813d-587f46ef9459

Tummarello v. C.S.E.D.

2016 MT 265N

DA 15-0378

Montana

Montana Supreme Court

DA 15-0378 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 265N PHILIP TUMMARELLO, Petitioner and Appellant, v. STATE OF MONTANA, DEPARTMENT OF PUBLIC HEALTH AND HUMAN SERVICES, CHILD SUPPORT ENFORCEMENT DIVISION, Respondent and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2014-995 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Philip J. Tummarello (Self-Represented), Stevensville, Montana For Appellee: Patrick A. Quinn, Special Assistant Attorney General, Child Support Enforcement Division, Missoula, Montana Submitted on Briefs: September 21, 2016 Decided: October 18, 2016 Filed: __________________________________________ Clerk 10/18/2016 Case Number: DA 15-0378 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Phillip Tummarello (Tummarello) appeals from the April 14, 2015 order of the First Judicial District, Lewis & Clark County, denying his petition for judicial review of an administrative decision of the Montana Department of Health and Human Services, Child Support Enforcement Division (CSED), ordering the withholding of child support for his two children. We affirm. ¶3 In 2010, Tummarello’s marriage was dissolved. As part of the dissolution, the Montana Twenty-First Judicial District Court, Ravalli County, entered its Findings of Fact and Conclusions of Law, ordering Tummarello to pay $1,667 per month in child support for his two children. In 2014, one child was emancipated and an administrative hearing was held regarding the withholding of Tummarello’s income. The hearing officer found that CSED was withholding the correct amount of child support under the district court order. Tummarello then filed a petition for judicial review with the First Judicial District Court, Lewis & Clark County, challenging the administrative decision. ¶4 On February 4, 2015, the Twenty-First Judicial District Court entered an order clarifying the 2010 child support order; the court found that the total payment of $1,667 3 was intended as an aggregate of $909 for the older child and $758 for the younger child. CSED terminated the previous order and began to collect child support pursuant to the clarifying order. In March 2015, CSED filed a motion to dismiss Tummarello’s petition for judicial review, arguing that the First Judicial District Court lacked subject matter jurisdiction over the petition because the clarifying order rendered the petition over the original order moot. The District Court granted CSED’s motion and dismissed the petition. ¶5 We review a district court’s dismissal of an action for lack of subject matter jurisdiction de novo. In re Marriage of Sampley, 2015 MT 121, ¶ 6, 379 Mont. 131, 347 P.3d 1281. ¶6 On appeal, Tummarello argues that the District Court erred in dismissing his claim. Under the Montana and federal constitutions, “[t]he judicial power of Montana’s courts is limited to ‘justiciable controversies.’” Reichert v. State, 2012 MT 111, ¶ 53, 365 Mont. 92, 278 P.3d 455; see Mont. Const. art. VII, § 4(1); U.S. Const. art. III, § 2. If a question is moot, it presents a non-justiciable question and a court must dismiss the action for lack of subject matter jurisdiction. Seubert v. Seubert, 2000 MT 241, ¶ 19, 301 Mont. 382, 13 P.3d 365; M. R. Civ. P. 12(h)(3). ¶7 We conclude that the District Court correctly dismissed Tummarrello’s petition for judicial review for lack of subject matter jurisdiction. Tummarello petitioned the District Court to review the original order of the administrative law judge. This order was subsequently replaced by the clarifying order of the Twenty-First Judicial District Court and CSED terminated the original order on September 30, 2010. As such, the issue 4 Tummarello presented to the District Court for review no longer exists and is moot. Additionally, no exception to the mootness doctrine applies in this case. See, e.g., Montanans Against Assisted Suicide (MAAS) v. Bd. of Med. Exam’rs, 2015 MT 112, ¶ 16, 379 Mont. 11, 347 P.3d 1244; but see In re Mental Health of D.V., 2007 MT 351, ¶ 32, 340 Mont. 319, 174 P.3d 503. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s interpretation and application of the law was correct. ¶9 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ LAURIE McKINNON /S/ PATRICIA COTTER

October 18, 2016

9c299810-b105-4bda-9c36-6385ab40f4e4

Grizzly Security Armored Express, Inc. v. Bancard Services, Inc.

2016 MT 287

DA 16-0038

Montana

Montana Supreme Court

DA 16-0038 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 287 GRIZZLY SECURITY ARMORED EXPRESS, INC., a Montana corporation, Plaintiff and Appellant, v. BANCARD SERVICES, INC., a Montana corporation, B&B LOUNGE, INC., a South Dakota corporation, LELAND RUZICKA, an individual resident of South Dakota, and Does 1-2, Defendants and Appellees. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 13-787(C) Honorable Amy Eddy, Presiding Judge COUNSEL OF RECORD: For Appellant: Bruce A. Fredrickson, Rocky Mountain Law Partners, PLLP, Kalispell, Montana For Appellees: Dean D. Chisholm, Chisholm & Chisholm, P.C., Columbia Falls, Montana Doug Scotti, Morrison & Frampton, PLLP, Whitefish, Montana Submitted on Briefs: August 31, 2016 Decided: November 14, 2016 Filed: __________________________________________ Clerk 11/14/2016 Case Number: DA 16-0038 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Grizzly Security Armored Express, Inc. (Grizzly Security), filed suit against Bancard Services, Inc. (Bancard), and Leland Ruzicka and B&B Lounge, Inc. (collectively Ruzicka) relating to circumstances surrounding a data entry error that resulted in a substantial sum of money being deposited into the wrong bank account. Bancard and Ruzicka filed motions for summary judgment against Grizzly Security on their respective issues. The District Court determined that the claim against Ruzicka was timed barred due to the applicable statute of limitations and that the claims against Bancard failed for various reasons which we discuss herein, and awarded attorney’s fees to Bancard based on the language of the contract between the two parties. Grizzly Security appeals. We affirm. ISSUES ¶2 Grizzly Security raises four issues on appeal, which we restate: 1. Did the District Court err in granting summary judgment in favor of Leland Ruzicka and B&B Lounge, Inc.? 2. Did the District Court err in granting summary judgment in favor of Bancard Services, Inc.? 3. Did the District Court err in awarding attorney’s fees to Bancard Services, Inc.? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Grizzly Security owns a number of ATM machines at various locations in Montana. One of these ATMs is located at St. Mary’s Lodge, outside of Glacier National Park. Bancard is a Montana corporation with operations involving owning, processing, and leasing automated teller machines. In 2004, Grizzly Security and Bancard entered 3 into a Processing Service and Maintenance Agreement (PSMA). Under the terms of the PSMA, Bancard agreed to provide processing services for Grizzly Security’s ATMs. Bancard agreed to provide these services “through its agreement with First Interstate Bancorp (First Interstate), or such other processing services as [Bancorp], in its sole discretion, may select.” ¶4 Pursuant to the language in the PSMA allowing Bancorp to delegate processing services to a third party, Grizzly Security entered into an ACH Authorization Agreement (ACH Agreement) with First Interstate in June of 2004. The ACH Agreement authorized First Interstate’s electronic access into Grizzly Security’s checking account in order to deposit funds relating to ATM settlement transactions. In terms of liability, the ACH Agreement provided that First Interstate would be responsible for the “loss of funds transferred into an account not designated in the ACH Authorization Agreement in force at the time of transfer.” ¶5 In June of 2008, Bancard exercised its right under the PSMA to change the third party payment processor utilized to assist in processing ATM transactions at Grizzly Security’s ATM in St. Mary’s (among others) from First Interstate to Columbus Data Services (CDS). As part of the changeover process, Grizzly Security’s account information had to be transferred from First Interstate to CDS. This transfer required that First Interstate enter the numbers or digits of various ATM terminal IDs. During the transfer, a transposition error resulted in Grizzly Security’s ATM located at St. Mary’s becoming misidentified as an ATM located in South Dakota and owned by Ruzicka. As a result of the error, amounts belonging to Grizzly Security and totaling approximately 4 $285,520 were deposited into Ruzicka’s bank account between June 2008 and September 2009. Instead of notifying Bancard or CDS that he had received these funds in error, Ruzicka kept the money. ¶6 While the exact date is not apparent from the record in this case, Grizzly Security notified Bancard of the error in mid-2009. In turn, Bancard notified CDS of the error on September 9, 2009. Two days later, CDS notified Bancard that a technician had completed the modification Bancard had requested, updating and correcting the account file associated with Grizzly Security’s St. Mary’s ATM. After the error had been remedied, Bancard recovered approximately $250,000 of misplaced funds from Ruzicka between September 2010 and December 2010, subsequently returning the money to Grizzly Security. ¶7 At this point in the saga, the viewpoints of the parties regarding the subsequent series of events and circumstances vary dramatically. Bancard states that Grizzly Security contacted it in December 2011 regarding the remaining funds, totaling $35,520, which had not been recovered from Ruzicka. During this conversation, Bancard maintains that it informed Grizzly Security that it was under no obligation to recover the remaining funds from Ruzicka, that it had previously repeatedly informed Grizzly Security that sole liability for the missing funds lay with Ruzicka, and that Grizzly Security should seek the remainder of the funds from Ruzicka. Conspicuously absent from Bancard’s version of the facts is any reference to events during, or circumstances surrounding, the time period between December 2010, when Bancard states it ceased 5 recovery efforts from Ruzicka, and December 2011, when Bancard states it informed Grizzly Security it should seek recovery from Ruzicka directly. ¶8 Grizzly Security’s recitation of the circumstances and events surrounding the twelve-month period between December 2010 and December 2011 is strikingly different. Grizzly Security states that the missing funds were recovered on the following timeline: September 29, 2010–$50,000; October 9, 2010–$50,000; and, December 2, 2010– $150,000. Following the December 2010 payout, Grizzly Security alleges that Bancard instructed the employees it had tasked with recovery of the funds from Ruzicka to “keep quiet” about the $35,520 still outstanding, presumably hoping that Grizzly Security would not notice that these funds were still missing. In support of this allegation, Grizzly Security presented affidavits tending to show that this directive was the primary reason the two Bancard employees tasked with recovering the funds from Ruzicka, Vincent Sarff and Wendy Sarff, subsequently terminated their employment with Bancard, and that those employees believed Grizzly Security was entitled to know of the outstanding balance at that time. Grizzly Security alleges that it was only after Vincent and Wendy Sarff left Bancard’s employ and informed Grizzly Security of the outstanding funds that Grizzly Security was notified not only that $35,520 had not been collected but that Bancard had ceased collection efforts against Ruzicka. ¶9 The factual timelines presented by the parties re-converge following December 2011. Shortly after the December 2011 conversation between Bancard and Grizzly Security, Bancard states that Grizzly Security terminated all its arrangements and contracts with Bancard. In response to the cessation of the business relationship, Bancard 6 notes that it filed two pending lawsuits against Grizzly Security, alleging that Grizzly Security breached the contract contained in the PSMA and tortiously interfered with PSMAs between Bancard and other entities.1 ¶10 As noted above, there is a clear difference between both parties’ recitation of the factual narrative in this case. The District Court apparently noticed this discrepancy, stating, “For reasons unknown to the Court, [Grizzly Security] did not realize the outstanding balance had not been collected by Bancard. Bancard has denied any obligation to do so, and it appears from the record before the Court they were hoping the whole matter would be forgotten.” ¶11 In August of 2013, Grizzly Security filed a Complaint and Demand for Jury Trial in the Eleventh Judicial District Court, Flathead County, alleging that Bancard breached a contractual duty owed to Grizzly Security, that Bancard had engaged in actual or constructive fraud and/or had made negligent or intentional misrepresentations, that Bancard was negligent in its handling of Grizzly Security’s account, and that Ruzicka and B&B Lounge were unjustly enriched by the erroneous deposits. ¶12 Bancard and Ruzicka filed motions for summary judgment against Grizzly Security, addressed in more detail below. The District Court granted both motions and awarded Bancard attorney’s fees under the PSMA. 1 Bancard Services, Inc. v. Christopher Gillette d/b/a Fatt Boys and Grizzly Security Armored Express, Inc., DV-13-462(B); Bancard Services, Inc. v. Grizzly Security Armored Express, Inc., DV-14-1214(B). 7 STANDARD OF REVIEW ¶13 We review de novo a district court’s grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839 (citation omitted). Under Rule 56(c), judgment “shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200 (citation omitted). “A material fact is a fact that involves the elements of the cause of action or defenses at issue to an extent that necessitates resolution of the issue by a trier of fact.” Roe, ¶ 14 (citation omitted). “The party moving for summary judgment has the initial burden of establishing both the absence of genuine issues of material fact and entitlement to judgment as a matter of law.” Roe, ¶ 14 (citation omitted). If the moving party meets this burden, then the burden “shifts to the nonmoving party to establish that a genuine issue of material fact does exist.” Roe, ¶ 14 (citation omitted). If no genuine issues of material fact exist, the district court “then determines whether the moving party is entitled to judgment as a matter of law.” Roe, ¶ 14 (citation omitted). Finally, “[o]ur de novo standard of review of summary judgment decision allows us to review the record and make our own determinations regarding the existence of disputed issues of fact and entitlement to judgment as a matter of law.’” Chapman v. Maxwell, 2014 MT 35, ¶ 12, 374 Mont. 12, 322 P.3d 1029 (quoting Wurl v. Polson School District No. 23, 2006 MT 8, ¶ 29, 330 Mont. 282, 127 P.3d 436). 8 DISCUSSION ¶14 1. Did the District Court err in granting summary judgment in favor of Leland Ruzicka and B&B Lounge, Inc.? ¶15 Grizzly Security alleges that defendants B&B Lounge and Ruzicka were unjustly enriched by retaining the funds erroneously deposited into their account. Ruzicka does not contest that funds were deposited into the account, nor does Ruzicka contest that he has failed to return the remainder of the funds. It is undisputed that Grizzly Security notified Bancard of the missing funds in mid-2009. While the exact date is unclear, the notification occurred sometime prior to September 2009, when Bancard subsequently notified CDS of the error. Further, the record reflects that after CDS corrected the data entry error in September 2009, no erroneous deposits occurred. ¶16 In Montana, an action for unjust enrichment must be brought within three years. Christian v. Atl. Richfield Co., 2015 MT 255, ¶ 14, 380 Mont. 495, 358 P.3d 131. The period of limitation begins to run “when all elements of the claim exist or have occurred.” Christian, ¶ 53; § 27-2-102(2), MCA. Further, “[l]ack of knowledge of the claim or cause of action, or of its accrual, by the party to whom it has accrued does not postpone the beginning of the period of limitation.” Section 27-2-102(2), MCA. The latest possible date on which the unjust enrichment claim against Ruzicka could have accrued was in September 2009, the latest date upon which an erroneous deposit could have been debited into Ruzicka’s account. Grizzly Security filed this lawsuit in August of 2013, well after the applicable three-year statute of limitations had run. 9 ¶17 However, Grizzly Security argues that the exception this Court recognized in N. Cheyenne Tribe v. Roman Catholic Church, 2013 MT 24, 368 Mont. 330, 296 P.3d 450, where a relationship of trust and confidence between the parties tolls the statute of limitations until an adverse interest is asserted, should apply in the instant case. When addressing this matter below, the District Court noted that “the uncontradicted facts of this case are that at the time the elements of the claim of unjust enrichment arose, between May 2008 and September 2009, [Grizzly Security and Ruzicka] had utterly no relationship, business or otherwise, let alone the type of ‘relationship of trust and confidence’ relied upon by the Montana Supreme Court” in previous cases. We agree. ¶18 As noted by the District Court, we previously addressed the existence of a “relationship of trust and confidence,” sufficient to toll the statute of limitations for an unjust enrichment claim in N. Cheyenne Tribe, in which the parties had interacted with each other for over 50 years. The Church had raised significant sums of money on behalf of the Tribe, and the Tribe had routinely demanded disbursements of those funds. N. Cheyenne Tribe, ¶¶ 15-17. Further, we noted that a commentator had suggested “[t]he Cheyenne people viewed the [Church] as a means to improve their material condition on the reservation and as an intermediary who might speak for the Cheyenne people to federal officials.” N. Cheyenne Tribe, ¶ 15. In summary, the relationship of trust and confidence between the Tribe and the Church was based on a quantifiable relationship and a history of fiduciary obligations. ¶19 In the instant case, the record reflects that the only commonality between Grizzly Security and Ruzicka was the fact that they were both customers of Bancard. This fact 10 does not establish a relationship of trust and confidence. Therefore, the District Court did not err by dismissing Grizzly Security’s unjust enrichment claim against Ruzicka as barred by the statute of limitations. ¶20 2. Did the District Court err in granting summary judgment in favor of Bancard Services, Inc.? ¶21 Grizzly Security argues that the District Court erred by either ignoring issues of material fact sufficient to preclude summary judgment in its analysis or impermissibly resolving issues of material fact in favor of Bancard in its analysis of each of the following issues: whether Bancard owed a contractual duty to Grizzly Security; whether Bancard owed a duty to Grizzly Security outside of its contractual obligations; and, whether Bancard’s conduct constituted actual or constructive fraud and/or negligent or intentional misrepresentation. Further, Grizzly Security argues that the District Court misapplied the law in determining that Bancard did not breach the implied covenant of good faith and fair dealing. We address each theory in turn. BREACH OF A CONTRACTUAL DUTY ¶22 The District Court determined that no genuine issues of material fact precluded the conclusion that, as a matter of law, Bancard did not have an obligation arising out of the PSMA to monitor the deposits being made by First Interstate or CDS, or to guarantee recovery of the misplaced funds. In reaching this determination, the District Court held that there was no specific written contractual duty owed to Grizzly Security contained in the PSMA that had been breached. Further, the District Court determined that no oral contract, whereby Bancard allegedly agreed to ensure complete recovery of the funds on 11 behalf of Grizzly Security, existed between the parties. We address the existence of contractual duty under the PSMA and the existence of an oral contract separately. A. Contractual Duty under the PSMA ¶23 Grizzly Security argues that the PSMA clause requiring Bancard to provide processing services to Grizzly Security through a processing bank and giving Bancard full discretion as to the identity of the processing bank implicitly required that a transition between processing banks occur in a reasonable manner that didn’t jeopardize Grizzly Security. Grizzly Security argues that this implicit duty was breached when the account entry error occurred during the transition between First Interstate and CDS. Further, Grizzly Security argues that this conclusion is supported by testimony from Wendy Sarff, who stated she was the Bancard employee assigned to verify the account numbers during the transition from First Interstate to CDS. ¶24 Grizzly Security draws our attention to a clerical error by the District Court relating to this issue. In its order granting summary judgment, the District Court stated that Ms. Sarff’s testimony indicated that CDS, not Bancard, was the entity that recognized and assumed responsibility to verify the account information that was being provided. This is incorrect. Ms. Sarff stated that, as an employee of Bancard, she was tasked with verifying the account information during the transfer and that, due to time constraints, she was instructed to verify only every fifteenth account number for accuracy. Ms. Sarff stated that, if she had been allowed to check each account number, the error would have been identified and corrected during the transfer. 12 ¶25 In response, Bancard argues that the obligation to verify that any third-party processing is performed correctly cannot be imputed to Bancard without inserting new substantive language into the PSMA. Bancard argues that because the PSMA grants Bancard sole authority to change data processors (as illustrated by its decision to change servicers from First Interstate to CDS), it is shielded from liability for errors occurring during that transition by the clauses in the PSMA limiting liability in general. Bancard notes that the ACH Authorization Agreement between Grizzly Security and First Interstate “expressly contemplates [Grizzly Security] holding [First Interstate] accountable for loss of funds transferred to an account not designated . . . at the time of transfer.” The subsequent agreement between Grizzly Security and CDS has a similar provision and required that Grizzly Security audit its own account and notify CDS within 30 days of the date on which funds go missing. ¶26 In response to Grizzly Security’s statements involving the testimony of Ms. Sarff, Bancard argues that it had no legal obligation to verify the account numbers during the transition between First Interstate and CDS. Bancard supports this conclusion by stating that it did not have access to Grizzly Security’s bank accounts and that it had no way of knowing if the funds had been correctly deposited until Grizzly Security notified it of the error. ¶27 The construction and interpretation of a contract is a question of a law. State ex rel. Bullock v. Philip Morris, Inc., 2009 MT 261, ¶ 16, 352 Mont. 30, 217 P.3d 475. “When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone if possible.” Section 28-3-303, MCA. “If the language of a 13 contract is unambiguous—i.e., reasonably susceptible to only one construction—the court must apply the language as written.” State ex rel. Bullock, ¶ 16 (citing Mary J. Baker Revocable Trust v. Cenex Harvest States, 2007 MT 159, ¶ 19, 338 Mont. 41, 164 P.3d 851). ¶28 Section 17 of the PSMA states, in relevant part, [BANCARD] SHALL IN NO EVENT BE RESPONSIBLE FOR ANY LOST PROFITS OR DIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR IN DIRECT [sic] DAMAGES THAT [GRIZZLY SECURITY] MAY INCUR. [BANCARD’S] SOLE LIABILITY TO [GRIZZLY SECURITY] HEREUNDER, EXCEPT AS OTHERWISE PROVIDED, SHALL BE TO REMEDY ANY BREACH IN A TIMELY MANNER. FURTHERMORE, BANCARD SERVICES INC. SHALL BE HELD HARMLESS FROM ANY LIABILITY CONCERNING [GRIZZLY SECURITY’S] PREVIOUS AGREEMENTS WITH ANY OTHER ENTITY, BUSINESS, OR ATM PROCESSOR. The language of this provision and the language of the PSMA in general is unambiguous. Grizzly Security seeks the recovery of money that, it argues, Bancard is liable for misplacing. However, the language of § 17 precludes a determination that Bancard is liable, as it expressly disclaims responsibility for any lost profits or other damages incurred by Grizzly Security. ¶29 In summary, Grizzly Security cannot impute a duty to Bancard that is expressly contradicted by a provision in the written contract between the two parties. Were we to hold that Bancard was liable, it would force a conclusion that Bancard would be responsible for Grizzly Security’s lost profits or other damages stemming from the erroneous banking transactions. This conclusion would render § 17 of the PSMA void. Further, while not dispositive of our determination here, we note that Grizzly Security’s 14 contracts with both First Interstate and CDS contemplated that Grizzly Security would hold those parties liable for precisely the type of error that occurred in this case. For these reasons, we determine that the District Court did not err in granting summary judgment under the contract in favor of Bancard. B. Existence of an Oral Contract ¶30 As noted above, Grizzly Security also alleges that it entered into an oral contract with Bancard whereby Bancard agreed to ensure complete recovery on Grizzly Security’s behalf. In granting summary judgment in favor of Bancard, the District Court determined that the testimony of Greg Harris, Grizzly Security’s President, coupled with Bancard’s denial of an oral contract, “satisfies this Court that there is no genuine issue of material fact that the parties did not enter into an oral contract which specifically conflicted with the terms and obligations of the written contract.” ¶31 Bancard contends that Grizzly Security’s position regarding the creation of an oral agreement is both “vague and otherwise heavily contradicted.” Bancard argues that the fact it “received no consideration—nothing whatsoever—in exchange for this alleged promise to ‘collect-or pay’” is evidence against the formation of an oral agreement. Further, Bancard states that the evidence offered by Grizzly Security is, at best, unclear, and that any collection efforts it undertook were voluntary and conducted while the PSMA was still in effect. ¶32 Grizzly Security argues the District Court erred by resolving issues of material fact in favor of Bancard, improperly making findings of fact, and weighing the evidence in favor of Bancard. Specifically, Grizzly Security argues that the District Court selectively 15 relied on the testimony of Mr. Harris, and failed to consider the parts of his testimony that directly evidenced an oral contract between the two parties. Further, Grizzly Security argues that the District Court ignored testimony by Vincent Sarff, which allegedly evidenced the existence of an oral contract. ¶33 In support of its argument, Grizzly Security directs this Court to the general rule that, “[w]here the existence of an oral contract is contested and the evidence is conflicting, the existence of a contract is a question for the trier of fact.” Como v. Rhines, 198 Mont. 279, 284, 645 P.2d 948, 950-51 (1982) (citations omitted). However, as noted by the District Court, Montana law requires that “[a] contract in writing may be altered by a contract in writing or by an executed oral agreement, and not otherwise.” Section 28-2-1602, MCA. “An executed oral agreement exists where the obligations of both parties have been fully performed, and nothing remains to be done by either party.” Morrow v. Bank of America, N.A., 2014 MT 117, ¶ 26, 375 Mont. 38, 324 P.3d 1167. “Full execution must occur on both sides of the agreement.” Richards v. JTL Group, Inc., 2009 MT 173, ¶ 20, 350 Mont. 516, 212 P.3d 264. “Performance by only one party is not sufficient.” Morrow, ¶ 26. As articulated by Bancard, were an oral contract found to exist in this case, it would have been created while the PSMA was still in force. Therefore, because we determine that § 28-2-1602, MCA, applies, the threshold question is whether an executed oral agreement exists. ¶34 Initially, we note that it is undisputed that the obligations of the parties have not been fully performed in this case. Indeed, had the parties fully performed the obligations allegedly contained within the oral agreement, Bancard would have delivered the 16 remaining funds to Grizzly Security and this case would not be before the Court. Therefore, we are faced with a question of statutory interpretation: does § 28-2-1602, MCA, require full performance in order for an executed oral agreement to exist? We have addressed this question in previous cases, although with conflicting results. A review of our previous decisions on this issue is instructive. ¶35 In Dalakow v. Geery, 132 Mont. 457, 318 P.2d 253 (1957), we addressed a situation where the plaintiff had fully performed under the alleged oral modification of the contract, and the defendant had received a benefit not provided for in the written contract. Dalakow, 132 Mont. at 467, 318 P.2d at 259. We held that, under that factual scenario, justice and equity guided the conclusion that execution by only one party was sufficient to allow enforcement of the modification against the other party. Dalakow, 132 Mont. at 467, 318 P.2d at 259. ¶36 However, in Winkel v. Family Health Care, P.C., 205 Mont. 40, 668 P.2d 208 (1983), a case with a similar factual narrative to the instant appeal, we limited this holding significantly. In Winkel, the issue before this Court was whether the plaintiff, Winkel, could take advantage of an alleged oral modification to an employment contract, promising a share of the profits from a business. Winkel, 205 Mont. at 45-46, 668 P.2d at 210-11. Defendant Vranish argued that Winkel was not entitled to a profit sharing bonus because the written employment contract did not provide for such a bonus and was never amended as a matter of law under § 28-2-1602, MCA. Winkel, 205 Mont. at 45, 668 P.2d at 210. Interpreting the requirements of the statute, we held that because “the oral agreement concerning [the] profit-sharing bonus was never performed . . . the oral 17 agreement was not executed.” Winkel, 205 Mont. at 46, 668 P.2d at 211. In other words, because Vranish had never given Winkel the profit sharing bonus, the oral agreement was never performed and, therefore, the oral agreement was never executed and the written contract remained unaltered. Winkel, 205 Mont. at 46, 668 P.2d at 211. ¶37 The resulting rule from Winkel, that an oral agreement must be fully performed by both parties in order for it to be executed, is arguably harsh, but in line with the plain meaning of § 28-2-1602, MCA. Applied to the instant case, the result is clear. Even if we were to determine that the alleged oral agreement existed, Bancard did not fully perform. As noted above, if Bancard had fully performed, this case would not be before the court. Therefore, as Bancard has not fully performed, the oral agreement remains unexecuted and the original written contract between Grizzly Security and Bancard remains unaltered. Under this analysis, we hold that the District Court did not error in granting summary judgment in favor of Bancard on the existence of an oral agreement. IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING ¶38 Grizzly Security also argues that the District Court erred by dismissing its claim involving breach of the implied covenant of good faith and fair dealing because of its determination that there was no contract to which the covenant attached and its failure to consider the honesty in fact prong of the covenant. ¶39 Under Montana law, “[e]very contract, regardless of type, contains an implied covenant of good faith and fair dealing. A breach of the covenant is a breach of the contract. Thus, breach of an express contractual term is not a prerequisite to breach of the implied covenant.” Masters Group Int’l, Inc. v. Comerica Bank, 2015 MT 192, ¶ 67, 18 380 Mont. 1, 352 P.3d 1101 (quoting McCoy v. First Citizens Bank, 2006 MT 307, ¶ 21, 335 Mont. 1, 148 P.3d 677). “The conduct required by the implied covenant of good faith and fair dealing is honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.” Section 28-1-211, MCA. We have interpreted this statute as allowing either dishonesty or commercially unreasonable conduct to implicate the covenant. May v. ERA Landmark Real Estate of Bozeman, 2000 MT 299, ¶ 49, 302 Mont. 326, 15 P.3d 1179. Where a party seeks to prove commercially unreasonable conduct, this Court has held that, in the absence of statutorily defined standards of conduct, expert testimony is required. See May, ¶¶ 46-48. Proving conduct that violates the honesty in fact requirement, however, does not require expert testimony. May, ¶ 49. ¶40 When determining issues involving the implied covenant of good faith and fair dealing, we have consistently held that the covenant is “a mutual promise that the contracting parties will not attempt, through dishonesty or abuse of discretion in performance, to deprive each other of the benefits of the contract.” Phelps v. Frampton, 2007 MT 263, ¶ 38, 339 Mont. 330, 170 P.3d 474 (citing Beaverhead Bar Supply v. Harrington, 247 Mont. 117, 124, 805 P.2d 560, 564 (1991)) (emphasis in original). Further, we have held that evidence that the other party acted in bad faith is, by itself, insufficient to maintain a claim for breach of the covenant. Phelps, ¶ 39. We have required that a “claimant must also come forward with evidence sufficient to support the conclusion that as a result of the other party’s action, the claimant was deprived of a benefit or a justified expectation under the contract.” Phelps, ¶ 39. A determination of whether an expectation was justified under the contract “depends on the various 19 circumstances that surround the parties’ relationship and thereby shape or give contour to the expectation in the first instance.” Phelps, ¶ 39. ¶41 As we have determined that there was not an executed oral agreement modifying the underlying contract in this case, our case law requires that Grizzly Security present evidence sufficient to support the conclusion that, as a result of Bancard’s actions, it was deprived of a benefit or justified expectation under the PSMA. Grizzly Security has not presented such evidence. The benefit that Grizzly Security implies exists in this case is that Bancard is required to recover any missing or misplaced funds on its behalf. Grizzly Security has not directed this Court to any clause of the contract that requires or confers such a benefit. Further, Grizzly Security has presented no evidence that forcing Bancard to recover these funds is a justified expectation under the contract. The circumstances surrounding the parties’ relationship, specifically the subcontracts Bancard required Grizzly Security to sign with both First Interstate and CDS which explicitly state that those two entities would be liable under circumstances as present in this case, establish that Grizzly Security’s expectation that Bancard would recover the funds or had a duty to recover the funds was not justified. ¶42 We therefore conclude that the District Court did not err in granting summary judgment to Bancard on Grizzly Security’s claims for breach of the implied covenant of good faith and fair dealing. ACTUAL OR CONSTRUCTIVE FRAUD ¶43 Grizzly Security argues that the District Court erred in granting summary judgment to Bancard on Grizzly Security’s claims of actual and/or constructive fraud by 20 improperly weighing the evidence in favor of Bancard and resolving issues of material fact in favor of Bancard. We address each theory in turn. A. Fraud ¶44 We have clearly defined the requirements a party must meet when claiming fraud: To survive a motion for summary judgment, a party alleging fraud must establish a prima facie case by providing evidence of the following elements: 1. a representation; 2. its falsity; 3. its materiality; 4. the speaker’s knowledge of its falsity or ignorance of its truth; 5. the speaker’s intent that it should be acted upon by the person and in the manner reasonably contemplated; 6. the hearer’s ignorance of its falsity; 7. the hearer’s reliance upon its truth; 8. the right of the hearer to rely upon it; and 9. the hearer’s consequent and proximate injury or damage. May, ¶ 21. ¶45 After reviewing the record, we determine that Grizzly Security has not met its burden of establishing a prima facie case of fraud. In its complaint Grizzly Security states in conclusory fashion: “Bancard’s actions have resulted in damages to Grizzly all in an amount to be proven at trial.” Further, Grizzly Security’s Reply to Bancard’s Motion for Summary Judgment does not state what injury or damage occurred as a result of the alleged fraudulent statement. Liberally construing the argument on appeal, it appears Grizzly Security would argue that its inability to recover the remaining funds from Ruzicka is the consequent and proximate damage of Bancard’s alleged fraudulent statement. We disagree. 21 ¶46 The fraud Grizzly Security claims is Bancard’s alleged concealment of the fact that it would not continue to pursue recovery of the remaining funds from Ruzicka. It follows, then, that the injury to Grizzly Security must have occurred between the time of the alleged fraud, December 2010 (at the earliest), and the time the alleged fraud was discovered, December 2011. Grizzly Security has not described any injury, apart from the fact that a sum remains unrecovered from Ruzicka, that occurred as a direct result of this alleged concealment. Bancard’s alleged concealment was not the cause of the funds being deposited into Ruzicka’s account. Bancard’s alleged concealment did not prevent Grizzly Security from seeking the funds on its own accord. Notably, Grizzly Security has not argued that Bancard’s alleged concealment prevented its recovery against Ruzicka. Therefore, under these facts, we find that Grizzly Security has not provided evidence that Bancard’s alleged concealment, even if we assume it occurred, has injured or caused damages to Grizzly Security. ¶47 After a review of the record and under our analysis above, we determine that the District Court did not err in granting summary judgment to Bancard on Grizzly Security’s claims of fraud. 22 B. Constructive Fraud2 ¶48 Grizzly Security’s arguments involving constructive fraud are similar to those it presented in support of its arguments for actual fraud: the District Court improperly weighed the evidence when granting summary judgment in favor of Bancard. In its Order and Rationale on Summary Judgment, the District Court again relied on its determination that “there is no evidence that either Shaun or Russell Pandina, or Vincent Sarff, affirmatively stated to Greg Harris that Bancard would either obtain full reimbursement from [Ruzicka] or that Bancard would pay whatever [Ruzicka] did not refund,” when granting summary judgment in favor of Bancard. ¶49 In Montana, a claim for constructive fraud “merely requires the establishment of a duty.” Morrow, ¶ 63 (quoting Mattingly, 285 Mont. at 218, 947 P.2d at 72). We have held that “[u]nder certain special circumstances, neither a confidential nor a fiduciary relationship is necessary for a finding of constructive fraud.” Mattingly, 285 Mont. at 219, 947 P.2d at 72 (internal quotation marks omitted). In defining these “special circumstances,” we have stated that “[a] duty sufficient to support a finding of constructive fraud ‘may exist where one party has acted to mislead the other in some way.’” Morrow, ¶ 64 (quoting Mattingly, 285 Mont. at 219, 947 P.2d at 72). A review 2 We note briefly that, while the constructive fraud statute cited by both the District Court and Grizzly Security is located within the subsection entitled “Circumstances Which Affect Validity of Apparent Consent” and is therefore generally applicable only in cases involving apparent consent to contract, we have previously held that constructive fraud in particular, within the meaning of § 28-2-406, MCA, allows a plaintiff to seek damages independent of a contract action. Morrow, ¶ 62; Mattingly v. First Bank of Lincoln, 285 Mont. 209, 218-20, 947 P.2d 66, 71-73 (1997); Lee v. Armstrong, 244 Mont. 289, 295, 798 P.2d 84, 88 (1990). 23 of our case law applying this rule is instructive as to why it is not implicated in the instant case. ¶50 In McGregor v. Mommer, 220 Mont. 98, 714 P.2d 536 (1986), we summarized one such special circumstance as existing “[w]here sellers, by words or conduct, create a false impression concerning serious impairments or other important matters and subsequently fail to disclose the relevant factors.” McGregor, 220 Mont. at 109, 714 P.2d at 543 (citing Moschelle v. Hulse, 190 Mont. 532, 538-39, 622 P.2d 155, 159 (1980)). In McJunkin v. Kaufman & Broad Home Systems, Inc., 229 Mont. 432, 748 P.2d 910 (1987), we noted that another special circumstance could exist between parties to a commercial transaction relating to the purchase of a mobile home from a manufacturer/seller, holding “defendants had a duty to refrain from intentionally or negligently creating a false impression by words or conduct.” McJunkin, 299 Mont. at 435-436, 439, 748 P.2d at 912-13, 915. In Mattingly v. First Bank of Lincoln, we determined that the requisite special circumstance existed where the seller of a gas station made misleading statements about the condition or value of the property to the subsequent purchaser. Mattingly, 285 Mont. at 219-220, 947 P.2d at 72-73. Further, in H-D Irrigating, Inc. v. Kimble Props., Inc., 2000 MT 212, 301 Mont. 34, 8 P.3d 95, we held that the special circumstance requirement was met where a seller created a false impression relating to the effectiveness of equipment he was selling. H-D Irrigating, Inc., ¶¶ 25-30. Finally, and perhaps most instructively, we recently addressed this issue in Morrow v. Bank of America, N.A., where we stated “[c]onstructive fraud is a breach of duty, which without fraudulent intent, creates an advantage for the breaching party by 24 misleading another person to that person’s prejudice.” Morrow, ¶ 62. Our statement in Morrow illuminates what has been implicit in our previous decisions involving constructive fraud: the allegedly fraudulent party must gain some advantage over a party to that party’s prejudice. ¶51 Turning to the instant case, we have not identified a duty owed by Bancard to Grizzly Security that would require the full repayment of the missing funds or require that Bancard continue to seek the funds from Ruzicka. In the absence of such an articulable duty, we hold that Grizzly Security may not take advantage of the general rule relating to constructive fraud allowing special circumstances to alleviate the duty requirement. As a review of our case law indicates, we have yet to expand this duty outside of the circumstances where one party gains an advantage over the other party to that party’s prejudice. Grizzly Security does not allege or identify any benefit gained by Bancard through its alleged misrepresentations. Further, Grizzly Security does not indicate what prejudice it faced as a result of Bancard’s alleged misrepresentations. Therefore, the exception to the general rule that constructive fraud requires a duty is inapplicable in this case. ¶52 Accordingly, under the above analysis, we determine that the District Court did not err in granting summary judgment to Bancard on Grizzly Security’s claim of constructive fraud. NEGLIGENT OR INTENTIONAL MISREPRESENTATION ¶53 Grizzly Security argues that the District Court erred in granting summary judgment in favor of Bancard on its claim of negligent or intentional misrepresentation 25 because issues of material fact exist. In granting summary judgment, the District Court determined the testimony provided by Russell Pandina, the principal officer and owner of Bancard, coupled with Grizzly Security’s failure “to establish, by admissible evidence” that Bancard, through any of its representatives, made the representation to Grizzly Security that Bancard would guarantee return of the missing funds or reimburse Grizzly Security for any funds that were not returned, was dispositive. ¶54 We have adopted the following definition of negligent misrepresentation: One who, in the course of his business, profession or employment, or in any other transaction to 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. Morrow, ¶ 45 (citations omitted). This definition has been expanded to require that the following elements be met: a) the defendant made a representation as to a past or existing material fact; b) the representation must have been untrue; c) regardless of its actual belief, the defendant must have made the representations without any reasonable ground for believing it [sic] to be true; d) the representation must have been made with the intent to induce the plaintiff to rely on it; [and] e) the plaintiff, as a result of its reliance, must sustain damage. Morrow, ¶ 45 (citations omitted). ¶55 Grizzly Security argues that Bancard recognized its obligation to collect when it proceeded to recover funds from Ruzicka and that this constitutes a representation which, after Bancard later asserted that it did not have an obligation to recover funds, was false or made without reasonable grounds for believing it was true. We disagree, but find it 26 unnecessary to delve into the merits of that argument in light of the fact that Grizzly Security has failed to demonstrate the damage it sustained as a result of its purported reliance on these alleged misrepresentations. We reiterate that, while we recognize that a portion of the misplaced funds remain outstanding, those funds were not misplaced as a result of Bancard’s alleged misrepresentation, and Grizzly Security has not demonstrated how that representation, if it did occur, caused it to be unable to recover those funds from Ruzicka or pursuant to its ACH Agreement with CDS. Therefore, under the above analysis, we determine that the District Court did not err in granting summary judgment to Bancard on Grizzly Security’s claims for negligent or intentional misrepresentation. BREACH OF A GENERAL DUTY ¶56 In its reply brief to Bancard’s motion for summary judgment, Grizzly Security argued that, “[o]nce [Bancard] had made its representations to Mr. Harris that it would collect the funds owing . . . [Bancard’s] duty was established and it had an obligation to use reasonable efforts to see it through.” In addressing this argument, the District Court construed the duty to collect outstanding funds as an offshoot of the contractual claims and subsequently dismissed it. However, the District Court noted that the claim involving a duty to deposit funds into the correct account was separate and distinct from the contractual duty analysis. Because Grizzly Security takes issue with both determinations on appeal, we address each issue. ¶57 A cause of action for negligence requires four elements: duty, a breach of that duty, causation, and damages. Henricksen v. State, 2004 MT 20, ¶ 20, 319 Mont. 307, 84 P.3d 38 (citing Wiley v. City of Glendive, 272 Mont. 213, 217, 900 P.2d 310, 312 27 (1995)). “The existence of a legal duty is a question of law to be determined by the court.” Fisher v. Swift Transportation Co., 2008 MT 105, ¶ 17, 342 Mont. 335, 181 P.3d 601 (citations omitted). “In analyzing whether a duty exists, we consider whether the imposition of that duty comports with public policy, and whether the defendant could have foreseen that his conduct could have resulted in an injury to the plaintiff.” Fisher, ¶ 17 (citing Henrickson, ¶ 21). ¶58 On appeal, Grizzly Security simply restates, as a broad proposition, that “Bancard had a duty to finish what it started and had a further duty to inform Grizzly, up front, if it did not believe it had a duty to collect.” Grizzly Security cites no legal authority for the preposition that where a party to a contract voluntarily performs an act outside of that contract, it assumes a duty to complete performance of that act to the satisfaction of the other party. Further, the scope of this general duty alleged by Grizzly Security, if it were to exist, is necessarily limited by the other claims raised by Grizzly Security in this case. To illustrate, as stated above, we hold that Bancard has not violated either a contractual duty owed to Grizzly Security, or the duty required by the implied covenant of good faith and fair dealing. Further, we have held that Bancard did not engage in actual or constructive fraud or make negligent or intentional misrepresentations. Therefore, any general duty that would exist here must exist outside of the scope of these issues we have already addressed. As a matter of public policy, we are not inclined to find that a company, like Bancard, has violated some general duty and opened itself up to liability for endeavoring to retrieve funds it was under no identifiable obligation to retrieve. 28 ¶59 Finally, Grizzly Security argues that Bancard had a “duty to inform [Grizzly Security], up front, if it did not believe it had a duty to collect.” Grizzly Security did not raise the question of whether Bancard had a duty to so inform Grizzly Security prior to this appeal. Our rule with regard to arguments presented for the first time on appeal is well established. We will generally “not address either an issue raised for the first time on appeal or a party’s change in legal theory. The basis for the general rule is that it is fundamentally unfair to fault the trial court for failing to rule correctly on an issue it was never given the opportunity to consider.” Becker v. Rosebud Operating Servs., Inc., 2008 MT 285, ¶ 17 345 Mont. 368, 191 P.3d 435 (quoting Unified Industries, Inc., v. Easley, 1998 MT 145, ¶ 15, 289 Mont. 255, 961 P.2d 100) (internal citations and quotations omitted). Therefore, we hold that the District Court did not err in granting summary judgment to Bancard on Grizzly Security’s claim of general negligence. ¶60 3. Did the District Court err in awarding attorney’s fees to Bancard Services, Inc.? ¶61 The District Court awarded attorney’s fees to Bancard in the amount of $21,500, and costs in the amount of $171, for a total judgment of $21,671. Further, the District Court held that Bancard would be entitled to an award of attorney’s fees incurred during the instant proceeding. On appeal, Grizzly Security argues solely that, because “material issues of fact exist with respect to the contract claims, this Court should reverse the District Court’s fee award pending the jury’s determination of all issues in this action.” As noted above, we affirm the District Court’s grant of summary judgment in this case. Therefore, because § 15 of the PSMA expressly states that the prevailing party is entitled 29 to attorney’s fees and costs for any action instituted to enforce or interpret the terms of the PSMA, we affirm the District Court’s award of attorney’s fees and costs. CONCLUSION ¶62 Based on the foregoing, the District Court did not err in granting summary judgment to Bancard and Ruzicka, or in awarding attorney’s fees to Bancard under the terms of the PSMA. We remand to the District Court to determine the attorney’s fees incurred during this appeal. Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA Justice Laurie McKinnon, specially concurring. ¶63 While I agree that the District Court’s order resolving the parties’ motions for summary judgment should be affirmed, I would do so along the more succinctly stated analysis provided in the District Court’s order. In my opinion, the Court’s analysis is excessively long, far-reaching, and unnecessary. Such an analysis, while not immediately problematic for the case at hand, may potentially be cumbersome for the Court to deal with in the future. Further, for reasons I have previously provided in my dissent in Morrow v. Bank of America, N.A., I disagree with the Court’s analysis regarding constructive fraud. See ¶¶ 72-99 (McKinnon, J., dissenting). /S/ LAURIE McKINNON

November 14, 2016

3034828a-134a-467e-9496-3e8df3bae2a7

Department of Revenue v. Alpine Aviation, Inc

2016 MT 283

DA 15-0732

Montana

Montana Supreme Court

DA 15-0732 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 283 STATE OF MONTANA, DEPARTMENT OF REVENUE, Petitioner and Appellee, v. ALPINE AVIATION, INC., Respondent and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 14-286 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Max A. Hansen, Max A. Hansen & Associates, P.C., Dillon, Montana For Appellee: Brendan R. Beatty, Courtney Mathieson, Elizabeth M. Roberts, Special Assistant Attorneys General, Helena, Montana Submitted on Briefs: September 14, 2016 Decided: November 9, 2016 Filed: __________________________________________ Clerk 11/09/2016 Case Number: DA 15-0732 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Alpine Aviation, Inc. (Alpine) appeals the interlocutory adjudication of the First Judicial District Court, Lewis and Clark County, interpreting the phrase “regularly scheduled flights” within § 15-23-401(1), MCA. We affirm in part and reverse in part. ¶2 We consider the following issue on appeal: Did the District Court correctly interpret the phrase “regularly scheduled flights” in § 15-23-401(1), MCA? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On May 31, 2013, the Montana Department of Revenue (DOR) informed Alpine it would be centrally assessed pursuant to §§ 15-23-101 and 15-6-145, MCA. Alpine filed a request for reclassification, which was denied by the DOR. ¶4 DOR and Alpine both waived proceedings before the DOR Office of Dispute Resolution, and Alpine filed an appeal with the State Tax Appeal Board (STAB). After the initial STAB pleadings were filed, DOR brought an interlocutory appeal to the District Court pursuant to § 15-2-304, MCA, seeking an “adjudication of the meaning of ‘scheduled airline’ and ‘scheduled air commerce’ for Montana property tax purposes.” These terms are further informed by the statutory phrase “regularly scheduled flights,” the meaning of which was fully briefed by both parties. ¶5 On May 14, 2015, the District Court issued an order for interlocutory adjudication, holding that “scheduled airline company” under the statute means “any person who undertakes directly or indirectly to engage in the business of transportation by aircraft of persons or property for hire in interstate, intrastate, or international transportation on 3 regularly scheduled flights,” and that, in turn, “regularly scheduled flights” are “those which follow a patterned but not necessarily uniform interval according to timetables and locations predefined by the carrier and which fly regardless of whether there are passengers or freight to be carried.” Alpine appeals. STANDARD OF REVIEW ¶6 We review issues of statutory interpretation for correctness. Westmoreland Res. Inc. v. Dep’t of Revenue, 2014 MT 212, ¶ 5, 376 Mont. 180, 330 P.3d 1188. DISCUSSION ¶7 This matter comes before us pursuant to statutes uniquely authorizing interlocutory adjudications and appeals from those adjudications. Section 15-2-305, MCA, provides: Jurisdiction to make interlocutory adjudication. A district court may make an interlocutory adjudication of an issue pending before the state tax appeal board if that issue involves procedure, the admissibility of evidence, or a substantive question of law and does not require the determination of a question of fact. If the petition is granted, the district court shall rule on all issues presented in the petition and the response, regardless of whether a ruling on less than all of the issues is dispositive of the case. Appeals from the ruling of the court may be appealed as in other civil actions.1 ¶8 DOR is required to “centrally assess each year . . . all property of scheduled airlines.” Section 15-23-101(3), MCA. A “scheduled airline company” is defined as “any person who undertakes directly or indirectly to engage in the business of scheduled 1 Article VII, Section 4 of the Montana Constitution is entitled “District court jurisdiction.” It provides, in part, that “The legislature may provide for direct review by the district court of decisions of administrative agencies.” Mont. Const. art. VII, § 4(2). 4 air commerce.” Section 15-23-401(8), MCA. In turn, “air commerce” is defined as “the transportation by aircraft of persons or property for hire in interstate, intrastate, or international transportation on regularly scheduled flights.” Section 15-23-401(1), MCA (emphasis added). “Regularly scheduled flights” is not separately defined in the Code, and thus, the purpose of this litigation is to provide a definition of the term, so that the corresponding statutory sections governing “scheduled airlines” can be properly applied. ¶9 To accomplish this task, Alpine encourages the Court to examine the lengthy legislative history of aviation-related state statutes, and also argues that “scheduled” has a unique meaning in federal aviation regulatory law that should be considered. Alpine requests that we reverse and remand this matter with instructions to the District Court “to issue an interlocutory adjudicatory ruling that Alpine is not a scheduled airline.” The DOR responds that the plain meaning of the statutes should control and that “Alpine impermissibly attempts to bring questions of fact into this interlocutory adjudication.” It asks that we affirm the District Court’s interpretation of the statute. ¶10 We agree with DOR’s general approach to this matter. As noted above, this is an interlocutory appeal that does not permit determination of questions of fact. Section 15-2-305, MCA. There is no factual record before us and we cannot here determine Alpine’s status as a scheduled airline company or its ultimate status as a centrally assessed company. The only issue properly before us is the legal question of the statute’s interpretation, and we begin with its plain wording. 5 ¶11 “In the construction of a statute, the office of the judge is simply to ascertain and declare what is in terms or in substance contained therein, not to insert what has been omitted or to omit what has been inserted.” Section 1-2-101, MCA. “In the construction of a statute, the intention of the legislature is to be pursued, if possible.” Section 1-2-102, MCA. “[L]egislative intent is to be ascertained, in the first instance, from the plain meaning of the words used” by the legislature. W. Energy Co. v. Dep’t of Revenue, 1999 MT 289, ¶ 11, 297 Mont. 55, 990 P.2d 767. Similarly, “[w]hen the legislature has not defined a statutory term, we consider the term to have its plain and ordinary meaning.” Giacomelli v. Scottsdale Ins. Co., 2009 MT 418, ¶ 18, 354 Mont. 15, 221 P.3d 666; accord Bates v. Neva, 2014 MT 336, ¶ 15, 377 Mont. 350, 339 P.3d 1265. ¶12 As such, statutory interpretation begins with an examination of the plain language of the statute itself, Smith v. Burlington N. & Santa Fe Ry., 2008 MT 225, ¶ 22, 344 Mont. 278, 187 P.3d 639, and dictionary definitions may be considered, Mont. Dep’t of Revenue v. Priceline.com, Inc., 2015 MT 241, ¶ 10, 380 Mont. 352, 354 P.3d 631; Giacomelli, ¶ 18; AP v. Mont. Senate Republican Caucus, 286 Mont. 172, 179, 951 P.2d 65, 69 (1997); In re Irvine’s Estate, 114 Mont. 577, 580, 139 P.2d 489, 489–90 (1943). ¶13 Dictionary definitions of the operative words “regularly” and “scheduled” produce common sense renderings. “Regular” means “steady or uniform in course, practice, or occurrence,” “not subject to unexplained or irrational variation,” “returning, recurring, or received at stated, fixed, or uniform intervals.” Webster’s Third New International Dictionary 1913 (Philip Babcock Gove ed., 16th ed. 1971) [hereinafter Webster’s Third]. 6 Similarly, “regularly” means “in a regular, orderly, lawful, or methodical way.” Webster’s Third, supra, 1913. “Schedule” is “a written or printed formal list,” “a transportation timetable,” or a “written plan or proposal for future procedure typically indicating the objective proposed, the time and sequence of each operation, and the materials required.” Webster’s Third, supra, 2028. ¶14 These terms, combined with the statute as a whole, demonstrate that a “regularly scheduled flight” occurs on a uniform or unvarying, and reoccurring, basis as preset by an airline and offered for hire to the public. See § 15-23-401(1), MCA (defining “air commerce” as offering air transportation “for hire”); § 15-23-401(8), MCA (defining “scheduled airline company” as engaging in “the business” of air commerce). One key concept here is who sets the flight schedule. An airline arranges a regularly scheduled flight; the customer does not. ¶15 The District Court’s definition of “regularly scheduled flight” was satisfactory with the exception of its use of the phrase “patterned but not necessarily uniform,” which potentially incorporates a notion of irregularly arranged flights that would be inconsistent with the Legislature’s “regularly scheduled” wording, because a pattern can be an irregular one. See, e.g., Trinity Am. Corp. v. EPA, 150 F.3d 389, 393 (4th Cir. 1998) (contaminated groundwater testing produced “an ‘irregular pattern’ of both low and high levels of contaminants at different times”); B B & L, Inc. v. NLRB, 52 F.3d 366, 370 (D.C. Cir. 1995) (employees working an “irregular pattern” of hours nonetheless had a “reasonable expectancy of further employment”); Maker’s Mark Distillery, Inc. v. 7 Diageo N. Am., 679 F.3d 410, 417 (6th Cir. 2012) (trademark registered for the “irregular pattern” of the wax-like trade dress sealing bottles of Maker’s Mark bourbon); Thornton v. U.S. Dep’t of Agric., 715 F.2d 1508, 1510 (11th Cir. 1983) (“irregular patterns” of heat emissions from horse’s forelegs suggested inflammation characteristic of soring). Thus, making the small revision of removing this phrase, we affirm the remainder of the District Court’s definition of “regularly scheduled flights” as “those which follow an interval according to timetables and locations predefined by the carrier and which fly regardless of whether there are passengers or freight to be carried.”2 ¶16 Affirmed in part and reversed in part. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ LAURIE McKINNON 2 Although not binding on this Court, this interpretation is consistent with the common usage of the phrase “regularly scheduled flight” in various legal contexts. See, e.g., Burbank v. Lockheed Air Terminal, Inc., 411 U.S. 624, 626, 93 S. Ct. 1854, 1856 (1973) (“The only regularly scheduled flight affected by the ordinance was an intrastate flight of Pacific Southwest Airlines originating in Oakland, California, and departing from Hollywood-Burbank Airport for San Diego every Sunday night at 11:30.” (emphasis added)); Air Line Pilots Ass’n Int’l v. Fed. Aviation Admin., 454 F.2d 1052, 1053 (D.C. Cir. 1971) (“Two Mohawk pilots, on separate occasions, were disciplined (by 15-day suspensions) for refusing to fly a regularly scheduled flight.” (emphasis added)); Koirala v. Thai Airways Int’l, 126 F.3d 1205, 1207 (9th Cir. 1997) (“Flight TG-311 was a regularly scheduled flight from Bangkok, Thailand to Kathmandu, Nepal.” (emphasis added)).

November 9, 2016

2d0486a5-c4d9-498d-9de6-59c0d6dc7a93

West v. United Services Automobile Ass’n

2016 MT 285

DA 16-0097

Montana

Montana Supreme Court

DA 16-0097 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 285 ELIZABETH WEST, as Guardian Ad Litem for PETER LEE, Plaintiff and Appellee, v. UNITED SERVICES AUTOMOBILE ASSOCIATION (USAA), an Unincorporated Reciprocal Inter-Insurance Exchange, and USAA CASUALTY INSURANCE COMPANY, Defendants and Appellants. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADV-15-075 Honorable Gregory Pinski, Presiding Judge COUNSEL OF RECORD: For Appellants: David M. McLean (argued), Ryan C. Willmore, McLean & Associates, PLLC, Missoula, Montana For Appellee: Alexander (Zander) Blewett, III, Anders Blewett (argued), Hoyt & Blewett PLLC, Great Falls, Montana Argued and Submitted: September 28, 2016 Decided: November 9, 2016 Filed: __________________________________________ Clerk 11/09/2016 Case Number: DA 16-0097 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Elizabeth West, acting as Guardian Ad Litem for Peter Lee, and United Services Automobile Association and USAA Casualty Insurance Company (collectively USAA) dispute the effect of TRICARE medical payment liens on USAA’s responsibility to promptly pay Lee’s liability settlement claim against its insured. Lee asserted that USAA acted in bad faith by conditioning payment on resolving the TRICARE liens. The Eighth Judicial District Court agreed and held USAA liable for its insured’s $1,464,000 consent judgment. ¶2 We conclude that USAA had a reasonable basis in law to condition its payment of policy limits upon resolution of the TRICARE liens, and we therefore reverse. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In December 2012, Lee and three other passengers were injured in a single vehicle accident. Lee sustained catastrophic injuries. The driver, Julian Perez, held a USAA insurance policy. All of the passengers were military servicemen covered by TRICARE, a government insurance program for military members and their families. TRICARE paid medical benefits for the passengers and therefore had a statutory right to recover the benefits it paid. TRICARE’s liens for the passengers’ combined medical expenses totaled over $215,000; more than $204,000 of the total were for Lee’s expenses alone. ¶4 USAA insured Perez under an automobile liability policy with coverage limits of $50,000 per person and $100,000 per accident. After conducting a liability investigation, USAA determined that Perez was 100% at fault for the accident. Because of the extent 3 of Lee’s injuries, USAA informed Perez that he may be potentially liable for damages exceeding his coverage limits. ¶5 On August 21, 2013, Lee’s counsel—who represented all four injured passengers—made a settlement demand on USAA for Perez’s $100,000 policy limits. The letter stated that the offer would be withdrawn and that the claimants would seek to recover all of their damages from USAA if USAA did not agree to pay the policy limits in twenty days. One week later, USAA’s claims examiner contacted Lee’s counsel and offered to pay the full policy limits, provided that the TRICARE liens were addressed. Lee’s counsel immediately responded with a letter stating that his clients would indemnify and hold USAA harmless from any responsibility for the TRICARE liens. ¶6 On September 9, 2013, USAA responded, stating that the offer to indemnify was not sufficient to protect Perez or USAA from the TRICARE liens. USAA confirmed in writing its offer to pay the policy limits, provided either that TRICARE be included as a payee on the settlement check or that Lee’s counsel first secure lien releases from TRICARE. Lee’s counsel followed with a letter two days later, stating that his clients would indemnify both USAA and Perez from any responsibility for the TRICARE liens. The letter gave USAA a deadline of September 21. USAA did not respond by the deadline. In the meantime, both USAA and Lee’s counsel attempted to determine the status of TRICARE’s liens. In early November 2013, USAA received letters from the Air Force providing notice of its claims and requesting payment of the liens pursuant to 4 42 U.S.C. § 2651. TRICARE finally agreed to waive its liens at the end of January 2014, and USAA issued a check for the policy limits of $100,000 six weeks later. ¶7 Lee had filed suit against Perez in October 2013, and he continued his suit after receiving the policy limits payment from USAA. In January 2015, Perez agreed to a consent judgment in the amount of $1,464,000, and assigned his claims against USAA to Lee. On behalf of Lee, West filed a separate suit that same month alleging bad faith against USAA. The District Court granted West summary judgment, concluding that USAA did not have a reasonable basis in law for conditioning payment of the settlement check. The court held therefore that USAA was liable to Lee for the consent judgment. USAA filed a motion to alter or amend the judgment that was deemed denied when the District Court did not rule. USAA appeals. STANDARD OF REVIEW ¶8 We review summary judgment rulings de novo, applying the standards set forth in M. R. Civ. P. 56(c)(3). Citizens for a Better Flathead v. Bd. of Cnty. Comm’rs, 2016 MT 256, ¶ 10, 385 Mont. 156, ___ P.3d ___; accord State Farm Mut. Auto. Ins. Co. v. Freyer, 2013 MT 301, ¶ 22, 372 Mont. 191, 312 P.3d 403. Generally, questions of reasonableness are factual matters properly answered by the finder of fact. Estate of Gleason v. Cent. United Life Ins. Co., 2015 MT 140, ¶ 60, 379 Mont. 219, 350 P.3d 349; Freyer, ¶ 48. But an insurer’s reasonableness is a question of law for the court to decide 5 when the insurer’s basis in law is grounded on a legal conclusion and no issues of fact remain in dispute.1 Estate of Gleason, ¶ 60; Freyer, ¶ 48. DISCUSSION ¶9 Whether the District Court correctly concluded that USAA did not have a reasonable basis in law for conditioning the settlement check upon resolution of the TRICARE liens. ¶10 Because insurers have the authority under their policies to settle third-party claims, insurers in Montana have a duty to accept reasonable settlement offers within the policy limits. Freyer, ¶ 46. When an insurer acts in bad faith and “fails to settle a bona fide third party liability claim against its insured, within policy coverage limits,” that insurer “takes the risk of a judgment by the trier of fact in excess of the coverage limits.” Freyer, ¶ 47 (citation and internal quotations omitted). An insurer does not act in bad faith, however, and therefore is not liable, “for failing to settle within policy limits when it had a reasonable basis in law or fact for contesting coverage.” Freyer, ¶ 47. In determining whether an insurer has a reasonable basis in law for contesting coverage, “it is first necessary to survey the legal landscape as it existed during the relevant time period.” Freyer, ¶ 48 (citation and internal quotations omitted). The “determinative question” in our inquiry “is whether the law in effect at the time, caselaw or statutory, provided sufficient guidance to signal to a reasonable insurer that its grounds for denying the claim were not meritorious.” Freyer, ¶ 48. We are not to ask whether we agree “with the plaintiff’s theories of liability in the underlying suit but, rather, whether the insurer’s 1 Throughout the case, West has contended that no fact issues exist and that the case presents only questions of law. During oral argument before this Court, counsel for USAA agreed. 6 grounds for contesting those theories were reasonable under existing law.” Freyer, ¶ 48 (citation and internal quotations omitted). ¶11 Soon after filing her complaint in this action, West moved for summary judgment. She argued that USAA acted in bad faith by failing to promptly settle the claim. USAA responded, arguing on the authority of Freyer that it had a reasonable basis in law to condition payment of the settlement upon resolution of the TRICARE liens. USAA contended that federal law—specifically 42 U.S.C. § 2651—and our decision in Conway v. Benefis Health Systems, Inc., 2013 MT 73, 369 Mont. 309, 297 P.3d 1200, established TRICARE as a secondary payer and obligated USAA either to include TRICARE as a co-payee or to secure a waiver of the liens before making payment to West. Despite Justice Cotter’s assertion to the contrary, Dissent, ¶ 30, USAA has asserted throughout litigation that the principal issue is whether its grounds for conditioning the settlement payment were reasonable under existing law because TRICARE is a secondary payer. ¶12 The District Court recognized as much, identifying the issue before it as follows: “Did USAA engage in bad faith settlement practices by refusing to pay an admitted liability settlement unless TRICARE was named as a co-payee on Lee’s settlement check or TRICARE waived its statutory lien?” The court ruled that USAA lacked a reasonable basis in law to delay payment of policy limits because of the TRICARE liens. The court focused its analysis on USAA’s condition to include TRICARE as a payee on the settlement check. The court first noted that the parties had not identified any cases “addressing this narrow issue.” It rejected USAA’s reliance on Conway, finding the case 7 not directly on point. The court similarly rejected USAA’s comparison of TRICARE to Medicare because it concluded that Medicare and TRICARE statutes and regulations are distinct. Specifically, the court noted that “unlike the automatic first payer liability imposed . . . on Medicare, there is no corresponding provision under TRICARE.” Finally, the court rejected USAA’s reliance on 42 U.S.C. § 2651, which governs the United States’ right to recover incurred medical costs from liable third parties and their insurers. ¶13 The court determined that the federal statute would apply only if the United States had commenced litigation or intervened to enforce its liens; in that case, “USAA would have a compelling argument it properly included TRICARE on the settlement check.” The court also determined that although TRICARE sent USAA notice of its claim and requested payment of the liens, “there is no obligation in the TRICARE regulations requiring USAA to protect the government lien.” “Most pertinently,” the court specified, “there is no requirement that USAA name TRICARE on Lee’s settlement check.” As such, the court concluded that “USAA’s unilateral decision [to include TRICARE as a payee on the settlement check] is without support in statute, regulation, or common law.” ¶14 Further, the court noted that Lee expressly agreed to indemnify USAA, but that “USAA made the unilateral decision to condition its legal obligation to settle Lee’s claims on including TRICARE as a settlement check payee.” Such a condition, the District Court concluded, went against Montana’s public policy regarding settlement of insurance claims. The court emphasized, “When an insurer unilaterally adds a payee to a 8 claimant’s settlement check, the insurer substantially delays settlement, imposes onerous obligations not required by law, and creates unreasonable burdens on a claimant to receive funds the insurer is legally obligated to pay.” Such a result, the court concluded, “is hardly what the Montana legislature intended when it obligated insurers to ‘attempt in good faith to effectuate prompt, fair, and equitable settlements of claims in which liability has become reasonably clear.’” (Quoting § 33-18-201(6), MCA.) The court therefore held that “USAA’s decision to condition payment on naming TRICARE as a payee of the settlement funds is unreasonable under applicable law.” As a result, the District Court ordered USAA to pay the entire consent judgment. ¶15 First, the District Court correctly recognized that “a TRICARE lien arises under the Medical Care Recovery Act, 42 U.S.C. § 2651(a).” The Air Force’s November 2013 letters to USAA referenced this section in asserting the United States’ “independent right to recover costs.” But the court incorrectly interpreted the statute. The statute broadly provides that, whenever the United States furnishes benefits to a beneficiary who is injured under circumstances creating a tort liability upon some third person . . . to pay damages therefor, the United States shall have a right to recover (independent of the rights of the injured or diseased person) from said third person, or that person’s insurer, the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for and shall, as to this right be subrogated to any right or claim that the injured [beneficiary] . . . has against such third person. 42 U.S.C. § 2651(a). By bestowing upon the United States a right to recover from Perez or USAA, 42 U.S.C. § 2651(a) obligated Perez or USAA to honor the TRICARE liens. 9 The same statute allows the United States to enforce its right to recover by “interven[ing]” in or “institut[ing] and prosecut[ing] legal proceedings against the third person who is liable for the injury . . . or the insurance carrier . . . responsible for the payment or reimbursement of medical expenses.” 42 U.S.C. § 2651(d). Contrary to the District Court’s conclusion, USAA’s obligation to honor the liens under § 2651(a) did not depend upon the United States already having pursued judicial enforcement under § 2651(d). ¶16 Second, we disagree with the District Court that Conway offers no guidance here. We concluded in Conway that “federal regulations mandate that TRICARE functions as a secondary payer.” Conway, ¶ 32 (citing 32 C.F.R. § 199.8(a)). TRICARE’s status as a secondary payer means that “where the medical treatment at issue is necessitated as a result of the negligence of an insured third party, any payment originally made by TRICARE must be reimbursed.” Conway, ¶ 32 (citing 32 C.F.R. § 199.8(a), (b)(3)) (emphasis added). TRICARE benefits therefore are not “available to a TRICARE beneficiary where there is third party insurance available to pay the expenses of medical treatment.” Conway, ¶ 32. Conway supports USAA’s contention that it had an obligation to reimburse TRICARE given TRICARE’s status as a secondary payer. 10 ¶17 Third, our conclusion finds additional support in other TRICARE statutes and regulations in effect at the time.2 The federal statute governing contractor payment of certain claims under TRICARE provides: (a) Payment of claims. (1) The Secretary of Defense may authorize a contractor under the TRICARE program to pay a claim described in paragraph (2) before seeking to recover from a third-party payer the costs incurred by the contractor to provide health care services that are the basis of the claim to a beneficiary under such program. (2) A claim under this paragraph is a claim -- (A) that is submitted to the contractor by a provider under the TRICARE program for payment for services for health care provided to a covered beneficiary; and (B) that is identified by the contractor as a claim for which a third- party payer may be liable. (b) Recovery from third-party payers. The United States shall have the same right to collect charges related to claims described in subsection (a) as charges for claims under [10 U.S.C. § 1095]. (c) Definition of Third-Party Payer. In this section, the term “third-party payer” has the meaning given that term in [10 U.S.C. § 1095(h)], except that such term excludes primary medical insurers. 2 We are unpersuaded by West’s argument that we cannot consider statutes and regulations that were not cited by USAA in its briefing on summary judgment. Although we generally do not address an issue raised for the first time on appeal or a party’s change in legal theory, “we have permitted parties to bolster their preserved issues with additional legal authority or to make further arguments within the scope of the legal theory articulated to the trial court.” State v. Montgomery, 2010 MT 193, ¶ 12, 357 Mont. 348, 239 P.3d 929. TRICARE’s lien rights and USAA’s corresponding obligations were the focus of the legal theory that USAA presented to the trial court. And the District Court is not confined in its summary judgment review—nor is this Court on appeal—to authorities presented in the parties’ briefs. See Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn, Uithoven, Riekenberg, P.C., 2016 MT 218, ¶ 22, 384 Mont. 464, ___ P.3d ___. Besides, as explained above, the District Court erred in its analysis of the legal authority that USAA did present. 11 10 U.S.C. § 1095b. Federal regulations confirm that “10 U.S.C. [§]1095b establishes the statutory obligation of third-party payers to reimburse the United States the costs incurred on behalf of TRICARE beneficiaries who are also covered by the third-party payer’s plan.” 32 C.F.R. § 199.12(a). ¶18 In turn, 10 U.S.C. § 1095 provides that “the United States shall have the right to collect from a third-party payer reasonable charges for health care services incurred by the United States on behalf of [a person who is a covered beneficiary].” 10 U.S.C. § 1095(a)(1); accord 42 U.S.C. § 2651(a). Section 1095 defines a “third-party payer” as “an entity that provides an insurance, medical service, or health plan by contract or agreement, including an automobile liability insurance or no fault insurance carrier.” 10 U.S.C. § 1095(h)(1). USAA is clearly a “third-party payer” pursuant to both 10 U.S.C. § 1095b(c) and 10 U.S.C. § 1095(h)(1). These statutes make clear that the United States had “the right to collect from [USAA] reasonable charges for health care services incurred by the United States on behalf of [Lee].” 10 U.S.C. § 1095(a)(1); accord 10 U.S.C. § 1095b(b); 42 U.S.C. § 2651(a). ¶19 More, the federal TRICARE regulations provide: “The only way for a third-party payer to satisfy its obligation under 10 U.S.C. [§]1095b is to pay the United States or authorized representative of the United States. Payment by a third-party payer to the beneficiary does not satisfy 10 U.S.C. [§]1095b.” 32 C.F.R. § 199.12(d)(3). The United States’ right to recover costs incurred on behalf of a TRICARE beneficiary “includes the authority under 10 U.S.C. [§]1095(e)(1) for the United States to institute and prosecute 12 legal proceedings against a third-party payer to enforce a right of the United States under 10 U.S.C. [§]1095b and this section.” 32 C.F.R. § 199.12(g)(1). The United States may also “compromise, settle or waive a claim” of its right to reimbursement. 32 C.F.R. § 199.12(g)(2); 10 U.S.C. § 1095(e)(2). ¶20 These statutes and regulations, “in effect at the time” of USAA’s negotiations with Lee’s counsel, Freyer, ¶ 48, obligated USAA to reimburse TRICARE for the costs TRICARE incurred on behalf of Lee. So USAA issuing a settlement check to Lee would “not satisfy” its statutory obligation. 32 C.F.R. § 199.12(d)(3). Rather, the only way USAA could meet its obligation to reimburse TRICARE was “to pay the United States or authorized representative of the United States.” 32 C.F.R. § 199.12(d)(3). If USAA did not satisfy its statutory obligation, the United States could “institute and prosecute legal proceedings against” USAA to enforce its right to reimbursement. 32 C.F.R. § 199.12(g)(1); 10 U.S.C. § 1095(e)(1); 42 U.S.C. § 2651(d). Based on the plain language of the governing statutes and regulations, we conclude that the District Court incorrectly determined that “there is no obligation in the TRICARE regulations requiring USAA to protect the government lien.” ¶21 Justice Cotter takes issue with our reliance on these statutes and regulations because they were not presented to the District Court, nor to West at the time USAA responded to her demand for policy limits. Dissent, ¶¶ 31, 34. USAA’s failure to cite specific statutes and regulations does not mean that those requirements were not part of the “legal landscape as it existed” when USAA conditioned payment of the settlement 13 check upon resolution of the TRICARE liens. Freyer, ¶ 48. Our role is to assess objectively whether it was reasonable for USAA to condition payment—i.e., its “proffered defense”—“in light of that legal landscape.” Freyer, ¶ 48 (emphasis added). West’s argument, in any event, is that because Lee made an offer to indemnify USAA and Perez, the law did not obligate USAA to address the TRICARE liens before settling Lee’s third-party claim, a position that Justice Cotter does not appear to embrace. ¶22 Contrary to West’s argument, neither Lee’s offer to indemnify nor his obligation pursuant to 32 C.F.R. 199.12(h)(3) to “cooperate” with the United States in any reimbursement action by the United States against USAA affects USAA’s statutory obligation to reimburse TRICARE, nor do they impact the United States’ right to recover medical payments from USAA. Any agreement between Lee’s counsel and USAA would not bind the government or exempt USAA from federal law.3 ¶23 The District Court was correct that “there is no requirement that USAA name TRICARE on Lee’s settlement check.” As the District Court pointed out, if USAA had tendered the settlement check with TRICARE as a payee, the check would not have been negotiable until an authorized government agent endorsed it, and Lee could have been denied the insurance proceeds he was entitled to receive. As the District Court also 3 We note that the State Bar of Montana Ethics Committee recently issued an ethics opinion concluding that an attorney should not agree in a settlement release to personally indemnify an insurer from any lien claims against the settlement proceeds for a plaintiff’s medical expenses. M. Bar Ass’n, Ethics Op. 131224 (2013). The opinion notes that “[t]his practice presents a number of professional responsibility challenges” and potentially violates multiple rules under the Montana Rules of Professional Conduct. M. Bar Ass’n, Ethics Op. 131224, at 3-7. Because our resolution of the appeal does not turn on the issue of indemnification, we do not discuss the ethics opinion here. 14 observed, Lee’s attorney could not have deposited “the check in his . . . IOLTA account until fully endorsed, making it impossible to comply with the Montana Rules of Professional Conduct.” ¶24 As the District Court’s order recognized, USAA did not, however, just condition payment of Lee’s settlement on including TRICARE as a payee on the check—it also gave Lee’s counsel the option of “obtain[ing] waivers of any lien or negotiat[ing] the liens.” USAA also followed up with the government to determine the status of the liens. Federal law expressly provides that the United States may “compromise, settle or waive a claim” of its right to reimbursement. 32 C.F.R. § 199.12(g)(2); 10 U.S.C. § 1095(e)(2). The District Court erred in not considering USAA’s request for lien waiver before concluding that USAA did not have a reasonable basis in law to condition payment of the settlement. ¶25 Justice Wheat also misses the import of USAA’s alternative offers for resolving the TRICARE liens. In remarking that USAA “had no lawful basis to refuse to settle Lee’s claim based upon the status of TRICARE’s lien,” Dissent, ¶ 40, Justice Wheat quotes only from the District Court’s observation regarding USAA’s offer to include TRICARE as a settlement check payee. See supra ¶¶ 13-14. His conclusion that “USAA had no legal obligation to protect TRICARE’s lien,” Dissent, ¶ 40, fails to acknowledge the governing law. ¶26 The District Court properly invoked Freyer as the correct framework for analysis. Applying that framework to determine whether USAA had a reasonable basis in law for 15 contesting Lee’s claim, we have “survey[ed] the legal landscape as it existed during the relevant time.” Freyer, ¶ 48 (emphasis added). That landscape compels a conclusion that USAA did have a reasonable basis in law to condition its settlement payment on waiver of the TRICARE lien from the United States. The “only way” for USAA to satisfy its statutory obligation to TRICARE—the secondary payer—was to pay the United States, not to pay Lee. 32 C.F.R. § 199.12(d)(3); see Conway, ¶ 32. If USAA had not honored the lien, the United States presumably still could have gone after USAA to enforce its right to reimbursement. 32 C.F.R. § 199.12(g)(1); 10 U.S.C. § 1095(e)(1); 42 U.S.C. § 2651(d). The law “provided sufficient guidance to signal to a reasonable insurer that its grounds . . . were . . . meritorious.” Freyer, ¶ 48. This is especially so given “the absence of caselaw on point.” See Freyer, ¶ 48. Accordingly, we hold that USAA’s “grounds [for conditioning payment] were reasonable under existing law.” Freyer, ¶ 48. ¶27 Although USAA did not move for summary judgment before the District Court, “[w]e require no cross-motion . . . when the moving party had a full and fair opportunity to consider the proposition and all other criteria for summary judgment are met.” Watson v. Dundas, 2006 MT 104, ¶ 30, 322 Mont. 164, 136 P.3d 973 (citing Canal Ins. Co. v. Bunday, 249 Mont. 100, 108, 813 P.2d 974, 979 (1991)). West had a full and fair opportunity to argue the law applicable to her bad faith claim, there are no genuine issues of material fact, and USAA is entitled to judgment as a matter of law. We therefore reverse the District Court’s grant of summary judgment in favor of West and order it to 16 enter summary judgment in favor of USAA. See Bunday, 249 Mont. at 108, 813 P.2d at 979. CONCLUSION ¶28 The District Court’s order granting summary judgment to West is reversed and the case is remanded to the District Court for entry of judgment in favor of USAA. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE Justice Patricia Cotter, dissenting. ¶29 I dissent. I begin by reciting significant facts that the Court has omitted from its Opinion. First, USAA consented to Perez entering and filing the consent judgment, and had no objection to the amount of the judgment which does represent actual damages sustained by Lee. In addition, USAA agreed not to raise any policy defenses to preclude Perez from filing the consent judgment. There is therefore no issue of collusion or unreasonableness of the settlement amount before us. ¶30 Second, USAA’s legal theories have been a moving target from the beginning. As addressed below, the legal authorities it relied upon when dealing with West and then presented to the District Court were different than those raised on appeal and upon which the Court now relies. In addition, after arguing in its opening brief before this Court that it was required to 17 include TRICARE on the settlement check, USAA asserted in its reply brief that it was not required to include TRICARE as a payee on the settlement check. In short, USAA’s legal arguments have been scattershot. These inconsistencies matter because the sole question before the Court is whether USAA had reasonable grounds under the law at the time it imposed the conditions at issue upon the settlement with West. ¶31 In a footnote on ¶ 17, n. 2, the Court rejects West’s argument that we should not consider statutes and regulations that were not cited by USAA in its briefing on summary judgment in the District Court, citing our decision in Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn for the proposition that we are not confined on appeal to authorities that were presented in the parties’ briefs. While that general proposition may be true, it is wholly misplaced in this case because, as the Court states at ¶ 10, the focal question here is whether the insurer’s grounds for contesting plaintiff’s theories were reasonable under existing law at the time it imposed the conditions at issue on the settlement. We must therefore “assess the insurer’s proffered defense” that was presented to West in 2013. Freyer, ¶ 48. ¶32 When it refused to pay the settlement without TRICARE’s name on the check or lien waivers in 2013, USAA did not “proffer a defense” to West premised on 10 U.S.C. § 1095 or TRICARE regulation 32 C.F.R. § 199 and its various sub-parts upon which this Court centers its decision. The statute and the regulations were never mentioned to West, and USAA did not cite these statutes and regulations as authority in its briefing before the District Court. These facts compel the inevitable conclusion that USAA did not at the time it conditioned the settlement have reasonable legal grounds under existing law for contesting plaintiff’s theories. Freyer, ¶ 48. 18 ¶33 The Court places much emphasis upon USAA’s reference to 42 U.S.C. § 2651 in its dealings with West and its brief opposing summary judgment before the District Court. 42 U.S.C. § 2651 is a general public health and welfare statute that permits the United States to recover sums paid to persons injured in cases where the injury is the responsibility of a third- party. This statute does not reference TRICARE nor does it contain any provision requiring insurance companies to protect government liens. It is 10 U.S.C. § 1095 that addresses medical expenses paid on behalf of members of the military. As 32 C.F.R. § 199.12(a)(1) states, “10 U.S.C. [§] 1095b establishes the statutory obligation of third-party payers to reimburse the United States the costs incurred on behalf of TRICARE beneficiaries.” In point of fact, the Court grounds its detailed analysis upon this statute and the supporting regulations set forth in 32 C.F.R. § 199, and not upon 42 U.S.C. § 2651. See Opinion, ¶¶ 17-20, 22, 24, 26. ¶34 After extensive review of 10 U.S.C. § 1095 and 32 C.F.R. § 199 and its subparts, the Court states at ¶ 20: “Based on the plain language of the governing statutes and regulations, we conclude that the District Court incorrectly determined that ‘there is no obligation in the TRICARE regulations requiring USAA to protect the government lien.’” The problem with this conclusion of course is that USAA did not present these statutes and regulations to the District Court for its consideration. The District Court rightly premised its decision upon the authorities submitted by the parties; it was under no obligation to scour the legal landscape to assist USAA. As we have stated, we will generally “‘not address either an issue raised for the first time on appeal or a party’s change in legal theory. The basis for the general rule is that it is fundamentally unfair to fault the trial court for failing to rule correctly on an issue it was never given the opportunity to consider.’” Becker v. Rosebud Operating Servs., Inc., 2008 MT 285, 19 ¶ 17, 345 Mont. 368, 191 P.3d 435 (quoting Unified Industries, Inc. v. Easley, 1998 MT 145, ¶ 15, 289 Mont. 255, 961 P.2d 100 (internal citations and quotations omitted)). ¶35 I disagree with the Court’s conclusion at ¶¶ 17 and 21 that because the TRICARE statutes and regulations were part of the existing legal landscape at the time the settlement was in dispute, USAA had a reasonable basis in law to condition the settlement upon resolution of the TRICARE liens. Respectfully, USAA did not know these TRICARE regulations and statute existed when it conditioned the settlement. It stands to reason that in order to have a reasonable basis in law for a position, one must know what the law is. ¶36 We err in supplying legal authority for USAA’s defense long after the fact. In a case in which the intent and knowledge of the insurer at the time it conditioned the settlement is dispositive, we have no business providing retroactive support for a decision USAA made three years ago without citing the governing law, and no business providing USAA with a lifeline now premised upon legal authorities it did not present to the District Court. Given the sparse legal authority USAA provided to the District Court in opposition to West’s motion for summary judgment, the District Court did not err in granting summary judgment in favor of West. That is the decision we should be reviewing, not USAA’s decision to present new legal authorities on appeal. I therefore dissent from our decision overturning the District Court’s order and directing the entry of judgment in favor of USAA. /S/ PATRICIA COTTER Justice Michael E Wheat joins in the foregoing dissent. /S/ MICHAEL E WHEAT 20 Justice Michael E Wheat, dissenting. ¶37 I join the Dissent of Justice Cotter, but provide additional reasons for separating myself from the reasoning of the majority. ¶38 On December 1, 2012, Peter Lee and three others were injured when Julian Perez, the driver of the car in which they were passengers, caused a high-speed rollover collision. Lee’s injuries were particularly catastrophic. Perez was insured by USAA. Importantly, by mid-December USAA knew without question that Perez’s negligence caused the crash and was absolutely liable for all damages to the injured parties, which would probably exceed policy limits given the extent of the injuries to the parties. More importantly, by this time USAA also knew, or should have known, that TRICARE would be paying some or all of the medical expenses of the injured parties, especially Lee, and would have a subrogation interest in the policy proceeds. ¶39 On June 4, 2013, the Blewett firm notified USAA that they were representing Lee and that policy limits would be inadequate. On August 21, 2013, Blewett offered to settle for policy limits, in exchange for a full release, and placed a 20-day trigger on the offer. On August 28, 2013, USAA agreed by phone to pay, but only if TRICARE was named as a payee or a lien waiver was produced. On September 9, 2013, USAA confirmed its position in writing, and several days later Blewett extended the deadline for settlement and again reiterated a full and final release would be provided to Perez. On October 17, 2013, Lee filed suit against Perez, and shortly thereafter Perez, with the assistance of counsel, entered into a consent judgment with Lee to protect himself from an excess 21 judgment. On March 14, 2014, USAA paid policy limits after Lee provided a TRICARE lien waiver. ¶40 Therefore, by mid-December 2012, USAA knew it was statutorily obligated “to attempt in good faith to effectuate prompt, fair, and equitable settlement” of all claims covered by Perez’s policy. Section 33-18-201(6), MCA. At the same time USAA had a duty to defend and protect Perez against any claims and/or judgments resulting from his clear negligence. Additionally, and simultaneously, USAA apparently believed, for its own protection, it was required to protect TRICARE’s subrogation interest. This last conclusion, however, was incorrect. As noted by the Alabama Supreme Court in Mut. Assur., Inc. v. Schulte, 970 So. 2d 292 (Ala. 2007), “the inquiry relevant to a claim alleging bad faith failure to settle is whether the insurer’s failure to settle had any ‘lawful basis,’ that is, whether the insurer had any ‘legitimate or arguable reason for failing to pay the claim.’” Schulte, 970 So. 2nd at 296 (citations omitted). In the case before us, the District Court, based upon the arguments presented to it as discussed in Justice Cotter’s Dissent, concluded that USAA’s “unilateral decision” to protect TRICARE’s lien, was “without support in statute, regulation, or common law.” In other words, USAA had no legal obligation to protect TRICARE’s lien; consequently, it had no lawful basis to refuse to settle Lee’s claim based upon the status of TRICARE’s lien. ¶41 Moreover, if TRICARE’s lien status posed significant problems to USAA’s settlement determination, upon USAA’s realization of its obligation to settle Perez’s claim, it should have undertaken actions in December 2012 to insure that TRICARE’s 22 subrogation interest would not hinder settlement rather than delaying settlement and imposing the obligation to obtain a TRICARE lien waiver on Lee. ¶42 Under these facts, I submit that USAA violated its obligations to its insured and to the injured parties to exercise good faith to enter into a prompt, fair and equitable settlement. Instead, it delayed until a demand was made and then unilaterally imposed a requirement that TRICARE be named as a co-payee or that Lee obtain a lien release, equally for its own benefit and protection, even though Lee’s attorneys offered to fully release and indemnify both USAA and Perez. At the expense of Perez and Lee, USAA demanded that Lee’s attorneys agree to protect USAA, when USAA did nothing to protect itself, and was obligated to do so. ¶43 For these reasons and the reasons expressed by Justice Cotter, I dissent. /S/ MICHAEL E WHEAT

November 9, 2016

c6b160ad-3d93-44d2-938a-7c2811338284

State v. J. Johnson

2016 MT 276N

DA 15-0630

Montana

Montana Supreme Court

DA 15-0630 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 276N STATE OF MONTANA, Plaintiff and Appellee, v. JOSHUA JOSEPH JOHNSON, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDC 2014-197 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad M. Wright, Chief Appellate Defender, Alexander H. Pyle, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Jeff Sealey, Deputy County Attorney, Helena, Montana Submitted on Briefs: September 28, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 15-0630 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 In April 2014, Johnson was charged with felony driving under the influence of alcohol or drugs (DUI). He posted bond and was released three days later subject to certain conditions and restrictions. In July 2014, the First Judicial District Court revoked bond and issued a warrant for Johnson’s arrest based upon his failure to comply with the terms of his earlier release. In August 2014, Johnson and his counsel appeared before the court for an omnibus hearing. In October 2014, Johnson changed his plea and entered a guilty plea to felony DUI. Sentencing was set for December 11, 2014. Inexplicably, the arrest warrant issued in July 2014 was not served on Johnson until November 5, 2014. Following service of the warrant, Johnson was incarcerated in the Lewis and Clark County Jail from November 5 through November 14, 2014. A bond hearing was conducted and the court set Johnson’s bond at $10,000 but subsequently released Johnson on his own recognizance (OR release). ¶3 On December 3, 2014, Johnson was stopped by the Montana Highway Patrol for speeding. The officer discovered that Johnson was driving without a driver’s license and insurance, and possessed alcohol. On December 9, 2014, the State moved to revoke 3 Johnson’s OR release and an arrest warrant was issued. Johnson failed to appear at his December 11, 2014 sentencing hearing. At the time of the hearing, the December 9 warrant for Johnson’s arrest had not yet been served. ¶4 On December 30, 2014, the District Court was notified that Johnson was incarcerated in Kent, Washington; consequently, his Montana bond was revoked. In April 2015, the District Court received notice that the Helena Police Department had faxed the December warrant to the applicable county jail in Washington and the county jail had served it on Johnson on or around April 15, 2015. Johnson was jailed in Washington from December 21, 2014, until June 29, 2015, when he returned to Montana and was immediately incarcerated. ¶5 On July 2, 2015, the District Court set Johnson’s bond at $100,000. Sentencing was held on August 6, 2015, and Johnson was sentenced to the Department of Corrections for 13 months, followed by a three-year suspended commitment. The District Court granted Johnson 50 days credit for the amount of time he spent in the Lewis and Clark County Jail. Johnson argued at sentencing that under § 46-18-403, MCA (credit for incarceration prior to conviction), he was entitled to credit for 122 days of the 193 days he spent in the Washington jails. He claimed that 71 days were spent serving time for his Washington offenses and 122 days were spent serving time for the Washington offenses while also being held under the Montana warrant. The District Court denied his request for additional credit and Johnson appeals. ¶6 Section 46-18-403(1), MCA, provides: 4 A person incarcerated on a bailable offense against whom a judgment of imprisonment is rendered must be allowed credit for each day of incarceration prior to or after conviction . . . . Additionally, we have interpreted § 46-18-403, MCA, to allow credit for time served “prior to sentencing where the incarceration is directly related to the offense for which the sentence is imposed.” State v. Erickson, 2008 MT 50, ¶ 21, 341 Mont. 426, 177 P.3d 1043 (emphasis in original). ¶7 The record indicates that Johnson was incarcerated in Washington from December 21, 2014, until June 29, 2015. As noted above, the Washington county officers did not serve the Montana warrant on Johnson until April 15, 2015. Therefore, the time spent in the Washington county jails from December 21, 2014, through April 15, 2015, could not have been related to Johnson’s Montana warrant and he is not entitled to credit for these days. However, under § 46-18-403, MCA, and as conceded by the State, Johnson is entitled to credit for the 20 days served in the Stevens County Jail in Washington from April 15, 2015, until May 5, 2015. Johnson does not seek credit for time spent in the Stevens County Jail between May 5, 2015, and June 29, 2015, as he acknowledges that this time was served on his Washington offenses exclusively. ¶8 As Johnson was entitled to credit for the 50 days he served in the Lewis and Clark County jail and for 20 days of the time he served in the Stevens County, Washington jail, we affirm the District Court’s ruling but remand for an amended judgment to include 20 additional days credit toward Johnson’s sentence. ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for noncitable memorandum opinions. In 5 the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s interpretation and application of the law were correct. ¶10 Affirm and remand. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON

October 25, 2016

3e3d9ff0-07f9-4bce-9937-903f1402dc0e

Orcutt v. State

2016 MT 260N

DA 15-0648

Montana

Montana Supreme Court

DA 15-0648 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 260N TRACY K. ORCUTT, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Seventh Judicial District, In and For the County of Dawson, Cause No. DV 15-073 Honorable Richard A. Simonton, Presiding Judge COUNSEL OF RECORD: For Appellant: Tracy K. Orcutt, Self-Represented, Glendive, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Oliva Norlin-Rieger, Dawson County Attorney, Glendive, Montana Submitted on Briefs: August 24, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 15-0648 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by unpublished opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Tracy K. Orcutt, appearing pro se, appeals from an October 2015 order of the Seventh Judicial District Court, Dawson County, denying his second Petition for Post-Conviction Relief. We affirm. ¶3 In 2014, Orcutt pled nolo contendere to two felony drug charges: criminal production or manufacture of dangerous drugs and criminal possession of dangerous drugs with intent to distribute. He did not appeal. On November 3, 2014, Orcutt filed his first petition for post-conviction relief, alleging ineffective assistance of counsel and a myriad of errors within his conviction. The District Court dismissed the petition on November 28, 2014, finding that the record and pleadings in the case showed, conclusively, that Orcutt was not entitled to relief. In October 2015, Orcutt filed his second petition for post-conviction relief, alleging substantially the same grounds for relief and errors in his underlying conviction as he alleged in his first petition, and alleging the existence of newly discovered evidence entitling him to relief. In October 2015, the District Court dismissed Orcutt’s second petition. ¶4 “We review a district court’s denial of a petition for post-conviction relief to determine whether the court’s findings of fact are clearly erroneous and whether its 3 conclusions of law are correct.” Beach v. State, 2009 MT 398, ¶ 14, 353 Mont. 411, 220 P.3d 667. A district court must dismiss “a second or subsequent petition by a person who has filed an original petition unless the second or subsequent petition raises grounds for relief that could not reasonably have been raised in the original or an amended original petition.” Section 46-21-105(1)(b), MCA. ¶5 After reviewing the petition, pleadings, and record in this case, we determine that the grounds for relief upon which Orcutt relies reasonably could have been raised in his first petition for post-conviction relief. In fact, a substantial number of the arguments he now raises were raised in his first petition. Because Orcutt’s arguments in his second petition for post-conviction relief were or could have been raised in his original petition, the District Court did not err in dismissing the petition. ¶6 We note that the District Court stated in its order: “Having considered Orcutt’s Amended Second Petition for Post-Conviction Relief, the relief requested is denied and the Amended Second Petition is dismissed. Orcutt may not file another Petition for Post-Conviction Relief.” While the evidentiary threshold may be heightened for second or subsequent petitions for post-conviction relief, there is nothing in our statutory scheme that categorically bars a petitioner from raising additional claims if adequate grounds for relief should arise in the future. Therefore, we strike the portion of the District Court’s order that precluded Orcutt from filing such a petition. ¶7 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. In the opinion of this Court, this case presents a question controlled by settled law. 4 ¶8 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON

October 11, 2016

bf8a1462-c4ae-4beb-9a4c-c676a4c8faf7

STORY v CITY OF BOZEMAN

N/A

88-504

Montana

Montana Supreme Court

No. 88-504 IN THE SUPREME COURT OF THE STATE OF MONTANA 1990 MARK STORY, d/b/a MARK STORY CONSTRUCTION, Plaintiff and Respondent, CITY OF BOZEMAN, and NEIL MANN, Defendants and Appellants. APPEAL FROM: District Court of the Eighteenth Judicial District, In and for the County of Gallatin, The Honorable Joseph B. Gary, Judge presiding. COUNSEL OF RECORD: For Appellant: Bruce E. Becker, Bozeman, Montana Donald R. Herndon argued, Herndon, Harper and Munro, Bozeman, Montana For Respondent: Gregory 0 . Morgan argued, Bozeman, Montana , Fil ed : C d CLERK OF SU Submitted: October 17, 1989 May 3, 1990 ,* Clerk Chief Justice J. A. Turnage delivered the Opinion of the Court. The City of Bozeman appeals a jury verdict against it in this suit for breach of a construction contract. The jury awarded plaintiff Story $360,000 in tort damages for breach of the covenant of good faith and fair dealing and $13,236 in contract damages. Story cross-appeals. We reverse and remand for retrial. The appellant raises two interrelated, dispositive issues. The first issue is whether the District Court erred in refusing to grant defendants1 motion for a new trial because the special verdict form was inadequate. The second is whether breach of the covenant of good faith and fair dealing gives rise to tort damages in a breach of contract action. In November 1985 Story successfully bid to construct two water mains for the City of Bozeman (City). The evidence at the one- week trial showed that there was an error in the City's bid schedule form where it gave the engineer's estimate of the amount of pipe bedding material needed for one of the two water mains. The bid schedule asked for a price on 120 I1C.F.l1 (cubic feet) of pipe bedding material. (The contract provided that if more material were needed, the successful bidder would be paid extra.) The evidence at trial indicated that the bid schedule should have read llC.Y.,ll for cubic yards, and that the other contractors who bid on the project assumed cubic yards. Story testified that he bid under a good faith assumption that only 120 cubic feet of pipe bedding material were estimated as needed on the main, as indicated on the bid schedule. This affected the amount of his bid on that item by a factor of 27, and was undoubtedly one reason he had the low bid on the contract. The City's position was that Story knew all along that the llC.F.n was a typographical error and that he bid a rate which would be appropriate for cubic yards but that he was holding out to be paid at a cubic foot rate as a bargaining chip. Story and the City had correspondence and discussions about this matter, but they never resolved it. Story's construction company began working on the water mains in March of 1986. Story made several requests to the City for time extensions on the job, due to bad weather. The City did not immediately approve or disapprove these requests. It maintained at trial that the weather was normal for that time of year in Bozeman and that most of the requests were not justified. Story contended at trial that, contrary to the advice of the private engineering firm on this project, defendant city engineer Neil Mann was holding the requests for extensions of time as leverage to force Story to accept the City's position on the pipe bedding material. The City eventually approved some of the extensions of time but disapproved most. The City presented evidence that Story's company did shoddy work on a pipeline which had to be dug up and redone and that at one time during this project, Story moved his crew and equipment to Manhattan, Montana, to work on another project. Story testified that the City had not provided him with appropriate bench marks where the pipe was mislaid and that it was too wet to work on the project in Bozeman at the time he did the work in Manhattan. The City also presented evidence that Story's workers alienated landowners adjacent to the building site by trespassing on and damaging their property. Story testified that the City's easement was not wide enough for this job. In May, Mann wrote to Story's surety on his performance bond, expressing concern that the water mains were not being completed on time. Story's bonding was cut off. In June, Story terminated the contract. In December of 1986, Story filed his complaint in District Court and in January 1987 filed an amended complaint. The complaint alleged that defendants breached their contract with Story, that they acted in bad faith, and that the letter written by Neil Mann to Story's bonding company was defamatory. The City's answer denied all wrongdoing and affirmatively alleged a typograph- ical error in the contract. The City counterclaimed against Story for reformation and breach of contract. Using a special verdict form proposed by Story and modified by the court, the jury found that both the City and Mann breached the covenant of good faith and fair dealing. It found no defama- tion in the letter from Mann to Story's surety. It found that there was a mutual mistake in the contract, and that the contract should be reformed to correct that mistake. It also found that Story acquiesced in the mistake. The court entered judgment against the City for $373,236 plus costs. Several post-trial motions were filed by each party. The court denied all such motions, and this appeal followed. SPECIAL JURY VERDICT FORM Did the District Court err in refusing to grant defendants1 motion for a new trial because the special verdict form was inadequate? The jury verdict form did not comply with this Court's decisions on the implied covenant of good faith and fair dealing. In actions in which allegations of breach of a covenant of good faith and fair dealing are based upon a contractual relationship between the parties, this Court has recently required a finding of breach of contract as a condition precedent to consideration of breach of the covenant of good faith and fair dealing. E.g. Montana Bank of Circle v. Ralph Meyers & Son, Inc. (Mont. 1989), 769 P.2d 1208, 1214, 46 St.Rep. 324, 331; Nordlund v. School Dist. No. 14 (1987), 227 Mont. 402, 406, 738 P.2d 1299, 1302. However, in this case, the main issue, other than defamation, was whether the contract was breached and by whom. This issue would have to be decided before any award of damages. In the pretrial order, both Story and the City listed whether the contract had been breached as an issue to be litigated at trial. The record reveals that the discussion and redrafting of the special verdict form took place after a long day of trial, lasting from 7 : 3 0 a.m. until after 10:OO p.m. The City's proposed special verdict form, while not a model of clarity, did include at inter- rogatory numbers 6 and 8 the questions, ! ' D i d the city of Bozeman breach its contract with Mark Story?I1 and, "Did Mark Story breach his contract with the City of Bozeman?I1 The court specifically rejected the City's special verdict form. The special verdict form used, which was modified by the court from the form offered by Story, does not include any question at all as to whether the contract was breached. It does not ask whether the breach arose from a violation of an explicit contract term or whether the breach arose from a violation of an implied covenant of good faith and fair dealing. The City objected that the verdict form was not logically organized and was confusing to the jury. The City did not, however, object on the specific grounds that the special verdict omitted the issue of breach of contract. For the benefit of the reader, we reprint the special verdict with the jury's answers: SPECIAL VERDICT We the jury, duly impaneled, answer the questions submitted to us in this Special Verdict as follows: QUESTION NO. 1: Did the City of Bozeman breach the obligation of good faith and fair dealing arising out of the Contract with Mark Story? ANSWER: Yes X NO QUESTION NO. 2: Did Neil Mann breach the obligation of good faith and fair dealing arising out of the Contract with Mark Story? ANSWER: Yes X NO QUESTION NO. 3: Is the May 13th, 1986 letter from Mann to Balboa (Exhibit No. 130-A) false and defamatory? ANSWER: Yes NO X If your answer is llyes" then move on to the next question. If your answer is "noI1 then skip to Question No. 6. QUESTION NO. 4: Is the May 13, 1986 letter from Mann to Balboa (Exhibit No. 130-A) privileged? ANSWER: Yes No QUESTION NO. 5 : If your answer to any of Questions 1, 2, or 3 is "yes1' then write in below the damages, if any, Mark Story incurred as a result of these actions. If your answer to 3 or 4 is "nott , you may not consider damages for defamation. QUESTION NO. 6: Was there a mutual mistake on Schedule 11, Item No. 1, of the Bid in the Contract? ANSWER: Yes X No If your answer is I1nol1 then skip to Question No. 11. QUESTION NO. 7: Did the City of Bozeman acquiesce in the mistake? ANSWER: Yes No X QUESTION NO. 8 : Is the City of Bozeman "estoppedl1 from claiming mistake? ANSWER: Yes No X QUESTION NO. 9: Has the City of Bozeman Itwaived" its right to claim mistake? ANSWER: Yes No X QUESTION NO. 10: Should the Contract be reformed to read so that Item No. 1 on Schedule I1 reads C.Y. instead of C.F.? If your answer to either Question 7, 8 or 9 is I1yeslt then the Contract may not be reformed. ANSWER: Yes X No QUESTION NO. 11: Did Mark Story acquiesce in the mistake? ANSWER: Yes X No If your answer is I1yeslt then skip to Question No. 14. QUESTION NO. 12: Is Mark Story llestoppedll from claiming Contract damages? ANSWER: Yes No If your answer is ltyesl1 then skip to Question No. 14. QUESTION NO. 13: Has Mark Story "waivedn his claim for Contract damages? ANSWER: Yes No If your answer is I1yesw then skip to Question No. 14. QUESTION NO. 14(A): If you find that there was mutual mistake and if you find that the answers to No's 11, 12 and 13 are "No1' then answer Question No. 15. QUESTION NO. 14: If you found that there was a mutual mistake and if you find that the answers to No's 11 or 12 or 13 are llYesll then Mark Story cannot recover damages for Type I1 Bedding. However, if the contract was breached by the City in other respects, you may consider damages for Mark Story for other contract breaches. QUESTION NO. 15 : What contract damages, if any, are due Mark Story? QUESTION NO. 16: Has Mark Story's further perfor- mance of the contract been excused by the conduct of the Defendants? ANSWER: Yes NO X QUESTION NO. 17: How much, if any, should the City of Bozeman recover on its Counter-claim against Mark Story? $ nothinq The Court will enter the proper judgment based upon the above answers. DATED this 23 day of March, 1988. Bruce E. Ivey Foreperson The very first question on the special verdict form was, "Did the City of Bozeman breach the obligation of good faith and fair dealing arising out of the Contract with Mark St~ry?~' This sounds in tort and does not adequately and clearly ask the jury to decide whether or not the contract was breached by a breach of the covenant of good faith and fair dealing. Next the jury was asked whether defendant Neil Mann had breached the covenant and then several questions about whether defendants had defamed Story. Then in Question No. 5, the jury was asked the amount of damages suffered by Story. In answer to Question No. 6, the jury found that there was a mutual mistake as to the amount of pipe bedding material. Therefore, the jury found no breach of contract by the City as to the amount of pipe bedding material. As one of the final questions on the special verdict form, the jury was asked the amount of contract damages to Story, without being asked whether the City had breached the contract. The jury awarded Story $13,236 in contract damages. In response to the next question, the jury answered, inconsistently, that Story's further performance of the contract had not been excused by the conduct of defendants. Special verdicts are governed by Rule 49 (a), M.R.Civ.P., which states as follows: Special verdicts. The court may require a jury to return only a special verdict in the form of a special written finding upon each issue of fact. In that event the court may submit to the jury written questions suscep- tible of categorical or other brief answer or may submit written forms of the several spe- cial findings which might properly be made under the pleadings and evidence; or it may use such other method of submitting the issues and requiring the written findings thereon as it deems most appropriate. The court shall give to the jury such explanation and instruc- tion concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue. If in so doing the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issue so omitted unless before the jury re- tires he demands its submission to the jury. As to an issue omitted without such demand the court may make a finding; or if it fails to do so, it shall be deemed to have made a finding in accord with the judgment on the special verdict. The dissent claims that we ignore this rule. Rule 49(a) first states that the special verdict must contain a finding upon each issue of fact. As demonstrated in the pretrial order, the parties to this case recognized that whether the contract had been breached was an important issue of fact. Yet the special interrogatories drafted at the eleventh hour completely leave this question out. The dissent is correct in stating that Rule 49(a) also requires that a party wishing to claim error predicated on the omission of an issue must demand the issue's submission to the jury before the jury retires. At least one United States Court of Appeals has held that, under the federal rule from which our Rule 49(a) is taken, a party may preserve its objection by proposing a special verdict form including the issue which is rejected or by objecting to a proposed special interrogatory. See Stewart & Stevenson Services, Inc. v. Pickard (11th Cir. 1984), 749 F.2d 635, 641. The purpose of either method is to direct the court's attention to the omitted issue. We adopt the Eleventh Circuit's holding. In this case, the City proposed a special verdict form which included the issue of breach of contract. The City's proposed special verdict form was rejected. The City also objected to the court's special verdict form on the grounds that the organization of the questions was not logical and would be confusing to the jury. The special verdict form was internally inconsistent, confusing, and misleading to the jury. We hold that the District Court erred in refusing defendants1 motion for a new trial because of inadequacy of the special verdict form. GOOD FAITH AND FAIR DEALING The parties contest the appropriate role of the implied covenant of good faith and fair dealing in a breach of contract action. Their arguments, the jury verdict form, and the damages awarded by the jury exhibit some confusion over that role. The jury awarded Story $13,236 in contract damages for an unspecified breach of the contract and $360,000 in tort damages for the City's breach of the obligation of good faith and fair dealing. This great disparity between contract and tort damages is symptomatic of a common problem in the use of the bad faith tort in contract litigation; the "tort tail1' has begun to wag the Itcontract dog." Because of this and other problems, we believe this is an ap- propriate time to review the current state of the law and to make mid-course corrections. The concept of good faith and fair dealing has a venerable history in the law of commercial contracts. It first appears in classical Roman law and by the eighteenth century was a well established principle of English contract law imbuing commercial relationships with the common religious and moral principles of the time . E. Farnsworth, Good Faith Performance and commercial Reasonableness under the Uniform Commercial Code, 30 U. Chi. L. Rev. 666, 669-70 (1962-63). In early twentieth century America, courts first implied the covenant in commercial contracts which, due to the imprecision of the business environment, required that some term be left to the discretion of one of the parties. The implied covenant prevented one party from taking advantage of that discretion to deprive the other of the benefit of the contract. See e.g. Loudenback Fertilizer Co. v. Tennessee Phosphate Co. (6th Cir. 1903), 121 F. 298, 303 (holding that the manufacturer could not interpret ltrequirementslr to purchase from the contract supplier only when the market price exceeded the contract price). Courts used the covenant as a Itgap filler" to interpret agreements to cover situations not anticipated in the writing. See e.g. Kirke La Shelle Co. v. Paul Armstrong Co. (N.Y. 1933), 188 N.E. 163, 168 (holding that under a contract entered prior to the advent of lltalkies,ll rights to a screen play included rights to the motion picture). Use of the covenant became so common that it was codified in the Uniform Commercial Code. See 1 R. Anderson, Uniform Commercial Code, 5 1-201:82 (3rd ed. 1981). In all cases, the remedy was the same; breach of the covenant or implied contract term was breach of the contract. Later, the courts began to imply a duty of good faith and fair dealing in liability insurance contracts when insureds sue their insurers for abusive claims settlement practices. The courts relied on the new tort version of bad faith because the insurance policies gave the insurer absolute discretion in settlement precluding suits for breach of contract. Compare e.g. Rumsford Falls Paper Co. v. Fidelity & Casualty Co. (Me. 1899), 43 A. 503, 506 (no breach of the expressed contract terms) ; Hilker v. Western Automobile Ins. Co. (Wis. 1931), 235 N.W. 413, 414 (breach of the implied covenant). More recently, some jurisdictions implied the covenant in employment contracts to protect at-will employees from wrongful discharge and, in the absence of an express contract, allowed tort recovery. See Fortune v. National Cash Register Co. (Mass. 1977), 364 N.E.2d 1251, 1256. The tort remedy has also been allowed when the parties had a special relationship. See e.g. Commercial Cotton Co. v. United Cal. Bank (Cal. App. 1984), 209 Cal.Rep. 551, 554. Montana's interpretation of the covenant of good faith and fair dealing has paralleled that of other jurisdictions, except that its trend in recent cases has been to treat the breach of the covenant as a tort. Montana recognizes that an insurer's statutory duties create a duty of good faith and fair dealing sounding in tort and running to both the insured and third-party claimants. Britton v. Farmers Ins. Group (1986), 221 Mont. 67, 72, 721 P.2d 303, 306; Fode v. Farmers Ins. Exchange (1986), 221 Mont. 282, 285, 719 P.2d 414, 416; Klaudt v. Flink (1983), 202 Mont. 247, 252, 658 P.2d 1065, 1067; First Security Bank of Bozeman v. Goddard (1979), 181 Mont. 407, 420, 593 P. 2d 1040, 1047. Prior to enactment of the Wrongful Discharge From Employment Act in 1987, Montana followed other states in upholding common-law tort actions for bad faith discharge. Dare v. Montana Petroleum Marketing Co. (1984) , 212 Mont. 274, 282, 687 P.2d 1015, 1020; Gates v. Life of Mont. Ins. Co. (1983), 205 Mont. 304, 307, 668 P.2d 213, 215. Montana has also recognized the bad faith tort in special relationships when the stronger party abuses its superior position. Tribby v. Northwestern Bank of Great Falls (1985), 217 Mont. 196, 211-12, 704 P.2d 409, 419 (bank's reckless disregard of depositor's rights) ; Morse v. Espeland (1985), 215 Mont. 148, 152, 696 P.2d 428, 430- 3 1 (attorney s fee agreement) ; First Nat '1. Bank in Libby v. Twombly (1984), 213 Mont. 66, 73, 689 P.2d 1226, 1230 (bank's improper recovery on a promissory note). Montana, however, has also used the bad faith tort in a manner uniformly rejected by all other jurisdictions. Montana has recognized the tort of bad faith in the typical arms-length contracts. See Dunfee v. Baskin-Robbins, Inc. (1986), 221 Mont. 447, 455, 720 P.2d 1148, 1153 (franchise agreement); McGregor v. Mommer (1986), 220 Mont. 98, 108, 714 P.2d 536, 543 (sale of business). In the seminal case of Nicholson v. United Pacific Ins. co., we adopted this tort remedy in the commercial setting to deal with a particular type of problem. The parties in that case entered a lease agreement which provided that the plaintiff would remodel a Helena, Montana, office to the defendant's satisfaction. During the remodeling the defendant decided to forego the new office. Instead of efficiently breachingthe lease agreement and paying the plaintiff contract damages, the defendant attempted to force the plaintiff to breach by repeatedly denying satisfaction with the remodeling. Nicholson, (1985) 219 Mont. 32, 34-35, 710 P.2d 1342, 1344. This Court affirmed tort damages against the defendant noting that each party to a contract has a justifiable expectation that the other will act in a reasonable manner in the performance or efficient breach of a contract. When one party used its discretion to arbitrarily, capriciously or unreasonably deprive the other party of the benefit of the contract, those expectations were violated. Nicholson, 219 Mont. at 41-42, 710 P.2d at 1348. Montana stands alone in allowing the bad faith tort in any type of contract. Apparently California is the only other jurisdiction to have applied the theory to commercial contracts, Seaman's Direct Buying Service, Inc. v. Standard Oil Co. (Cal. 1984), 686 P.2d 1158, 1167, but it quickly limited the tort action to cases of special relationships, Quigley v. Pet, Inc. (Cal. App. 1984), 208 Cal.Rep. 394, 403; Price v. Wells Fargo Bank (Cal. App. 1989), 261 Cal.Rep. 735, 741. The problems caused by contaminating common contract litiga- tion with tort damages are well recognized. See e.g. S. Ashley, Bad Faith Actions, 5 5 11.02 and 11.03 (1984); Comment, Commercial Bad Faith; Tort Recovery for Breach of Implied Covenant in Ordinary Commercial Contracts, 48 Mont. L . Rev. 349, 369-73 (1987) (authored by Glenn E. Tremper). Primarily, the specter of tort damages upsets the concept of efficient breach. Parties have traditionally been free to breach their contract and pay contract damages whenever performance was not economically efficient. The relative- ly simple calculation of whether it is more profitable to breach a contract and pay damages rather than to perform is now compli- cated by the possibility of more indefinite tort damages. It is true that efficient breach is rarely efficient; the winning party must pay the cost of recovering contract damages. T. Diamond, The Tort of Bad Faith: When, If At All, Should It Be Extended Beyond Insurance Transactions?, 64 Marq. L. Rev. 425, 439-43 (1981) . This problem, however does not support tort damages. In written contracts, the parties can avoid this inequity by providing in the contract for an award of costs and attorney's fees to the prevail- ing party. See § 28-3-704, MCA. As with damages, the evidence in cases involving contracts becomes more speculative when tort actions are allowed. Contract litigation cases are now routinely accompanied by bad faith tort claims opening the litigation to evidence far beyond the tradition- al contract issues. Instead of concentrating on pertinent issues such as offer, acceptance, breach, and mistake, the jury is faced with evidence of moral wrongdoing and punitive damages--evidence that may be misleading and inflammatory in contract litigation. Since first recognizing the cause of action in 1979, First Security Bank of Bozeman v. Goddard (1979), 181 Mont. 407, 420, 593 P.2d 1040, 1047, this Court has decided more than twenty bad faith cases. As the tort became more prevalent in all contexts, this Court's interpretations have evolved to limit its over-use. In wrongful discharge cases, we held that the covenant arises only when the employer's objective manifestations give the employee a reasonable belief that he or she has job security. Dare v. Montana Petroleum Marketing Co. (1984), 212 Mont. 274, 283, 687 P.2d 1015, 1020. In Nicholson we stated that the covenant of good faith and fair dealing does not arise in every contract, but instead depends on the justified expectation of the parties created by their particular contractual relationship. Even when the covenant arose, it was breached only by an arbitrary, capricious or unreasonable violation of those expectations. Nicholson, 219 Mont. at 41-42, 710 P.2d at 1348. We have also held that claims based on an insurer's bad faith refusal to settle must await determination of the underlying liability issue to prevent prejudice to the insurer. Fode v. Farmers Ins. Exchange (1986), 221Mont. 282, 287, 719 P.2d 414, 417. Most recently, we have adopted the position that the covenant cannot be breached unless the contract is also breached. Montana Bank of Circle v. Ralph Meyers & Son, Inc. (Mont. 1989), 769 P.2d 1208, 1214, 46 St.Rep. 324, 331; Nordlund v. School Dist. No. 14 (1987), 227 Mont. 402, 406, 738 P.2d 1299, 1302. The legislature has also reacted to the prevalence of bad faith torts. In 1987, it restricted wrongful discharge actions, Wrongful Discharge from Employment Act, ch. 641, 1987 Mont. Laws 1764, and punitive damages, Act Approved April 27, 1987, ch. 627, 5 2, 1987 Mont. Laws 1722. In actions arising out of contract, the legislature also banned punitive damages, Act Approved April 27, 1987, ch. 627, 5 1, 1987 Mont. Laws 1722, and damages for emotional distress, Act Approved April 15, 1987, ch. 488, 5 1, 1987 Mont. Laws 1195. While the latter provisions may not apply to the separate tort of bad faith, they do indicate that such damages are not always appropriate in contract actions. Most importantly, in § 28-1-211, MCA, the 1987 Legislature defined the standard of conduct under the implied covenant as honesty in fact and the observance of reasonable commercial standards--the same standard applied to merchants under the Uniform Commercial Code. Act Approved April 20, 1987, ch. 571, 5 1, 1987 Mont. Laws 1431. We are persuaded that it is time to reassess the covenant of good faith and fair dealing and to provide more workable guidelines for the future. In the typical contract case the Nicholson reasoning is still sound, but the Nicholson tort remedy is excessive. The Uniform Commercial Code provides a more workable model for most contracts not covered by specific statutory provisions. The Code states, "Every contract or duty within this code imposes an obligation of good faith in its performance or enforcement." Section 30-1-203, MCA. l1 'Good faith1 in the case of a merchant means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade." Section 30-2-103(1)(b), MCA. A party who breaches the covenant may be denied the benefit of a relevant Code provision or the breach may be deemed a breach of the contract. 1 R. Anderson, Uniform Commercial Code, 9 1-203: 14 (3rd ed. 1981 & 1989 Supp.). This Court believes that the Uniform Commercial Code model should be extended to cover all contracts and that the bad faith tort should be used only when the parties have a special relationship. We hold that every contract, regardless of type, contains an implied covenant of good faith and fair dealing. A breach of the covenant is a breach of the contract. Thus, breach of an express contractual term is not a prerequisite to breach of the implied covenant. For every contract not covered by a more specific statutory provision, the standard of compliance is that contained in § 28-1-211, MCA: The conduct required by the implied covenant of good faith and fair dealing is honesty in fact and the observance of reasonable commer- cial standards of fair dealing in the trade. This is the same standard as applied to merchants under the Uniform Commercial Code. Each party to a contract has a justified expecta- tion that the other will act in a reasonable manner in its perfor- mance or efficient breach. When one party uses discretion con- ferred by the contract to act dishonestly or to act outside of accepted commercial practices to deprive the other party of the benefit of the contract, the contract is breached. In the great majority of ordinary contracts, a breach of the covenant is only a breach of the contract and only contract damages are due. For breach of an obligation arising from contract, the measure of damages, except when otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment which was proximately caused thereby or in the ordinary course of things would be likely to result therefrom. Damages which are not clearly ascertainable in both their nature and origin cannot be recovered for a breach of contract. Section 27-1-311, MCA. In common contract actions, tort-type damages are not available for breach of the implied covenant of good faith and fair dealing. They are, however, available for traditional contract-related torts such as fraud, fraudulent inducement, and tortious interference with a contract. The tort of bad faith may still apply in exceptional cir- cumstances. It serves to discourage oppression in contracts which necessarily give one party a superior position. The legislature has codified the tort's most common applications. See Wrongful Discharge from Employment Act, 5 5 39-2-901 through -914, MCA; Unfair Trade Practices Act (Insurance) 55 33-18-101 through -1005, MCA. The tort remedy may also be available in contracts involv- ing special relationships which are not otherwise controlled by specific statutory provisions. To delineate those special rela- tionships we adopt the following essential elements from California case law. (1) the contract must be such that the parties are in inherently unequal bargaining posi- tions; [and] (2) the motivation for entering the contract must be a non-profit motivation, i.e., to secure peace of mind, security, future protection; [and] (3) ordinary contract damages are not adequate because (a) they do not require the party in the superior position to account for its actions, and (b) they do not make the inferior party llwholell; [and] (4) one party is especially vulnerable because of the type of harm it may suffer and of neces- sity places trust in the other party to per- form; and (5) the other party is aware of this vulnerability. Wallis v. Superior Court (Cal. App. 1984), 207 Cal.Rep. 123, 129. If the facts of the special relationship are undisputed as to whether there is a special relationship, it is a question of law for the court to decide. If substantial evidence is presented supporting each and all of the above essential elements and such evidence is controverted in whole or in part, there arises ap- propriate questions of material fact to be submitted to the jury. If substantial evidence is not presented in support of each and all of the essential elements, the court shall direct there is no special relationship. In special relationship contracts, the standard of conduct is the same as that for other contracts--honesty in fact and obser- vance of reasonable commercial standards of fair dealing in the trade. Section 28-1-211, MCA. In contracts involving the special relationships that we have delineated, supra, if the standard of conduct required by the implied covenant of good faith and fair dealing as defined in 5 28-1-211, MCA, is violated, the duty of good faith and fair dealing is breached. In addition to recovering damages for breach of contract, the aggrieved party may also recover tort damages. A special jury verdict form, such as that used in the present case, must present the jury with a consistent and logically ordered progression of issues reflecting the above analysis. When contract breach is alleged, the form must first direct the jury to determine if an express term of the contract was breached or if the implied covenant of good faith and fair dealing was breached. If the jury answers affirmatively, it may then consider contract damages. If the court, or the jury upon proper questions, as the case may be, has found that a special relationship exists between the contract- ing parties, and the jury has found the implied covenant was breached, the jury may then consider tort damages. FEE AGREEMENT Story has raised several issues on cross-appeal, none of which we need discuss because of our grant of a new trial. The City has also raised several other issues. The only one which we will address is a question of statutory construction. The issue is whether Story's counsel filed his "notice of fee agreement1' in a timely manner under 5 2-9-314, MCA. He filed it after entry of judgment . Section 2-9-314(1), MCA, provides: When an attorney represents or acts on behalf of a claimant or any other party on a tort claim against the state or a political sub- division thereof, the attorney shall file with the claim a copy of the contract of employment showing specifically the terms of the fee arrangement between the attorney and the claimant. The statute says nothing about when the copy of the contract of employment must be filed. It merely tells where to file it. We hold that there is nothing in the statute to preclude the District Court's decision that the fee agreement was timely filed. Reversed and remanded. We concur: Justice John C. Sheehy, dissenting: I. The majority opinion is an example of scurrying through the record to find a bone to pick on which to base a reversal. The excuse for reversal is flimsy, and that is putting the best possible face on it. The theme of the reversal is that the special verdict form did not first require the jury to find a breach of contract as a condition precedent to finding a breach of the covenant of good faith and fair dealing. That theme ignores the specific instructions of the District Court to the jury, the submission by defendants of the same form of special verdict, and the provisions of Rule 49(a), M.R.Civ.P., which provisions the reversal ignores where they particularly apply. When a district court submits a special verdict on an issue of fact to be decided by the jury, the District Court must give an instruction telling the jury how to employ the special verdict. State Bank of Townsend v. Maryann's, Inc. (1983) , 204 Mont. 21, 32, 664 P. 2d 295, 301. The District Court precisely followed that rule in this case. The first question submitted to the jury was: QUESTION No. 1 : Did the City of Bozeman breach the obligation of good faith and fair dealing arising out of the Contract with Mark Story? ANSWER: YES X NO In instructing the jury on this subject, the court utilized instructions that were proposed by the defendants. The District Court accepted and gave defendant's proposed instructions no. 18 and 19, which respectively became court's instructions no. 33 and 34. Those instructions were as follows: INSTRUCTION NO. 33 There is a covenant of good faith and fair dealing implied into the contract between the City of Bozeman and the plaintiff which is measured by the justifiable expectations of the parties. The covenant of good faith and fair dealing is violated if the justifiable expectations of one party is exceeded by arbitrary, capricious, or unreasonable conduct by the other party. INSTRUCTION NO. 34 You must first find that the party breached the contract before you can consider whether the covenant of sood faith and fair dealins should be implied and if you find that the covenant should be implied, vou mav then consider whether the party breached the implied covenant. (Emphasis added.) In addition to the foregoing instructions directing the jury first to find a breach of the contract before it could find a breach of the obligation of good faith and fair dealing, the court carefully instructed the jury as to what a I1breachl1 of contract was: INSTRUCTION NO. 21 You are instructed that you must determine the nature and terms of the promises in the contract between the parties and further determine whether or not the promises contained in the contract have been fully performed by them. The failure, without legal excuse, to perform any promise which forms the whole or part of a contract is called a llbreachll of contract. Thus we have a situation where the defendant's view of Montana law applying to implied covenants of good faith and fair dealing was accepted by the court and given to the jury in the instructions. The court instructed the jury that it must first find that the defendant's breached the contract before the jury could consider whether the covenant of good faith and fair dealing was implied, and whether it was breached. The jury was further told what constituted a breach of contract. This case marks the first time, as far as I am able to discover, that a district court has been held in error by this Court for properly instructing a jury as to how the jury should employ and answer a special interrogatory. In instruction no. 1, the District Court told the jury in this case It. . . you are to consider all the instructions as a whole, and to regard each in the light of all the others. The order in which the instructions are given has no significance as to their relative importance.I1 In so instructing the jury as to how to answer question no. 1, the District Court faithfully followed the requirement of Rule 49(a), M.R.Civ.P., in part as follows: . . . The court shall give to the jury such explanation and instruction concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue . . . The second reason for this dissent is that the format followed by the District Court in submitting question no. 1 is precisely the format that was suggested by defendants in their submitted special verdict form. Attached to this dissent as an exhibit is a copy of the special verdict form submitted by the defendants. It will be seen in that form that the first two questions proposed by the defendants related to pipe bedding material involved in the contract between the City of Bozeman and Mark Story. Question no. 3, however, is in almost the same language of question no. 1 which the court used. Thus, whether the District Court utilized the form submitted by the defendants or the form submitted by the plaintiff, in each event, the jury would have been led immediately to the question - of the breach of covenant of sood faith and fair dealins. The majority on this Court hold the District Court in error for following exactly the format for interrogatories submitted by the defendants. The majority opinion is mistaken in stating that the redrafting of the special verdict form took place after a long day of trial, lasting from 7:30 a.m. until after 10:OO p.m. That is not true. The majority have not read the record accurately. What did happen was that the jury, at the close of all the evidence, was excused in the afternoon of Tuesday, March 22, 1988. The court met with counsel in chambers after the jury was excused from 3:00 p.m. until 7:00 p.m. of March 22, 1988, at which time they considered the instructions and the special verdict form which had been offered. At that time, the only special verdict form offered for the court's consideration was that supplied by the plaintiff. The District Court judge examined the special verdict on March 22, and suggested modifications. The court and counsel adjourned at 7:00 p.m. that evening. The next morning the court and counsel met again in chambers at 7:30 a.m., and made a record as to the rulings of the District Court on the instructions, and on the special verdict. It was only at this time that the defendants presented any form of special verdict. Sometime after the settlement of instructions (the record does not disclose the hour), the District Court read the instructions to the jury and counsel argued. The jury retired to find a verdict and in the evening in the course of their deliberations sent out three questions for answer by the court. The District Court, by telephone conference, discussed with counsel the three questions, none of which related to the implied covenant of good faith and fair dealing, and revised the special verdict form accordingly. This revision did occur in the evening of March 23, 1988, but it did not pertain to Question No. 1. Thereafter, the jury returned its verdict in the form of special interrogatories. In ruling on the motion for a new trial, the District Court gave a further reason for denying the objections of the defendants to the jury verdict form, saying: (2) Special verdict forms submitted to the jury were confusing, unnecessarily complex, caused the jury to consider liability theories in an incorrect order, and unduly emphasized plaintiff's theories of recovery. On that objection, the Court points out that the Court requested interrogatories to be submitted by counsel and after thorough deliberation the instructions were settled on the 22nd day of March, 1988, from approximately 3:00 p.m. until 7: 00 p.m. The Court convened again at 7: 30 a.m. on the 23rd day of March, 1988, for the purposes of settling instructions and it was not until that time that the Defendants brought in a proposed form of special verdict. The Court examined the special verdict form submitted by the Plaintiff the day before and requested certain modifications. After considering both forms of the special verdict, the Court elected to use that form prepared by the Plaintiffs and rejected that prepared by Defendants because of the untimeliness of the filing of the same. Additionally, the Court found the Plaintiff's form more logical. The Court denies the Motion for a New Trial based upon the alleged deficiencies of the special verdict form. It is an unjustifiable imposition upon the District Court to hold it in error in the circumstances thus described. It is more unjustifiable when the defendants' proposed special verdict form only followed the format of the form already proposed by the plaintiff. It should be but is not important to this Court and to the decision that the defendants in this case never specifically told the District Court their objections to the special verdict form on the ground that the question of breach of contract should have been submitted first. When the District Court, formulating the special verdict, at the session on the morning of March 23, 1988, finally settled on the form to be used, the defendant made only this objection: MR. HERNDON: Let the record show that the Court, and essentially plaintiff's counsel, have redrafted plaintiff's version of the special verdict to which the defendants objected as being confusing, with a clear bias toward the plaintiff and a clear prejudice toward the defendants, and it misleads the jury as to the proper application of the instructions. The foregoing is nothing more than a general objection, worthless because it does not state with particularity where the court is in error. This Court ought to apply the same test to objections to a special interrogatory that is applied to instructions, as set out in Rule 51, M.R.Civ.P.: . . . Objections made shall specify and state the particular grounds on which the instruction is objected to and it shall not be sufficient in stating the ground of such objection to state generally that the instruction does not state the law or is against the law, but such ground of objection shall specify particularly wherein the instruction is insufficient or does not state the law, or what particular clause therein is objected to See Ahmann v. American Fed. Sav. & Loan Ass'n. (1988), 235 Mont. Rule 49 (a) , M.R. Civ. P., properly construed, requires that a specific objection be made to the Court. It provides in part: . . . The court shall give to the jury such explanation and instruction concerning the matter thus submitted as may be necessary to enable the jury to make its findings upon each issue. If in so doing the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issue so omitted unless before the jury retires he demands its submission to the iurv. As to an issue omitted without such demand the court may make a findins; or if it fails to do so, it shall be deemed to have made a findins in accord with the judsment on the special verdict. The first time that the defendants notified the District Court that they objected to the special verdict form because it did not first require a finding of breach of contract was in their Motion for New Trial filed April 1, 1988. A proper rule regarding objections to special verdicts is set out in H . J. Baker and Bro. v. Organics, Inc. (R. I. 1989) , 554 A. 2d 196, 201, which held that a party objecting to a special verdict must have submitted an interrogatory for the jury to the Court, and must object to the Court's failure to include the requested interrosatorv before the Court submits its own version to the jury. Under the instructions given by the Court as to question no. 1, absolutely no prejudice occurred to defendants, because in order to answer "yes1' to question no. 1, the jury, under the instructions, had first to find a breach of contract. The reason given by the majority for reversal, on this record is, again, f 1 imsy . In another context, the majority opinion states that the award of $13,236 in contract damages to Story is inconsistent with the jury's finding in answer to question no. 16 that Mark Story's further performance under the contract had not been excused by the conduct of the defendants. The finding of contract damages for breach, however, is completely in accord with instruction no. 22 given to the jury, which stated: Instruction No. 22 A party to a contract is excused from further performance by the breach of failure or performance of the other party only when that breach is so great as to defeat the objects of the contract. A breach which is incidental and subordinate to the main purpose of the contract and may be compensated - in damases does not justify termination and the injured party is still bound to perform his part of the agreement. (Emphasis added.) Thus, in awarding, damages to the plaintiff for breach of contract, without excusing his further performance, the jury acted consistently with the instructions and in accordance with law. When we read the second portion of the majority opinion, a light dawns as to the reason for the reversal on this thin record. The majority have a higher agenda, one beyond the appeal in this case: the implied reversal of Nicholson v. United Pacific Ins. Co. (1985), 219 Mont. 32, 710 P.2d 1342. They use the vehicle of this case, weak as it is, to work their purpose. There is no issue raised in this case from the parties or the record as to the concept of the implied covenant of good faith and fair dealing in contracts. The law applying to this subject used by the District Court was that supplied bv the defendants. That application by the District Court has become the law of the case. Without briefs on the issues, and without notice to the Bar in general, the majority opinion accomplishes the following results: 1. The implied covenant of good faith and fair dealing attends every contract. 2. The tort of breach of the implied covenant arises only in I1special relationship^.^ 3. Where no special relationship exists, the only available damages are contract damages, regardless of how egregious the conduct of the wrongdoing party is and regardless of the tort involved. It is inconsistent of course to hold that the implied covenant of good faith and fair dealing attends every contract, and then to limit damages for a breach of the implied covenant to contract damages, unless a llspecial relationshipI1 exists between the contracting parties. The implied contract does not depend for its existence upon express terms in the underlying contract. The implied covenant comes into being upon considerations of justice and fairness imposed by law, and the implied covenant exists whether or not the parties assented to it. Thus its breach is not a breach of contract, but is a tort, and has always been so defined. McGregor v. Mommer (1986), 220 Mont. 98, 108, 714 P.2d 536, 543, ("a breach of this implied covenant which results in damages can thus give rise to an action in tortu); Dunfee v. Baskin-Robbins, Inc. (1986), 221 Mont. 447, 455, 720 P.2d 1148, 1153, ("In a commercial setting, we now have held that where the conduct of one party unreasonably breaches the justifiable expectations of the other party, an action in tort result^^^). Applying contract damages to the tort of breach of the implied covenant is a perversion of the historical difference the law has always perceived in damages arising from breach of contract and those arising from tort. Five justices presently on this Court unanimously agreed to Nicholson v. United Pac. Ins. Co., supra. In that case, this Court stated: While we decline to extend the breach of implied covenant to all contract breaches as a matter of law, as California has done, we agree with the statement in Ouiqlev, supra, that the tort resulting from this breach depends on some impermissible activity. The Montana cases discussed above focus on the action of the breaching party in the relationship to find a breach of the implied covenant, not just the existence of a breach of contract. At this point a helpful distinction should be noted between an intentional breach or one motivated by self- interest, giving rise to only contract damages, and the action which would give rise to a breach of the implied covenant, resulting in tort damages. Historically, a party to a contract generally had the right to breach or pay damages rather than perform. The non-breaching party, theoretically, is "made wholeu from the damages paid following the breach and thus still receives the benefits from the agreement. 8tContract law is based in part on the assumption that certain intentional breaches are to be encouraged. Permitting parties to breach their contracts promotes an efficient economy, at least when the gains for the breach exceed the expected pecuniary injuries of the promisee. I' Diamond, The Tort of Bad Faith Breach of Contract: When, If At All, Should It Be Extended Beyond Insurance ~ransactions, 64 Marquette Law Review, 425, 453 (1981). But whether performing or breaching, each party has a justifiable expectation that the other will act as a reasonable person. Neal v. Farmers Insurance Exchange (Cal. 1978), 21 Cal.3d 910, 148 Cal.Rep. 389, 582 P.2d 980. The nature and extent of an implied covenant of good faith and fair dealing is measured in a particular contract by the justifiable expectations of the parties. Where one party acts arbitrarily, capriciously, or unreasonably, that conduct exceeds the justifiable expectations of the second party. The second party should then be compensated for damages resulting from the other's culpable conduct. 219 Mont. at 41-42, 710 P.2d at 1348. What a far cry from the enlightened opinion in Nicholson is the decision today of the majority of this Court. Nicholson provides us with a good example of the effect of the majority opinion in this case. Nicholson was a building owner in downtown Helena who had entered into a lease agreement with United Pacific Insurance (UPI) for office space. The lease agreement contained provisions that Nicholson confer with UP1 about the renovation of the office building space, and that the final plans for renovation were subject to mutual approval. As the work progressed, Nicholson found it increasingly difficult to get approval from UP1 of his renovation project. He continuously sent plans, conferred with their architects, and finally lost communication altogether with the company officers. Nicholson sent a final revised plan of renovation to UP1 and three days later received a letter from UP1 rescinding the lease agreement. ~icholson filed a complaint after notice of default against UPI, and during discovery, learned that a Ivsecretvv UP1 task force had made recommendations about reorganizing the company, the effect of which would be to transfer the Helena office to Salt Lake City, Utah. Nicholson argued that when UP1 realized this, it became intransigent and threw obstacles hoping to cause him to breach the lease agreement. Based on these facts, Nicholson contended that UP1 had rescinded the lease without justification. Nicholson spent sums in excess of $98,000 in remodeling. Upon Nicholsonvs suit, the jury returned a verdict in his favor for compensatory damages of $211,105 and exemplary damages of $225,000. If the opinion in this case had been in effect when Nicholson came before this Court, then Nicholson should have lost completely on breach of the covenant. Under the majority opinion, if applicable, no vvspecial relationshipvv existed between Nicholson and UPI, and his damages would be, if any, limited to what the majority describe as an "efficient breach. Needless to say, the only party for whom such a breach would be "efficienttv was UPI. The sentence in the majority Opinion (slip opinion, p. 20) that "breach of an express contractual term is not a prerequisite to breach of the implied covenantvv is an interesting reversal, without saying so, of Montana Bank of Circle v. Meyers & Son (Mont. 1989), 769 P.2d 1208, 1214, and Nordlund v. School District No. 14 (1987), 227 Mont. 402, 406, 738 P.2d 1299, 1302. No longer does this Court require a breach of the underlying express contract terms before the obligation of good faith may be considered by the jury. Thus the majority abandon the reason for which in the first place they reverse this case. In the forepart of the their Opinion, the majority see evil in the special verdict form because the jury was not first required to find an underlying breach of the express terms of the contract. Now, such a finding is needless. It demonstrates again the flimsiness of the grounds for reversal in this case. What the majority have done in this case is to abrogate any remedy for arbitrary, capricious or egregious conduct by a contracting party, upon issues not raised in this file nor on the record and without notice to the Bar in general. The reversal of the hard-won verdict obtained by Mark Story in this case is a joke. Under the limitations of the majority opinion, he will never again be justly compensated by any jury. Please register my strong dissent to the uncalled-for result in this case. , . - - 7 I concur in the foregoing dissent of Justice Sheehy. EXHIBIT A to dissent of Justice John C. Sheehy (Special verdict form submitted by defendants on the morning the case was submitted to the jury.) SPECIAL VERDICT We, the jury, duly impaneled to try the above entitled cause, answer the questions submitted to us in this Special Verdict as follows: QUESTION NO. 1: Did the contract between Mark Story and the City of Bozeman fail to state the true intention of the parties with respect to the units of Type 2 Pipe Bedding material, in place in Item 1 of Schedule I1 of the Group Watermain Project by reason of fraud, mistake of one party while the other at the time knew or suspected that the written contract did not truly express the intention of the parties? ANSWER: (write l1yesl1 or I1noN If you answer llyesll go to Question No. 2. If you answer I1nol1 go to Question No. 3. PUESTION NO. 2: Did the City of Bozeman and Mark Story intend that the unit quantity of Type 2 Pipe Bedding in place to be I1C.F.l1 meaning cubic feet or "C.Y." meaning cubic yards in item 1 of Schedule I1 of the Group IV Watermain Project in the contract between the parties? ANSWER: "C.F." was intended (write l1yesU or I1not1 I1C. Y . was intended (write llyesll or I1nol1 QUESTION NO. 3: Did the City of Bozeman breach the implied covenant of good faith and fair dealing in its contract with Mark Story? ANSWER: (write I1yes1l or I1nol1 QUESTION NO. 4 : Does the May 13, 1986, letter from Neil Mann to Balboa Insurnce Company (Exhibit 130 A) contain false and defamatory statements concerning Mark Story? ANSWER : (write llyesll or I1nol1 If the answer is I1nol1 skip Question No. 5 and go to Question No. 6. QUESTION NO. 5: Is the May 13, 1986, letter from Neil Mann to Balboa Insurance Company (Exhibit 130 A) privileged? ANSWER: (write I1yes1l or "nov1 OUESTION NO. 6: Did the City of Bozeman breach its contract with Mark Story? ANSWER: (write llyesll or llnoll 9UESTION NO. 7: Is Mark Story entitled to any additional compensation for the work done or the materials furnished under the terms of the contract with the City of Bozeman? ANSWER: (write "yesI1 or l1noIg QUESTION NO. 8 : Did Mark Story breach his contract with the City of Bozeman? ANSWER: (write I1yesl1 or I1nol1 OUESTION NO. 9: Is the City of Bozeman entitled to recover liquidated damages from Mark Story under their contract dated November 12, 1985? ANSWER: (write llyesll or "nof1 OUESTION NO. 10: Is the City of Bozeman entitled to recover damages for the cost of repairs to the Valley View Golf Course necessitated by Mark Story trespassing outside of the working easement provided by his contract with the City of Bozeman? ANSWER: (write "yesI1 or llnoll OUESTION NO. 11: id Mark Story acquiesce in the error in the contract concerning whethr the unit quanity of Type 2 Pipe Bedding in place was "C.F.", meaning cubic feet or llC.Y.ll meaning cubic yard? ANSWER: (write "yes1' or l1noI1 QUESTION NO. 12: 3 Did the City of Bozeman acquiesce in the error in the contract concerning whether the unit quantity of Type 2 Pipe Bedding in place w.as "C. F. meaning cubic feet or llC.Y. meaning cubic yards? ANSWER: (write "yesI1 or tlnoll QUESTION NO. 13 : Is Mark Story llestoppedll from claiming contract damages? ANSWER : (write I1yest1 or "nov1 QUESTION NO. 14: Is the City of Bozeman 'lestoppedll from claiming contract damages? ANSWER: (write l1yesl1 or ltnol1 QUESTI0:N NO. 15: Has Mark Story "waived" his claim for contract damages? ANSWER : (write lfyesll or llnoll QUESTION NO. 16: Has the City of Bozeman "waivedn its claim for contract damages? ANSWER : (write I1yesr1 or l1non QUESTION NO. 17: Has Mark Story failed to mitigate his damages, if any? ANSWER: (write or QUESTION NO. 18: Has the City of Bozeman failed to mitigate its damages, if any? ANSWER : (write I1yesl1 or ltnoll QUESTION NO. 19: State the total damages recoverable by Mark Story, d/b/a/ Mark Story construction from the City of Bozeman. ANSWER: $ QUESTION NO. 20: State the total damages recoverable by the City of Bozeman from Mark Story, d/b/a Mark Story Construction. ANSWER: $ DATED this day of March, 1988. FOREPERSON OF THE JURY

May 3, 1989

edcbf09d-07d4-47b0-a00b-59ac6a52cbe2

State v. Wright

2016 MT 278N

DA 14-0642

Montana

Montana Supreme Court

DA 14-0642 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 278N STATE OF MONTANA, Plaintiff and Appellee, v. SCOTT DAVID WRIGHT, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC 13-517 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Moses Okeyo, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Brenda K. Elias, Assistant Attorney General, Helena, Montana Kristen Pabst, Missoula County Attorney, Shaun Donovan, Deputy County Attorney, Missoula, Montana Submitted on Briefs: September 21, 2016 Decided: November 1, 2016 Filed: __________________________________________ Clerk 11/01/2016 Case Number: DA 14-0642 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Scott David Wright appeals his conviction for failure to register as a sexual or violent offender, a felony, in violation of § 46-23-504, MCA. We address: (1) Whether the State of Montana produced sufficient evidence to prove that Wright knowingly failed to adequately register as a sex offender; and (2) Whether the District Court abused its discretion in giving the jury an instruction on circumstantial evidence. We affirm. ¶3 On September 22, 2013, Wright was released from a ten-year prison sentence in Washington. Immediately after his release, Wright travelled to Missoula. On September 25, 2013, Wright filled out two Montana Department of Justice forms: a Sexual or Violent Offender Registration Form and a Sexual or Violent Offender Registry (SVOR) Change of Information Form. On both forms, Wright listed “106 Grove” in Missoula as his primary address and his mother’s home address at 2840 Santa Fe Court, Apartment 321, as his mailing address. In front of each address, Wright wrote “temp.” or “temporary.” At some point before Wright’s release from prison, the address Wright identified as “106 Grove” had been changed to 2525 Larkin Wood Drive. Several years before Wright’s release, Ed Johnson, who lives at this residence, told Wright in a letter 3 that Wright could stay with Johnson at his home in Missoula upon his release. Wright did not respond to Johnson’s offer, and they never discussed it again. Approximately one week before Wright’s release from prison, law enforcement contacted Johnson and informed him of Wright’s plan to live with him. Law enforcement also informed Johnson that Wright was required to register as a Level 3 Sexual Offender with the SVOR. After learning that Wright was required to register as a sex offender, Johnson told law enforcement that Wright would not be allowed to live with him. Johnson also informed Wright’s mother in three separate conversations—twice via telephone and once in person—that Wright could not stay with him and would need to make other arrangements. ¶4 Despite identifying Johnson’s home as his primary residence, Wright never resided at Johnson’s home. On September 28, 2013, Wright was arrested at his mother’s home at 2840 Santa Fe Court. The State charged Wright with Failure to Register as a Sexual or Violent Offender in violation of § 46-23-504, MCA, and designated Wright as a persistent felony offender. The matter was set for trial. ¶5 Prior to trial, Wright objected to the District Court’s proposed jury instruction on circumstantial evidence. The proposed instruction provided: “When circumstantial evidence is susceptible to two interpretations, one that supports guilt and the other that supports innocence, the jury determines which is most reasonable.” The District Court overruled Wright’s objection. At the close of the State’s case, Wright moved to dismiss the charge against him, arguing that the State did not produce sufficient evidence to meet 4 its burden of proof. The District Court denied Wright’s motion. Wright appeals the District Court’s ruling on his motion to dismiss due to insufficient evidence and its jury instruction on circumstantial evidence. ¶6 We review de novo whether sufficient evidence existed to support a jury’s verdict. State v. Azure, 2008 MT 211, ¶ 13, 344 Mont. 188, 186 P.3d 1269. We will affirm the verdict if, reviewing the evidence “in a light most favorable to the prosecution,” a rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Azure, ¶ 13. We review jury instructions in a criminal case for abuse of discretion. State v. Zlahn, 2014 MT 224, ¶ 14, 376 Mont. 245, 332 P.3d 247. “A district court has broad discretion when it instructs a jury, and reversible error occurs only where the instructions prejudicially affect the defendant’s substantial rights.” Zlahn, ¶ 14. ¶7 1. Whether the State of Montana produced sufficient evidence to prove that Wright knowingly failed to adequately register as a sex offender. ¶8 Pursuant to § 46-23-504(1)(c), MCA, a sex offender must register with the SVOR “within 3 business days of entering a county of this state for the purpose of residing or setting up a temporary residence for 10 days or more . . . .” In addition, “[a]t the time of registering, the offender shall sign a statement in writing” that provides, among other information, the address of the offender’s residence. Section 46-23-504(3), MCA. “If an offender resides in more than one location within the same county or municipality, the registration agency shall require the offender to provide all of the locations where the offender regularly resides and to designate one of them as the offender’s primary residence.” Section 46-23-504(4), MCA. If an offender changes his or her residence 5 “the offender shall within 3 business days of the change appear in person and give notification of the change to the registration agency . . . .” Section 46-23-505(1), MCA. Pursuant to § 46-23-507, MCA, “[a] sexual or violent offender who knowingly fails to register, verify registration, or keep registration current” may be imprisoned and fined. ¶9 Wright contends that the State did not produce sufficient evidence to prove that he “knowingly” provided an improper address when he registered as a sex offender because the State did not show that Wright was aware Johnson revoked his offer of residence. Pursuant to Montana law, the District Court instructed the jury that “[a] person acts knowingly when the person is aware of his or her conduct,” see § 45-2-101(35), MCA, and “circumstantial evidence may be used to determine the existence of a particular mental state.” See § 45-2-103(3), MCA (“The existence of a mental state may be inferred from the acts of the accused and the facts and circumstances connected with the offense.”). Wright does not challenge these instructions. As the State points out, Johnson testified that Wright never accepted or asked Johnson about his offer, never asked Johnson for a key or discussed moving his belongings to Johnson’s home, never stepped foot into Johnson’s residence, and did not contact Johnson after his arrival in Missoula. From the evidence presented at trial, the jury could infer that Wright was aware that he provided Johnson’s address on his SVOR forms but never resided at that address nor contacted its inhabitant during the six days he was in Missoula before his arrest. Therefore, reviewing the evidence “in a light most favorable to the prosecution,” a 6 rational trier of fact could have found beyond a reasonable doubt that Wright knowingly failed to properly register with the SVOR. See Azure, ¶ 13. ¶10 2. Whether the District Court abused its discretion in giving the jury an instruction on circumstantial evidence. ¶11 Wright also contends that the District Court abused its discretion in giving the jury an instruction on circumstantial evidence because it “lessened the State’s burden of proof by allowing the jury to find Mr. Wright guilty based on insufficient proof and a ‘most reasonable’ standard.” Wright proposed adding additional language to the instruction to clarify that the State’s burden is proof beyond a reasonable doubt. The District Court overruled Wright’s objection, noting that it would explain the State’s burden elsewhere in its instructions. The District Court gave a “reasonable doubt” instruction to the jury three times during the trial: before opening statements, before closing arguments, and during its instruction on the elements of the crime. ¶12 “[J]ury instructions must fully and fairly instruct the jury regarding the applicable law.” Azure, ¶ 13. Wright notes that we have used the language he objects to—“When circumstantial evidence is susceptible to two interpretations, one that supports guilt and the other that supports innocence, the jury determines which is most reasonable”—since at least 1987. See State v. Tome, 228 Mont. 398, 401, 742 P.2d 479, 481 (1987) (using the term “trier of fact” instead of “jury”). More recently, in State v. Bowman, 2004 MT 119, ¶¶ 53-54, 321 Mont. 176, 89 P.3d 986, we held that the district court’s use of an almost-identical instruction to the one at issue here “adequately instructed the jury in accordance with the law.” Wright asks us to overrule this precedent. The State responds 7 that the District Court’s instruction on circumstantial evidence was merely a variation on the jury’s duty to weigh the evidence and make a determination regarding the credibility of the witnesses. See State v. Vandersloot, 2003 MT 179, ¶ 18, 316 Mont. 405, 73 P.3d 174 (“The weight of the evidence and the credibility of the witnesses are exclusively the province of the trier of fact and, in the event of conflicting evidence, it is within the province of the trier of fact to determine which will prevail.”). We agree. Moreover, given that the District Court instructed the jury that the State’s burden of proof is beyond a reasonable doubt on three separate occasions, Wright has not demonstrated that its instruction on circumstantial evidence prejudicially affected his substantial rights. The District Court did not abuse its discretion in giving its circumstantial evidence instruction. ¶13 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s interpretation and application of the law were correct and its ruling was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ PATRICIA COTTER /S/ LAURIE McKINNON

November 1, 2016

fb1cf82c-c01a-442e-ab94-5062c8f0a0de

623 Partners, LLC v. Hunter

2016 MT 336

DA 16-0234

Montana

Montana Supreme Court

DA 16-0234 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 336 623 PARTNERS, LLC, Plaintiffs and Appellees, v. GLENDA HUNTER, Individually and as Trustee of the R. LARRY TODD HUNTER and GLENDA HUNTER MONTANA REVOCABLE TRUST, Defendants, LARRY TODD HUNTER, Defendant and Appellant. APPEAL FROM: District Court of the Nineteenth Judicial District, In and For the County of Lincoln, Cause No. DV-11-94 Honorable James B. Wheelis, Presiding Judge COUNSEL OF RECORD: For Appellant: J. Tiffin Hall, Attorney at Law, Eureka, Montana For Appellees: Sean S. Frampton, Morrison & Frampton, PLLP, Whitefish, Montana Submitted on Briefs: November 2, 2016 Decided: December 20, 2016 Filed: __________________________________________ Clerk 12/20/2016 Case Number: DA 16-0234 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 623 Partners, LLC, obtained a judgment against Larry Hunter Development Co. and R. Larry Hunter (Larry) in 2011. In its effort to satisfy the judgment, 623 Partners claimed that property originally owned by Hunter Development was fraudulently transferred to Larry’s son, Larry Todd Hunter (Todd), in order to avoid subjecting the property to 623 Partners’ writ of attachment. The Nineteenth Judicial District Court concluded that the property was fraudulently transferred and that Todd was liable to 623 Partners for the proceeds he received from the sale of a parcel of the property. We upheld those determinations in 623 Partners, LLC v. Hunter, 2014 MT 282N, 377 Mont. 433, 348 P.3d 169 (Table) (hereafter Hunter I).1 On remand, Todd argued that the property was exempt from execution or forced sale because he had claimed it as his homestead, and that he was entitled to an offset from the judgment amount based on the value of the improvements that he made to the property. The District Court rejected Todd’s assertions. ¶2 We conclude that Todd is not entitled to a homestead exemption or an offset. We therefore affirm the District Court. PROCEDURAL AND FACTUAL BACKGROUND ¶3 Larry and Glenda Hunter owned and operated Hunter Development, which developed residential subdivisions in Georgia and Montana. Todd moved to Fortine, 1 Montana Supreme Court Internal Operating Rules, Section I, Paragraph 3(d)(v) provides in pertinent part that noncitable opinions “shall not be cited or relied upon as authority in any litigation in any court in Montana except when the decision establishes the law of the case.” 3 Montana, in 2002 and ran a contracting business. Shortly after Todd moved to Montana, Hunter Development purchased a number of parcels of land near Fortine. Todd built a home and made other improvements on a parcel of the Fortine property beginning in 2006. ¶4 Hunter Development executed and delivered a promissory note—the loan obligation underlying this action—to Georgia State Bank in May 2007. Hunter Development secured the promissory note with real property it owned in Georgia and with Larry’s personal guaranty. The promissory note and guaranty were subsequently transferred and assigned to 623 Partners. ¶5 Shortly after executing the promissory note, Larry and Glenda formed the R. Larry Hunter and Glenda Hunter Montana Revocable Trust (Trust). In June 2007, Larry and Glenda conveyed three parcels of the Fortine property to the Trust through a quitclaim deed for no consideration. The parcels were to be held by the Trust and distributed to the Hunters’ children when Larry and Glenda died. ¶6 Hunter Development and Larry defaulted on their payment obligations under the promissory note in May 2008. Later that month, the Trust and Todd entered into a purchase agreement for the parcels of the Fortine property held by the Trust. The Trust conveyed the parcels to Todd by warranty deed. Todd made only one payment to the Trust under the purchase agreement. Todd later sold one of the parcels but did not pay the Trust the full amount of the proceeds from the sale. In February 2011, Todd claimed 4 as his homestead the parcel with his home and improvements, as provided in Title 70, Chapter 32, MCA. ¶7 623 Partners filed suit against Hunter Development and Larry in Georgia prior to Todd’s homestead declaration. It obtained a judgment against them in the amount of $1.2 million. In April 2011, 623 Partners filed this claim in the Nineteenth Judicial District Court seeking to set aside alleged fraudulent transfers of the Fortine property. 623 Partners also recorded a lis pendens on the remaining parcels. ¶8 The District Court granted 623 Partners partial summary judgment. The court held: (1) that the Trust’s conveyance of the Fortine property to Todd was a fraudulent transfer pursuant to § 31-2-334(2), MCA, and was “accordingly void, set aside, and annulled”; (2) that Larry and Glenda’s conveyance of the Fortine property to the Trust was not a qualifying transfer under § 31-2-328(12), MCA, was made in violation of § 31-32-334(2), MCA, and was “accordingly void, set aside, and annulled”; (3) that the Fortine property was subject to 623 Partners’ writ of attachment for purposes of satisfying its judgment against Hunter Development and Larry; and (4) that Todd was liable to 623 Partners for the proceeds he received from the sale of the parcel of the Fortine property. The court ordered that the Fortine property could not be transferred or encumbered and that the property was to be sold in order to satisfy 623 Partners’ judgment against Hunter Development and Larry. ¶9 Todd filed a motion requesting relief from the District Court’s judgment and for a stay of the sale of the property. Todd argued, in part, that he was entitled to an offset 5 from the judgment amount based on the value of the improvements that he made to the property and that the property was exempt from execution or forced sale because he had claimed it as his homestead. The District Court stayed the execution and sale of the Fortine property, but declined to decide Todd’s offset and homestead exemption claims before 623 Partners attempted execution. Todd then appealed the District Court’s grant of summary judgment to 623 Partners. We affirmed the District Court’s order and remanded for further proceedings on Todd’s homestead exemption claim. Hunter I, ¶ 31. ¶10 On remand, 623 Partners moved for summary judgment on Todd’s homestead exemption claim. Todd moved for an order granting his homestead exemption and offset claims. The court granted 623 Partners summary judgment regarding the homestead exemption but concluded that it lacked jurisdiction over the offset issue due to an order in a related proceeding in the United States Bankruptcy Court for the District of Montana. The Bankruptcy Court then issued an order authorizing the District Court to address the offset issue. Todd renewed his motion for an offset, which the District Court denied. Todd appeals the District Court’s grant of summary judgment to 623 Partners regarding his homestead exemption claim and the District Court’s denial of his motion for an offset. STANDARD OF REVIEW ¶11 We review summary judgment rulings de novo, applying the standards set forth in M. R. Civ. P. 56(c)(3). Citizens for a Better Flathead v. Bd. of Cnty. Comm’rs, 2016 MT 256, ¶ 10, 385 Mont. 156, 381 P.3d 555. We review a district court’s conclusions of law to determine whether they are correct. Citizens for a Better Flathead, ¶ 10. 6 DISCUSSION ¶12 1. Whether the District Court correctly concluded that Todd did not qualify for a homestead exemption. ¶13 Relying in part on McCone County Federal Credit Union v. Gribble, 2009 MT 290, 352 Mont. 254, 216 P.3d 206, the District Court concluded that Todd did not qualify for a homestead exemption because he never owned the property. The court reiterated that Todd obtained the property through a preferential transfer pursuant to § 31-2-334(2), MCA, and thus that the transfer qualified as a fraudulent transfer under Montana’s Uniform Fraudulent Transfer Act (UFTA), §§ 31-2-326 to -342, MCA. Because Todd obtained the property through a fraudulent transfer, the court reiterated that the transfer had been set aside and that the property had revested in the Trust. The court noted that we upheld these determinations in Hunter I. The court clarified that, based upon its earlier rulings, “Todd was never the rightful owner of the property.” Relying on authority from other states pertaining to homesteads, the court concluded that Todd could not claim a homestead exemption because he never owned the property. ¶14 In Hunter I, we affirmed the District Court’s conclusion that the Trust’s conveyance of the property to Todd qualified as a fraudulent transfer under the UFTA. Hunter I, ¶ 23. We affirmed further the District Court’s conclusion that the property revested in the Trust and was subject to execution by 623 Partners. Hunter I, ¶ 24; accord Gribble, ¶ 17 (concluding that when a transfer is set aside as fraudulent under the UFTA, “the property at issue revests in the debtor who transferred it,” and “the creditor may make a claim against it for purposes of satisfying a judgment the creditor has against 7 the debtor”). Our decision affirming the District Court’s judgment established the law of the case that, as the District Court held, the transfer was “accordingly void, set aside, and annulled.” See Fiscus v. Beartooth Elec. Coop., 180 Mont. 434, 437, 591 P.2d 196, 197 (1979) (concluding that when we state in an opinion “a principle or rule of law necessary to the decision, such pronouncement becomes the law of the case, and must be adhered to throughout its subsequent progress”) (citation and internal quotations omitted). The District Court therefore correctly clarified upon remand that Todd never lawfully owned the property. See § 31-2-339(1)(a), MCA (providing that under the UFTA, a creditor may obtain “avoidance of the transfer . . . to the extent necessary to satisfy the creditor’s claim”); 37 Am. Jur. 2d Fraudulent Conveyances and Transfers § 116 (2015) (providing that a fraudulent transfer “is void or voidable and will be set aside in a proper proceeding”). The purpose of remand was to allow the District Court to determine whether Todd could avail himself of any exemptions from execution. ¶15 Homesteads generally are “exempt from execution or forced sale.” Section 70-32- 201, MCA. The homestead exemption applies to the UFTA. Gribble, ¶ 24 (concluding that “a homestead is not an ‘asset’ under the UFTA and therefore is not subject to the provisions of the Act”). Thus, if Todd properly could claim the property as a homestead, the property would not be subject to execution by 623 Partners. ¶16 We have not directly considered whether a person may claim a homestead on property that he or she has never lawfully owned. We have, however, addressed whether a person could protect the proceeds from the sale of a home she owned when she filed a 8 homestead declaration after selling the home. In re Snyder, 2006 MT 308, 335 Mont. 11, 149 P.3d 26. Snyder had sold her home in February, filed her homestead exemption in September, and filed for Chapter 7 bankruptcy in October. Snyder, ¶¶ 2-3. In concluding that she had the right to exempt a portion of the proceeds from the sale of her home from the bankruptcy estate, we noted that the UFTA “provides protection for traceable proceeds from [properties that have been sold or taken by condemnation] if the properties ‘could have been claimed as an exempt homestead’ . . . at the time of disposal.” Snyder, ¶ 10 (quoting § 70-32-216, MCA) (emphasis in original). Snyder thus establishes that a claimant does not have to own the property when she files a homestead exemption so long as the property could have been claimed as a homestead in the first place. ¶17 In construing a statute, we look “to the plain meaning” of its language, and we read the “statute as a part of a whole statutory scheme.” Eldorado Coop Canal Co. v. Hoge, 2016 MT 145, ¶ 18, 383 Mont. 523, 373 P.3d 836 (citations and internal quotations omitted). Chapter 32 of Title 70, MCA, sets forth a number of requirements for establishing a homestead. Sections 70-32-101 to -107, MCA. Significantly, § 70-32- 103, MCA, entitled, “From whose property homestead may be selected,” provides that a married couple may select a homestead “from the property of either spouse,” and an unmarried person may select a homestead “from any of the claimant’s property.” (Emphasis added.) The statute’s plain language establishes that a person may select a homestead from his or her property only. Reading the Homestead Act as a whole supports this conclusion. E.g., § 70-32-104(2), MCA (“If a claimant who is an owner of 9 an undivided interest in real property claims a homestead exemption . . . .”) (emphasis added); § 70-32-216(1), MCA (“If property . . . that could have been claimed as an exempt homestead has been sold . . . and the owner has been indemnified for the property, the owner is entitled for 18 months to exemption of the proceeds that are traceable.”) (emphasis added). Restricting a person to claiming a homestead on property the person owns—or has owned—furthers one of the homestead exemption’s primary purposes: “to promote the stability and welfare of the state by encouraging property ownership.” 40 Am. Jur. 2d Homestead § 4 (2015). ¶18 While the homestead exemption may protect property from execution or forced sale under the UFTA, Gribble, ¶ 24, the property has to qualify as a homestead in the first place, Snyder, ¶ 10. Todd’s title to the Fortine property derived from a fraudulent transaction. Because that transaction was declared void, Todd never owned the property. Todd could not claim the property as a homestead. The District Court correctly applied the law on this point. ¶19 2. Whether the District Court correctly concluded that Todd was not entitled to an offset for improvements he made to the property. ¶20 The District Court determined that even though Todd’s claim for an offset suffered from a number of procedural flaws, it also lacked substantive support in the law. The court noted that § 31-2-340(6)(a), MCA—upon which Todd initially based his offset claim—was not applicable to the circumstances of this case, in part because the improvements Todd made to the property were completed before the Trust transferred the property to him. Thus, the court concluded, “The improvements made prior to the 10 transfer were merged with the real property when it was conveyed and cannot be separated.” The court determined that the statute was further inapplicable because “[a]ny ‘new value’ given by the improvements were for Todd Hunter’s (found to be an ‘insider’) benefit, not ‘to or for the benefit of the debtor,’ as required by § 31-2-340(6)(a), MCA.” The court concluded that Todd could not rely on § 31-2-340(6)(a), MCA, because it “is designed to protect an insider who is also an unsecured creditor of the debtor” and Todd was not a creditor of Larry. Finally, the court concluded, the general offset doctrine “applies only to parties who are mutually indebted.” The court noted that Todd did not, and could not, claim that 623 Partners was indebted to him. The District Court thus concluded that Todd could not claim an offset. ¶21 On appeal, Todd argues that the District Court incorrectly determined that he was not entitled to recover the value of his labor and improvements he made to the property. Todd contends that public policy and equitable considerations support his position. He asserts that “the UFTA does not provide any statutory or legal protection for a transferee who loses his property when there is a narrow finding of a preferential transfer under § 31-2-334(2), MCA.” Without developing his argument, Todd contends that principles of law and equity supplement the UFTA’s provisions pursuant to § 31-2-342, MCA. Todd asserts further that “it is well established that a district court may accept jurisdiction in equity when no statutory or legal remedy is available.” Accordingly, Todd contends, 11 we should invoke our equitable authority and conclude that he “is entitled to receive an offset or credit for the value of his labor and improvements he made to the property.”2 ¶22 Section 31-2-340(6), MCA, affords transferees who receive assets through a preferential transfer pursuant to § 31-2-334(2), MCA, three possible defenses to forestall avoidance of the transfer. Yet, as the District Court concluded—and Todd apparently concedes on appeal—the statute is inapplicable to the circumstances of this case. While Todd does not contest the District Court’s determination regarding the statute’s applicability, he does contend that he is entitled to an equitable interest or credit for the value of his labor on and improvements to the property based on principles of law and equity. ¶23 As Todd points out, the provisions of the UFTA may be supplemented by other principles of law and equity. Section 31-2-342, MCA, provides: Unless displaced by the provisions of this part, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause, supplement its provisions. The statute makes clear that unless the UFTA provides otherwise, other remedies may be available outside the UFTA. See Gulf Ins. Co. v. Clark, 2001 MT 45, ¶ 42, 304 Mont. 264, 20 P.3d 780 (relying on § 31-2-342, MCA, to observe that “another remedy at equity or law [outside the UFTA] may be available” to a creditor). Based on provisions nearly 2 623 Partners contends that the District Court lacked jurisdiction to address Todd’s offset claim because Todd did not preserve the claim in the first appeal. Todd counters that the District Court expressly reserved ruling on the issue until 623 Partners attempted execution. Given the procedural history, we find it appropriate to address Todd’s claims on the merits. 12 identical to § 31-2-342, MCA, other courts have recognized that principles such as estoppel, laches, and waiver may be invoked as a defense in fraudulent transfer actions. E.g., Sheffield Steel Corp. v. HMK Enters., 320 B.R. 423, 452-54 (Bankr. N.D. Okla. 2004); Reitmeyer v. Meinen, 232 B.R. 827, 843-44 (Bankr. W.D. Pa. 1999). ¶24 But beyond his general assertion of fairness, Todd has not articulated what, if any, principles of law and equity apply. Such principles require the party relying on them not only to assert them, but to make certain showings. See, e.g., McKay v. Wilderness Dev., LLC, 2009 MT 410, ¶ 29, 353 Mont. 471, 221 P.3d 1184 (defense of waiver must be affirmatively pled); Cole v. State ex rel. Brown, 2002 MT 32, ¶ 25, 308 Mont. 265, 42 P.3d 760 (concluding that “in order to apply the doctrine of laches, a showing must be made that the passage of time has prejudiced the party asserting laches or has rendered the enforcement of a right inequitable); City of Whitefish v. Troy Town Pump, 2001 MT 58, ¶ 20, 304 Mont. 346, 21 P.3d 1026 (concluding that the “six elements of equitable estoppel must be established, and by clear and convincing evidence”). It is not our responsibility “to conduct legal research on behalf of a party or to develop legal analysis that might support a party’s position.” State v. Gunderson, 2010 MT 166, ¶ 12, 357 Mont. 142, 237 P.3d 74. Consequently, we decline to determine whether any established principles of law and equity could entitle Todd to recover the value of his labor and improvements made to the property. We accordingly conclude that the District Court properly determined that Todd was not entitled to an offset. 13 CONCLUSION ¶25 We affirm the District Court’s orders and judgment. /S/ BETH BAKER We concur: /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ MIKE McGRATH /S/ JIM RICE

December 20, 2016

3c283909-389c-4c49-9d4c-eca499e7cc7e

McColl v. Lang

2016 MT 255

DA 15-0589

Montana

Montana Supreme Court

DA 15-0589 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 255 TINA McCOLL, Plaintiff and Appellant, v. MICHAEL LANG, N.D. and NATURE’S WISDOM, Defendant and Appellee. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-12-396 Honorable John C. Brown, Presiding Judge COUNSEL OF RECORD: For Appellant: Geoffrey C. Angel, Angel Law Firm, Bozeman, Montana For Appellee: Randy J. Cox, Tracey Neighbor Johnson, Boone Karlberg P.C., Missoula, Montana Submitted on Briefs: August 3, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 15-0589 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Tina McColl (McColl) appeals from a July 15, 2015 jury verdict in her favor against Michael Lang, N.D. (Lang). The jury found Lang departed from the standard of care applicable to a naturopathic physician in his care of McColl, awarded damages, but declined to award punitive damages. We affirm. ¶2 We restate the issues on appeal as follows: Issue One: Did the District Court abuse its discretion when it granted Lang’s motion to exclude evidence of the Food, Drug, and Cosmetic Act (FDCA) prohibition against selling, marketing, or manufacturing drugs not FDA approved and the Food and Drug Administration (FDA) warning letters regarding the use of black salve as a cure for cancer? Issue Two: Did the District Court abuse its discretion when it denied McColl’s motion to exclude Dr. Hangee-Bauer’s expert opinion testimony? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Lang is a licensed naturopathic physician. In January 2012, McColl saw Lang for a thyroid issue and discussed an eruption or blemish on her nose and her desire to remove it. In February 2012, McColl returned to Lang’s office where he applied black salve, an escharotic agent, to McColl’s nose. Lang sent her home with instructions to return. A few days later, McColl returned to Lang and he reapplied black salve to her nose. On February 16, 2012, McColl went to Belgrade Urgent Care complaining of facial swelling and burning. The treating physician diagnosed her with an infected third degree burn on her nose, which was 4mm deep and dime sized. Belgrade Urgent Care continued McColl’s care until she healed. Unhappy with the appearance of her nose, McColl underwent plastic surgery on April 4, 2012. A plastic surgeon repaired the indent with a 3 rotational flap repair. To maintain a scar free appearance McColl requires surgical injections twice a year. ¶4 In the initial complaint, McColl stated black salve was an unapproved new drug, the marketing of which violated the FDCA, and that as early as 2008 the FDA identified black salve as a fake cancer cure warning consumers not to use it. Prior to trial Lang filed a motion in limine to exclude evidence and argument relating to the FDCA prohibition against the sale, marketing, and manufacturing of drugs not FDA approved, and the FDA warning letters concerning black salve as a cancer cure. Lang’s defense argued the FDCA prohibition and FDA warning letters were irrelevant and overly prejudicial as McColl’s complaint addressed the practice of medicine, not the manufacturing, marketing, or selling of black salve. Further, Lang never claimed to be curing cancer with black salve. The District Court granted Lang’s motion to exclude finding the evidence irrelevant and overly prejudicial. ¶5 Prior to trial McColl filed a motion in limine to exclude testimony from Dr. Hangee-Bauer, Lang’s expert, on the standard of care for a naturopathic physician. McColl claimed that Dr. Hangee-Bauer was not an expert regarding the use or discharge of black salve. Lang contended that Dr. Hangee-Bauer was qualified to be an expert on the practice of naturopathic medicine, not the use of a specific product such as black salve. The District Court denied McColl’s motion to exclude, finding Dr. Hangee-Bauer satisfied the expert witness requirements under § 26-2-601, MCA. ¶6 At trial, the jury found Lang departed from the standard of care applicable to a naturopathic physician in his treatment of McColl, which resulted in damages. The jury 4 unanimously denied punitive damages, determining McColl failed to prove by clear and convincing evidence that Lang acted with actual malice. The jury awarded McColl $139,500 plus costs of $5,847.08, for a total of $145,347.08. McColl accepted a check for the amount of the judgment. McColl then filed the instant appeal claiming the District Court abused its discretion regarding the orders to exclude, arguing the rulings led to the jury’s unanimous rejection of a punitive damages award. She seeks a new trial on the issue of punitive damages. STANDARD OF REVIEW ¶7 This Court reviews an order barring evidence or testimony, including admissibility of expert testimony, for abuse of discretion. Cartwright v. Scheels All Sports, Inc., 2013 MT 158, ¶¶ 37, 47, 370 Mont. 369, 310 P.3d 1080. A court abuses its discretion if it acts arbitrarily without employment of conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice. Chase v. Bearpaw Ranch Ass’n, 2006 MT 67, ¶ 15, 331 Mont. 421, 133 P.3d 190. We will not reverse the district court’s ruling unless the abuse of discretion constitutes reversible error. Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 75, 341 Mont. 33, 174 P.3d 948. Reversible error occurs when a substantial right of the appellant is affected, or when the challenged evidence affected the outcome of the trial. Mont. Petroleum Tank Release Comp. Bd., ¶ 75. INTRODUCTION ¶8 McColl argues the District Court prejudiced her punitive damages claim by granting Lang’s motion to exclude the FDCA prohibition against the manufacturing, 5 marketing, and sale of black salve and its denial of her motion to exclude the expert testimony of Dr. Hangee-Bauer. McColl seeks a new trial under § 25-11-102, MCA, claiming the District Court abused its discretion when it ruled on the evidence and testimony forming the basis of this appeal, which affected her substantial rights. McColl cites Stevenson v. Felco Indus., 2009 MT 299, ¶ 16, 352 Mont. 303, 216 P.3d 763. ¶9 A jury verdict not to award punitive damages is reviewed under the substantial evidence rule. Sandman v. Farmers Ins. Exchange, 1998 MT 286, ¶¶ 39-41, 291 Mont. 456, 969 P.2d 277. Under the substantial evidence rule, a jury verdict will not be disturbed unless it is “inherently impossible to believe” or “there is an absence of probative facts to support the verdict.” Sandman, ¶ 41. The reviewing court’s only task is to “simply determine whether the verdict is supported by substantial credible evidence, which is defined as evidence that a reasonable mind might accept as adequate to support a conclusion.” Seltzer v. Morton, 2007 MT 62, ¶ 94, 336 Mont. 225, 154 P.3d 561. When making this determination, this court “views the evidence in the light most favorable to the prevailing party,” who is entitled to any “reasonable inference that can be drawn from the facts.” Seltzer, ¶ 94; Sandman, ¶ 41. ¶10 An award of punitive damages requires that the defendant act with actual malice or actual fraud. Section 27-1-221(1), MCA. “A defendant is guilty of actual malice if the defendant has knowledge of facts or intentionally disregards facts that create a high probability of injury to the plaintiff and: (a) deliberately proceeds to act in conscious or intentional disregard of the high probability of injury to the plaintiff; or (b) deliberately proceeds to act with indifference to the high probability of injury to the plaintiff.” 6 Section 27-1-221(2), MCA; Czajkowski v. Meyers, 2007 MT 292, ¶ 42, 339 Mont. 503, 172 P.3d 94. To win punitive damages the plaintiff must prove all of the elements by clear and convincing evidence. Section 27-1-221(5), MCA; Barnes v. United Indus., 275 Mont. 25, 31, 909 P.2d 700 (1996). “Clear and convincing evidence means evidence in which there is no serious or substantial doubt about the correctness of the conclusions drawn from the evidence. It is more than a preponderance of evidence but less than beyond a reasonable doubt.” Section 27-1-221(5), MCA; Czajkowski, ¶ 43. With this in mind we now discuss McColl’s abuse of discretion claims. DISCUSSION ¶11 Issue One: Did the District Court abuse its discretion when it granted Lang’s motion to exclude evidence of the Food, Drug, and Cosmetic Act (FDCA) prohibition against selling, marketing, or manufacturing drugs not FDA approved and the Food and Drug Administration (FDA) warning letters regarding the use of black salve as a cure for cancer? ¶12 Generally, all relevant evidence is admissible and evidence, which is not relevant, is not admissible. M. R. Evid. 402; Kissock v. Butte Convalescent Ctr., 1999 MT 322, ¶ 11, 297 Mont. 307, 992 P.2d 1271. Relevant evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury. M. R. Evid. 403; Kissock, ¶ 11. ¶13 The FDA regulates the manufacturing, marketing, and sale of prescription drugs under the Food, Drug, and Cosmetics Act (FDCA), 21 U.S.C. § 355(a) FDCA. See 21 U.S.C. § 355(a); In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, 678 F.3d 235, 239 (3d Cir. 2012). The FDA publishes warning letters to consumers when sellers are manufacturing, marketing, or selling unapproved drugs in violation of 7 the FDCA. The FDA does not regulate the practice of medicine. See 21 U.S.C. § 355(a) FDCA. However, the State of Montana specifically regulates the practice of naturopathic medicine. Title 37, chapter 26, MCA. Under Montana law naturopathic physicians may administer escharotic agents, such as black salve. See § 37-26-301(2)-(3), MCA; Admin. R. M. 24.111.511(9), .511(16)(a). ¶14 Lang did not sell, market, or manufacture black salve to McColl in violation of the FDCA prohibition outlined in 21 U.S.C. § 355(a) FDCA. McColl does not allege that Lang treated her for cancer. The use of black salve was an act undertaken in Lang’s role as a naturopathic physician. The FDCA prohibition and the FDA warning letters regarding black salve were properly excluded as they were irrelevant to the issues in this case and overly prejudicial. The District Court did not abuse its discretion when it granted Lang’s motions to exclude. ¶15 Issue Two: Did the District Court abuse its discretion when it denied McColl’s motion to exclude Dr. Hangee-Bauer’s expert opinion testimony? ¶16 Section 26-2-601(1), MCA, outlines the requirements an expert witness must possess to testify in medical malpractice claims regarding negligence and the standard of care. An expert witness must be (a) licensed as a health care provider in at least one state, treated the diagnosis or routinely treated the condition in the past 5 years, or provide the type of treatment which is at issue, and (b) through education, training and experience the expert is familiar with the standards of care and practice as they relate to the act or omission at issue. Section 26-2-601(1)(a)-(b), MCA. Expertise in the specific treatment is not required. Section 26-2-601, MCA; Beehler v. Eastern Radiological 8 Associates, P.C., 2012 MT 260, 367 Mont. 21, 289 P.3d 131 (experience performing the specific procedure at issue is not necessary in order to provide expert testimony). ¶17 Section 26-2-601, MCA, is considered in conjunction with M. R. Evid. 702, requiring an expert witness to be qualified by way of “knowledge, skill, experience, training, or education.” McClue v. Safeco Ins. Co., 2015 MT 222, ¶ 16, 380 Mont. 204, 354 P.3d 604. District courts are encouraged to “construe liberally the rules of evidence as to admit all relevant expert testimony.” McClue, ¶ 23 (citing Beehler ¶ 23 (quoting State v. Damon, 2005 MT 218, ¶ 17-19, 328 Mont. 276, 119 P.3d 1194)). ¶18 Under Montana law, Dr. Hangee-Bauer is required to be licensed by at least one state, routinely treat the type of condition at issue, facial lesions, and have the education and experience to be familiar with the standards of care and practice as they relate to Lang’s treatment of McColl. Section 26-2-601, MCA; M. R. Evid. 702. Dr. Hangee-Bauer is licensed in California as a naturopathic physician, has been practicing for thirty-one years, and routinely treats facial lesions in his patients. As a naturopathic physician, his education includes a four-year undergraduate degree in biology and chemistry, a four-year naturopathic school, and a two-year postgraduate residency. While Dr. Hangee-Bauer does not consider himself an expert on the use of black salve as an escharotic, he was qualified to testify regarding the standard of care required in this case. The District Court did not abuse its discretion when it denied McColl’s motion to exclude and allowed Dr. Hangee-Bauer’s expert testimony. ¶19 Implicit within McColl’s argument is the concession that without the excluded evidence, there was not sufficient evidence to support a punitive damages award. The 9 jury instructions clearly indicated what was required for the jury to find Lang acted maliciously. Based on the evidence presented, the jury did not find by clear and convincing evidence that the Defendant acted with malice. Persuaded by the facts in the case and informed by the clear jury instructions the jury refused to award punitive damages. We agree the jury verdict was supported by substantial evidence. CONCLUSION ¶20 The District Court properly determined the admissibility of the evidence and expert testimony in this case. There is no basis to McColl’s claim for a new trial. The jury’s unanimous verdict not awarding punitive damages was supported by substantial evidence. Affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE

October 11, 2016

9505dfbe-7c28-4f7b-999d-82aab8386296

State v. Russell

2016 MT 268

DA 15-0577

Montana

Montana Supreme Court

DA 15-0577 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 268 STATE OF MONTANA, Plaintiff and Appellee, v. GEORGIE E. RUSSELL, Defendant and Appellant. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Hill, Cause No. DC 14-138 Honorable Daniel A. Boucher, Presiding Judge COUNSEL OF RECORD: For Appellant: Lindsay A. Lorang, Lorang Law, PC, Havre, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Gina Dahl, Hill County Attorney, Havre, Montana Submitted on Briefs: August 10, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 15-0577 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Georgie Russell fled from a traffic stop on the Rocky Boy Indian Reservation. Police officers pursued her at high speeds—with lights and sirens activated—off the Reservation and into Hill County. Russell drove erratically, badly damaging her car and causing oncoming traffic to swerve to avoid collision. Police officers eventually arrested Russell. The State charged her with criminal endangerment, among other offenses. At trial, Russell proposed a jury instruction on negligent endangerment as a lesser included offense. The District Court denied her request. The jury convicted Russell of criminal endangerment. She appeals. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In November 2014, Rocky Boy Tribal Officer Larry Bernard responded to multiple calls of a car driving “all over the road” on the Reservation. Officer Bernard spotted the car in question driving in the wrong lane. He activated his patrol car’s lights to conduct a traffic stop, and the driver pulled the car to the side of the road. ¶4 Officer Bernard approached the stopped vehicle and recognized the driver as Georgie Russell. He noticed that Russell appeared intoxicated. Officer Bernard told Russell that he pulled her over because of multiple reports of her erratic driving. He asked her to turn off the engine, but she refused. When Officer Bernard attempted to open Russell’s driver’s-side door, Russell said either “fuck you” or “fuck this” and sped away. 3 ¶5 Officer Bernard pursued Russell with his patrol car’s emergency lights and siren on. Russell’s car reached speeds of approximately 100 miles per hour. Officer Bernard observed Russell’s car drift back and forth across the center line of the highway. This caused other vehicles on the road to swerve or pull to the side of the road to avoid colliding with her. ¶6 Russell drove beyond the Reservation boundary into Hill County. She then drove her car off the road, into a ditch, onto a raised railroad track, and back onto the road. Russell’s car sustained a flat tire. Despite this, she continued to drive at high speeds, causing the tire to wear down to an exposed rim and to emit sparks. ¶7 Additional police officers joined the pursuit with their patrol cars’ lights and sirens activated. The pursuing officers observed Russell’s car’s speed fluctuate dramatically. Other vehicles on the road continued to take evasive action as Russell’s car weaved back and forth across the road. One driver drove into a ditch to avoid a collision with Russell’s car. Even with her erratic driving, Russell still used her brakes and turn signal. ¶8 Russell eventually pulled her car to the side of the road and stopped. The pursuing officers arrested her. Upon arrest, the officers noticed that Russell’s speech was slow and slurred, that she struggled to maintain her balance, and that she smelled of alcohol. The officers transported Russell to a detention facility. There, she took a sobriety test and showed further signs of intoxication, including poor motor skills and difficulty following directions. ¶9 Russell asked her arresting officers multiple times why she was in trouble. When an officer explained to Russell why she was under arrest, Russell appeared confused. 4 When the officer asked Russell why she had run from the police, Russell responded that she did not think she had been running. ¶10 The State charged Russell with fleeing from or eluding a peace officer, driving under the influence, and criminal endangerment. At trial, Russell requested a jury instruction on negligent endangerment as a lesser included offense of criminal endangerment. The District Court refused Russell’s proposed instruction. It concluded that the evidence established that Russell acted knowingly when she led the police on a high-speed chase, and it therefore held that the evidence could not support a jury finding that Russell had acted negligently. The jury convicted Russell of all three charged offenses. ¶11 Russell claims that the District Court should have instructed the jury on negligent endangerment and that she is entitled to a new trial on that basis. STANDARDS OF REVIEW ¶12 We review for abuse of discretion a trial court’s refusal to give an instruction on a lesser included offense. State v. Shegrud, 2014 MT 63, ¶ 7, 374 Mont. 192, 320 P.3d 455. A district court abuses its discretion if it acts arbitrarily without conscientious judgment or exceeds the bounds of reason. State v. Stewart, 2016 MT 1, ¶ 13, 382 Mont. 57, 363 P.3d 1140. We review claims of instructional error in a criminal case to determine whether the jury instructions, as a whole, fully and fairly instruct the jury on the law applicable to the case. Shegrud, ¶ 7. 5 DISCUSSION ¶13 Russell argues that the District Court abused its discretion in refusing her proposed jury instruction on negligent endangerment as a lesser included offense of criminal endangerment. She contends that the evidence does not conclusively establish that she was fully aware of the probable outcome of her actions—in other words, that she acted knowingly—but instead that the evidence could have supported a jury finding that she acted negligently. ¶14 Montana law defines criminal endangerment as “knowingly [engaging] in conduct that creates a substantial risk of death or serious bodily injury to another.” Section 45-5-207, MCA. A person acts “knowingly” when the person is aware of a high probability that the person’s conduct will result in death or serious bodily injury to another. Shegrud, ¶ 11; § 45-2-101(35), MCA. A court or jury may not take a defendant’s voluntary intoxication into consideration when determining whether the defendant acted knowingly for the purposes of criminal endangerment. See § 45-2-203, MCA. ¶15 In contrast to criminal endangerment, a person commits negligent endangerment when she “negligently engages in conduct that creates a substantial risk of death or serious bodily injury to another.” Section 45-5-208, MCA. A person acts “negligently” when the person either “consciously disregards a risk” that the person’s conduct will result in death or serious bodily injury to another, or when the person disregards such a risk “of which the person should be aware.” Section 45-2-101(43), MCA; Shegrud, ¶ 11. 6 ¶16 A trial court must grant a request for a lesser included offense instruction when: (1) the offense is actually a lesser included offense of the offense charged, Shegrud, ¶ 9; (2) “there is a proper request by one of the parties” for such an instruction, § 46-16-607(2), MCA; and (3) there is “sufficient evidence” to support an instruction on the lesser included offense, such that “the jury, based on the evidence, could be warranted in finding the defendant guilty of [the] lesser included offense,” Shegrud, ¶ 9 (quoting § 46-16-607(2), MCA). The evidence does not support a lesser included offense instruction on negligent endangerment if it “shows clearly that the defendant acted knowingly” or if “the defendant’s evidence or theory, if believed, would require an acquittal.” Shegrud, ¶ 13. ¶17 Negligent endangerment constitutes a lesser included offense of criminal endangerment. Shegrud, ¶ 12. The record shows that the defendant made a “proper request” for an instruction on negligent endangerment, and the State does not argue otherwise. Section 46-16-607(2), MCA. Nor does either party assert that Russell’s “evidence or theory, if believed, would require an acquittal.” Shegrud, ¶ 13. Instead, the parties dispute only whether, based on the evidence, the jury could have been warranted in finding Russell guilty of negligent endangerment. ¶18 This Court agreed with the defendant in Shegrud that sufficient evidence existed to support a negligent endangerment instruction as a lesser included offense of criminal endangerment. Shegrud, ¶ 16. There, the police approached the driver of a pickup truck at a gas station after reports of a similar-looking truck driving erratically. Shegrud, ¶¶ 3-4. The police noticed that the driver, Shegrud, appeared intoxicated and 7 that his young daughter was seated in the backseat of his truck. Shegrud, ¶ 4. Shegrud admitted to drinking two “tallboy” beers and to taking prescribed oxycodone; blood tests, however, revealed that he was within the legal limits for both. Shegrud, ¶ 5. ¶19 We concluded that Shegrud’s statements that he had consumed prescribed oxycodone and beer “did not clearly establish awareness of a high probability that death or serious bodily injury would be caused by his conduct.” Shegrud, ¶ 14. The fact that Shegrud “did not flee law enforcement or even respond to questioning evasively” suggested further that he did not act knowingly. Shegrud, ¶ 14. We therefore held that the jury, based on the evidence, “could as reasonably have inferred that Shegrud acted negligently as inferred that he acted knowingly.” Shegrud, ¶ 14. ¶20 In contrast, we held in State v. Martinosky, 1999 MT 122, 294 Mont. 427, 982 P.2d 440, that a District Court was correct to refuse the defendant’s proposed jury instruction on negligent endangerment as a lesser included offense of criminal endangerment. Martinosky backed his truck into a parked car outside of a bar, fled the scene of the collision, and ran a stop sign. Martinosky, ¶¶ 5-6. A police officer, using his patrol car’s lights and siren, attempted to pull over Martinosky’s truck. Martinosky, ¶ 6. In response, Martinosky sped up and led the officer on a high-speed chase through a residential area. Martinosky, ¶ 6. He eluded the pursuing officer, crashed his truck into a private home, and abandoned it. Martinosky, ¶¶ 6-7. ¶21 The next day, Martinosky turned himself in to the police. Martinosky, ¶ 7. He admitted that he had been drinking, that he knew he had sped through a residential neighborhood, and that he had fled from the police because he did not want to receive a 8 DUI. Martinosky, ¶ 21. This Court agreed that a negligent endangerment instruction was not justified because Martinosky’s statements and behavior established that he was fully aware of his actions and the probable outcome of those actions; the evidence thus could not support a finding that Martinosky acted negligently. Martinosky, ¶ 22. ¶22 We conclude that this case is more like Martinosky. The record shows that Russell was aware that she was fleeing from the police. When Officer Bernard conducted the initial traffic stop, Russell pulled her car to the side of the road. She spoke with Officer Bernard, she refused his instruction to turn off her engine, she swore at him, and then she sped away. This indicates that Russell knowingly fled the traffic stop, similar to Martinosky’s response to an attempted traffic stop by intentionally speeding away. See Martinosky, ¶¶ 6, 21. ¶23 Russell drove at high speeds away from Officer Bernard and from a number of other police officers. All of the officers pursuing her had activated their cars’ emergency lights and sirens, supporting the District Court’s conclusion that Russell had to have been aware of the officers’ intentions to stop her vehicle. Russell used her brakes and turn signal, illustrating her general awareness while driving. These facts demonstrate Russell’s knowledge that she was driving away from the police officers who were pursuing her, unlike Shegrud, who made no attempts to evade the police. Shegrud, ¶ 14. ¶24 The record establishes further that Russell, unlike Shegrud, was “aware that it [was] highly probable” that her conduct would cause harm to others. Section 45-2-101(35), MCA. She drove at high speeds, she forced oncoming traffic to take evasive measures to avoid colliding with her car, and she drove on a flat tire with an 9 exposed rim. This extreme behavior justified the District Court’s determination that no reasonable jury could have been warranted in finding that Russell acted negligently and without awareness of the risk of harm that her conduct created. ¶25 Because the evidence demonstrates that Russell acted knowingly in engaging “in conduct that create[d] a substantial risk of death or serious bodily injury to another,” § 45-5-207, MCA, the District Court did not abuse its discretion in concluding that the evidence was insufficient to support an instruction on the lesser included offense of negligent endangerment, see Shegrud, ¶ 9. “[T]he jury instructions, as a whole, fully and fairly instruct[ed] the jury on the law applicable to the case.” Shegrud, ¶ 7. We conclude that the trial court did not abuse its discretion in refusing Russell’s proposed instruction. CONCLUSION ¶26 We affirm the District Court’s refusal of Russell’s proposed jury instruction on negligent endangerment as a lesser included offense of criminal endangerment. The judgment is affirmed. /S/ BETH BAKER We Concur: /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JIM RICE

October 25, 2016

319eea9f-d5e7-436c-81ed-c1e765c8a33a

State v. Hoff

2016 MT 244

DA 14-0417

Montana

Montana Supreme Court

DA 14-0417 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 244 STATE OF MONTANA, Plaintiff and Appellee, v. JORY ROBERT HOFF, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDC 2013-247 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Kristen L. Peterson, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Melissa Broch, Deputy County Attorney, Helena, Montana Submitted on Briefs: August 17, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 14-0417 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Jory Robert Hoff (Hoff) appeals from final judgment entered in the First Judicial District Court, Lewis and Clark County, after a jury found him guilty of sexual assault and sexual intercourse without consent. We affirm. ISSUES ¶2 Hoff raises three issues on appeal: 1. Did the District Court violate Hoff’s constitutional right to a public trial when it closed to the public a hearing on the admissibility of the victim’s prior allegations of sexual abuse? 2. Did the District Court err in preventing Hoff from questioning the victim about prior allegations of sexual abuse? 3. Did the District Court err by not disclosing information contained in confidential records after conducting an in camera review? BACKGROUND ¶3 I.L. was born in 2002, and her parents separated soon thereafter. I.L. lived with her mother, except for a period between 2008 and 2010, when I.L. lived on and off with her father, her father’s sister, and her maternal grandparents. In 2011, I.L.’s mother began dating and living with Hoff. I.L.’s mother worked evenings twice a week and left I.L. in the care of Hoff or I.L.’s maternal grandfather on those nights. ¶4 In July 2013, when I.L. was 11 years old, she had an argument with her mother and said she wanted to live with her father. I.L.’s parents arranged for her father to take I.L. to his house, where he lived with his new wife. Because I.L.’s father traveled for work, I.L. was often left in her stepmother’s care. This living arrangement lasted for about two weeks, until I.L’s father and stepmother were both scheduled to travel out of 3 state. I.L.’s stepmother offered to take I.L. with her, but I.L.’s mother refused to give permission to take I.L. out of state. ¶5 Because both her father and stepmother would be away, I.L.’s stepmother told I.L. she would have to go back to her mother’s house. I.L. became upset and started crying. When her stepmother asked what was wrong, I.L. said Hoff had sexually assaulted her when she was staying with Hoff and her mother. I.L.’s stepmother then called the police and relayed what I.L. had said. I.L. underwent a forensic interview two days later, during which she said Hoff had been touching her inappropriately almost every night for two years. Hoff was arrested the day of I.L.’s forensic interview. He has denied that he touched I.L. inappropriately. ¶6 During pretrial discovery, the State and Hoff jointly moved for an in camera review of certain records maintained by the Department of Public Health and Human Services (DPHHS) pertaining to I.L.’s accusations against Hoff. The District Court conducted its in camera review and released relevant records. These records contained references to statements I.L. made when she was four, which accused two other men of sexual assault. Hoff then filed a second motion for in camera inspection of additional DPHHS records regarding these prior accusations. The District Court reviewed and released four more pages of DPHHS records, with redactions. ¶7 Before trial, Hoff requested a preliminary hearing on the admissibility of the prior accusations made by I.L. Hoff maintained those accusations were false and therefore relevant to the veracity of I.L.’s present accusations against Hoff. In State ex rel. Mazurek v. Dist. Court of the Mont. Fourth Judicial Dist., 277 Mont. 349, 357–58, 922 4 P.2d 474, 479–80 (1996), we adopted a three-part test governing the admissibility of prior accusations of sexual assault. That test requires a district court to determine, among other things, that the prior accusations were in fact false. Mazurek, 277 Mont. at 358, 922 P.2d at 480. Hoff requested the Mazurek hearing to give him the opportunity to show the prior accusations were false and therefore admissible at trial. ¶8 On the day of the Mazurek hearing, the State asked the District Court to close the hearing to the public. The State reasoned that the hearing would involve confidential and sensitive records detailing the prior accusations, which necessitated closure to maintain confidentiality. Hoff objected to closing the hearing, arguing that no statute or precedent supported closing the hearing simply because it dealt with sensitive material. Because the whole trial concerned sensitive material, Hoff maintained that the hearing should remain open. Ultimately, the District Court closed the hearing to the public, although witnesses slated to testify at the hearing remained in the courtroom throughout the hearing. ¶9 After the hearing, the District Court issued a written order denying the admission of the prior accusations. The District Court stated: [T]he evidence does not show, as required by Mazurek, that the accusations were in fact false. Further, while the accusations are certainly suspicious and raise question in the Court’s mind, it has not been shown to the satisfaction of this Court that the prior accusations were in fact false. Here, the Court is focusing on Mazurek’s requirement that the accusations be “in fact false.” In the view of this Court, this requirement was fleshed out by the Supreme Court’s holding that the prior assault allegations need to be adjudicated to be false or admitted to be false. Here, there has been no such adjudication or admission. 5 (emphasis in original). Because the District Court found the second condition of Mazurek was not satisfied, it prohibited Hoff from cross-examining I.L. about the prior accusations at trial. ¶10 Following a four-day trial, the jury found Hoff guilty on both counts. STANDARDS OF REVIEW ¶11 This Court’s review of constitutional questions is plenary. State v. Johnson, 2015 MT 221, ¶ 10, 380 Mont. 198, 356 P.3d 438. We review a district court’s evidentiary ruling for an abuse of discretion. State v. MacKinnon, 1998 MT 78, ¶ 12, 288 Mont. 329, 957 P.2d 23. A court abuses its discretion if it “acts arbitrarily without conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice.” State v. Henson, 2010 MT 136, ¶ 19, 356 Mont. 458, 235 P.3d 1274. To the extent a court’s evidentiary ruling is based on an interpretation of a constitutional right, our review is de novo. State v. Patterson, 2012 MT 282, ¶ 10, 367 Mont. 186, 291 P.3d 556. DISCUSSION ¶12 1. Did the District Court violate Hoff’s constitutional right to a public trial when it closed to the public a hearing on the admissibility of the victim’s prior allegations of sexual abuse? ¶13 The Sixth Amendment to the U.S. Constitution provides criminal defendants the “right to a speedy and public trial.” U.S. Const. amend. VI. The public trial right benefits the accused to the extent “the presence of interested spectators may keep his triers keenly alive to a sense of their responsibility and to the importance of their functions.” Waller v. Ga., 467 U.S. 39, 46, 104 S. Ct. 2210, 2215 (1984) (internal 6 quotation omitted). Open proceedings are particularly important in pretrial suppression hearings. Waller, 467 U.S. at 47, 104 S. Ct. at 2216. ¶14 Nevertheless, the right to a public trial may yield to “‘an overriding interest based on findings that closure is essential to preserve higher values and is narrowly tailored to serve that interest.’” Waller, 467 U.S. at 45, 104 S. Ct. at 2215 (quoting Press-Enter. Co. v. Super. Court of Cal., 464 U.S. 501, 510, 104 S. Ct. 819, 824 (1984)). Following Waller, the right to a public trial may give way if: (1) the party seeking to close the hearing advances an overriding interest that is likely to be prejudiced; (2) the closure is no broader than necessary to protect that interest; (3) the court considers alternatives to closing the proceeding that would still protect the interest; and (4) the court makes findings adequate to support the closure. Waller, 467 U.S. at 48, 104 S. Ct. at 2216. ¶15 Preventing the disclosure of sensitive information is a sufficiently strong interest to override the general presumption of openness in trials. Waller, 467 U.S. at 45, 104 S. Ct. at 2215. Few cases present that interest more starkly than the sexual assault of a minor. In Globe Newspaper Co. v. Super. Court, 457 U.S. 596, 102 S. Ct. 2613 (1982), the U.S. Supreme Court noted that “safeguarding the physical and psychological well-being of a minor” is a compelling interest, but held unconstitutional a law that required automatic closure during a minor victim’s testimony. Globe Newspaper Co., 457 U.S. at 607–08, 102 S. Ct. at 2620–21. Instead, courts should consider the nature of the crime, the age and maturity of the victim, and the victim’s wishes before making a case-by-case decision to close the trial for the victim’s testimony. Globe Newspaper Co., 457 U.S. at 608, 102 S. Ct. at 2621. No one factor is determinative, and the decision to 7 close a hearing is ultimately left to the trial court’s discretion. Bell v. Jarvis, 236 F.3d 149, 171 (4th Cir. 2000) (citing Globe Newspaper Co., 457 U.S. at 609, 102 S. Ct. at 2621). ¶16 While the final element of the Waller test requires findings that support closure, the findings do not need to be exceptionally detailed. Rather, the trial court’s findings need only be “specific enough that a reviewing court can determine whether the closure order was properly entered.” Press-Enter. Co., 464 U.S. at 510, 104 S. Ct. at 824; accord Waller, 467 U.S. at 45; Bell, 236 F.3d at 172. ¶17 Hoff argues the District Court’s closure of the Mazurek hearing violated his right to a public trial. Specifically, Hoff contends the State’s interest—protecting the confidentiality of sensitive information that could further injure I.L.—is not substantial enough to justify closure. Even if the interest was substantial, Hoff maintains that the State failed to show, and the District Court failed to find, that the interest was likely to be prejudiced and that there were no reasonable alternatives to closing the hearing. Hoff reasons that leaving the Mazurek hearing open would not jeopardize the State’s interest for two primary reasons. First, significant portions of the hearing concerned topics that did not implicate I.L.’s private information, like the procedures used in DPHHS investigations. Second, those portions of the hearing that did touch I.L.’s private information could be redacted or otherwise anonymized for her protection. ¶18 The right to a public trial clearly attaches to pretrial suppression hearings, including a Mazurek hearing. Thus, Hoff’s right to a public Mazurek hearing will only yield to an overriding interest that satisfies the Waller analysis. Although the District 8 Court’s decision to close the hearing did not set forth detailed findings, we conclude for the reasons set forth below that the District Court did not err in closing the Mazurek hearing. ¶19 The Montana Legislature has created two distinct statutory safeguards against the disclosure of information that could cause further emotional injury to a minor victim of sexual assault. First, DPHHS records and reports concerning child abuse and neglect are deemed confidential by § 41-3-205(1), MCA. These records may be disclosed if, after an in camera review, a court “finds disclosure to be necessary for the fair resolution of an issue before it.” Section 41-3-205(2), MCA. Second, to avoid putting a victim of sexual assault on trial for his or her past conduct, evidence of a victim’s prior sexual conduct is generally inadmissible under the “rape shield statute,” § 45-5-511(2), MCA. Because Mazurek hearings involve evidence of prior sexual conduct that may be protected by the rape shield statute, we anticipated in Mazurek that these hearings would be conducted in camera. Mazurek, 277 Mont. at 358, 922 P.2d at 480. ¶20 In the present case, the State cites both of these statutory provisions as grounds for closing the Mazurek hearing. As made clear in Globe Newspaper Co., shielding I.L. from further psychological injury is a sufficiently compelling interest to justify closure. While Hoff contends the hearing could have remained public with some redactions of the documents to be presented, the District Court had already reviewed the documents in camera and was aware of their contents. We have also reviewed the contents of the confidential documents. We are unconvinced that the records could have been anonymized to protect I.L., as the documents were rife with identifying information. 9 Simply initializing I.L.’s name would not have protected her privacy because her mother testified at the hearing. To go a step further and redact all references to I.L. or her statements would hardly serve Hoff’s purpose of showing I.L. lied in making the prior accusations. We therefore conclude that there were no reasonable alternatives for protecting I.L. ¶21 Hoff requested the Mazurek hearing to explore in detail the facts and circumstances surrounding the prior accusations. At the hearing, Hoff presented DPHHS records and questioned witnesses involved in the investigation of the prior accusations. Invariably, some of Hoff’s evidence focused on the procedures used to investigate the prior accusations. To the extent this foundational evidence addressed investigation procedures in general, the interest in protecting I.L. was not in great jeopardy. Still, the fact that Hoff was required to lay some foundation before exploring the accusations does not mean the District Court should have opened and closed the hearing every time a witness’s testimony shifted in purpose. We do not read Waller to impose such an impractical burden on trial courts. Thus, we conclude the closure was no broader than necessary to protect I.L. ¶22 The District Court closed the hearing after brief oral arguments from both parties. Because the District Court’s decision was not made in writing, the record does not contain many detailed findings. Nevertheless, the record provides sufficient context to show why the District Court closed the hearing. I.L. was four at the time of the prior accusations and eleven at the time of Hoff’s trial. The prior accusations concerned sexual assault of a minor, a crime that demonstrates contempt for the physical and psychological 10 wellbeing of the most vulnerable members of our communities. The record gives no indication of I.L.’s wishes regarding public disclosure of the prior accusations, but Globe Newspaper Co. does not require the court to ascertain a victim’s wishes in every case. The victim’s wishes are one of several factors to be considered, and no single factor is dispositive. Globe Newspaper Co., 457 U.S. at 608, 102 S. Ct. at 2621. In this case, the nature of the crime, the age and maturity of I.L., and the need to safeguard her physical and psychological wellbeing are all factors that favor closing the Mazurek hearing. Because the weight of these factors was apparent when the District Court orally closed the hearing, we see no reason to fault the District Court for not explaining them in detail. As in Bell, the trial judge here “possessed a great deal of information concerning the case before him, and certainly knowledge sufficient to exercise the discretion afforded him under both federal and state law.” Bell, 236 F.3d at 171–72. We therefore conclude the District Court did not err in closing the Mazurek hearing. ¶23 2. Did the District Court err in preventing Hoff from questioning the victim about prior allegations of sexual abuse? ¶24 Criminal defendants have the right to confront witnesses against them. U.S. Const. amend. VI. “‘[L]imiting or barring a defendant’s cross-examination of a complaining witness in a sex crime case where there is evidence of prior false accusations restricts defendant’s enjoyment of the worth of his constitutional rights to confront witnesses.’” Mazurek, 277 Mont. at 358, 922 P.2d at 479 (emphasis added) (quoting State v. Anderson, 211 Mont. 272, 284, 686 P.2d 193, 200 (1984)). If the prior accusations were true, evidence of the accusations would be irrelevant, highly prejudicial, 11 and inadmissible. Mazurek, 277 Mont. at 356, 922 P.2d at 479 (citing Anderson, 211 Mont. at 284, 686 P.2d at 200). A court may only admit evidence of prior accusations if the court first determines: (1) the accusations were in fact made; (2) the accusations were in fact false; and (3) the evidence is more probative than prejudicial. Mazurek, 277 Mont. at 358, 922 P.2d at 480 (citing Miller v. State, 779 P.2d 87, 90 (Nev. 1989)). We have explained the “in fact false” caveat as meaning the accusations must be adjudicated or admitted to be false. Mazurek, 277 Mont. at 359, 922 P.2d at 480. For the purposes of a Mazurek hearing, “adjudicated” does not necessarily mean a court has previously heard evidence and rendered a final judgment on the accusation. Instead, the court conducting the Mazurek hearing may, after hearing sufficient evidence, adjudicate the falsehood of a previous accusation in the Mazurek hearing. Mazurek, 277 Mont. at 357, 922 P.2d at 479. ¶25 I.L.’s prior accusations of sexual assault made when she was four years old were referred to DPHHS. The agency’s reports on the prior accusations indicate a child protection team reviewed the claims. At the Mazurek hearing, a representative from Child Protective Services testified that her department did not investigate the accusations because they did not implicate a parent in the abuse. Instead, the DPHHS reports indicate the accusations were referred to law enforcement for investigation. The record does not show any further action taken by law enforcement. ¶26 Hoff argues the District Court misconstrued the “in fact false” requirement as a strict burden to show a formal adjudication or admission. Hoff calls our attention to language from the District Court’s order, which bears repeating: 12 Here, the Court is focusing on Mazurek’s requirement that the accusations be “in fact false.” In the view of this Court, this requirement was fleshed out by the Supreme Court’s holding that the prior assault allegations need to be adjudicated to be false or admitted to be false. Here, there has been no such adjudication or admission. Hoff asserts that this language shows the District Court expected a formal adjudication or admission. However, full context shows the District Court considered Hoff’s evidence and found it insufficient to conclude the accusations were false. ¶27 If the District Court believed that only formal adjudication or admission could show the prior accusations were in fact false, only two pieces of evidence would be relevant: proof of an adjudication or proof that I.L. admitted the prior allegations were false. Hoff presented no evidence of an admission of falsehood at the hearing, but he did put on evidence from investigators and others in an attempt show the accusations could not be true. Hoff did not argue, nor could he credibly argue, that the actions of DPHHS and law enforcement in investigating allegations of childhood sexual assault constituted an adjudication of the allegations’ truth. Consequently, Hoff’s evidence would be irrelevant and inadmissible if the District Court erroneously believed only a formal adjudication could demonstrate the falsity of the allegations. In fact, the District Court considered Hoff’s evidence. Ultimately, the District Court found the accusations “certainly suspicious,” but concluded this suspicion was not substantial enough to show the accusations were in fact false. ¶28 Because the District Court evaluated Hoff’s evidence in accord with Mazurek, we will overturn its decision to exclude the prior accusations only if we find an abuse of discretion. Hoff presents an array of facts which he believes shows the prior accusations 13 could not be true. We cannot agree that these seven-year-old claims were established to be false, nor does the record before us demonstrate that the District Court exceeded the bounds of reason or acted without conscientious judgment. We therefore conclude that the District Court did not abuse its discretion in denying admission of the prior accusations. ¶29 3. Did the District Court err by not disclosing information contained in sealed records after conducting an in camera review? ¶30 Criminal defendants have a due process right to information that is favorable to their defense and material to guilt or punishment. State v. Johnston, 2014 MT 329, ¶¶ 6-9, 337 Mont. 291, 339 P.3d 829 (citing Pa. v. Ritchie, 480 U.S. 39, 57, 107 S. Ct. 989, 1001 (1987)). In cases involving alleged sexual assault of a minor, this right extends to confidential files compiled by DPHHS. Johnston, ¶¶ 6–9. Evidence “is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different.” Ritchie, 480 U.S. at 57, 107 S. Ct. at 1001. ¶31 After an in camera review of the DPHHS files regarding I.L.’s prior allegations, the District Court withheld certain portions of the files from the parties. Hoff has asked this Court to review the files the District Court kept sealed to determine if they contain information that could be material to Hoff’s defense. We have reviewed the sealed files in camera and determined that they do not contain any new, material information that the parties lacked at trial. The only redactions were for the protection of personally identifiable information. Because there is no reasonable probability that the outcome of 14 Hoff’s trial would have been different with the release of the files, Hoff’s due process right was not violated. See Ritchie, 480 U.S. at 57, 107 S. Ct. at 1001. We therefore conclude that the District Court did not err in keeping the records sealed. CONCLUSION ¶32 For the foregoing reasons, we affirm the judgment of the District Court. /S/ PATRICIA COTTER We Concur: /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

October 4, 2016

12478756-0246-4d0e-b971-1fb38ce16f55

HORACE MANN INSURANCE v HAMPTON

N/A

88-212

Montana

Montana Supreme Court

No. 88-212 IN THE SUPREME COURT OF THE STATE OF MONTANA 1988 HORACE MANN INSURANCE, an Illinois corporation, Plaintiff and Respondent, -vs- MATTHEW HAMPTON, SAFECO INSURANCE COMPANY OF AMERICA, a Washinton corporation, and LAWRENCE BLUNDELL, an individual, Defendants and Appellants. APPEAL FROM: District Court of the Fourth Judicial District, In and for the County of Missoula, The Honorable James B. Wheelis, Judge presiding. COUNSEL OF RECORD: For Appellant: Richard Ranney; Williams Law Firm, Missoula, Montana For Respondent: Kim L. Ritter; Milodragovich, Dale & Dye; Missoula, Montana Submitted on Briefs: Aug. 11, 1988 Decided: January 11, 1989 . \, . . . - .- - - L ED SllITH .-. - -.. d ! ; Clerk Mr. Justice John Conway Harrison delivered the Opinion of the Court. Respondent Horace Mann Insurance filed a declaratory judgment action in the District Court of the Fourth Judicial District of Montana, Missoula County, seeking to avoid coverage under its automobile liability policy issued to Bernard and Claudia Wever. The District Court granted summary judgment in favor of respondent, holding that the terms of the policy were violated when the vehicle was not used within the scope of the owners' consent. We reverse. On the evening of January 21, 1987, near East Missoula, Montana, Matthew Hampton (Hampton) was seriously injured in an automobile accident caused by Lawrence Blundell (Blundell) . Blundell was driving the other vehicle involved in this accident, a 1977 Chevrolet Malibu, owned by Bernard and Claudia Wever. Blundell was under the influence of alcohol, crossed the center line, and struck Hampton's vehicle nearly head-on. The Wever vehicle was insured by Horace Mann. Blundell had no insurance of his own. Blundell was a mechanic and rented a shop building and lot from Sophie Wever, Bernard's mother and de facto owner of the car. Because he was behind in his rent, Blundell agreed with the Wevers to overhaul the engine on the 1977 Chevrolet Malibu in exchange for three months rent credit. On January 21, 1987, at about 5:30 p.m., Blundell took possession of the car at Sophie Wever's house and drove it a short distance to the shop. Blundell expected another customer to pick up a vehicle which would make room for the Wever car at his shop. Blundell waited for approximately one hour but the customer did not arrive. As a result, Rlundell believed it would he u n s a ' e to leave the Wever car at his shop overnight because of possible theft or vandalism. For this reason, and to test drive it for diagnostic purposes, Blundell determined he would drive the car to his home that evening. At about 6:30 p.m., Rlundell drove with his son in the l i l e v e r car to a local tavern. There the two drank beer for several hours and talked. Rlundell then drove his son home and was enroute to his home when the accident occurred about 11:15 p.m. Hampton made claim for his damages against Rlundell and Wevers' liability insurer, Horace Mann Insurance Company. Horace Mann filed this declaratory judgment action against Blundell, Hampton, and Safeco Insurance Company of America (Hampton's uninsured motorist insurer) denying liability coverage to Rlundell based on the omnibus clause in its policy which reads in part as follows: WHO IS AN INSURED? When we refer to your car, a newlv acquired car or a temporary substitute car, insured means: 1. you; 2. your relatives; 3. any other person while using your car if its use is within the scope of your consent; Horace Mann contends the consensual use of the vehicle granted to Rlundell by the Wevers was narrow and that Blundell exceeded the scope of the consent by driving to the tavern for personal purposes and driving while intoxicated. The argument is that the Wevers did not consent to the use of the car for the purpose to which it was applied and for the atrocious behavior of drunk driving and causing an accident. Therefore, the consensual use was extinguished and liability insurance coverage did not extend. The effect of Horace Mann's argument would be that permittee drivers become uninsured motorists when they exceed the scope of their authorized use. The issue on appeal is whether Montana's Mandatory Liability Protection Act, S 61-6-301, MCA, requires automobile liability insurance policies to continue in force and effect for the use by Blundell of Wever's automobile. We answer that it does extend coverage to the minimum statutory requirement. Prior to the enactment of S 61-6-301, MCA, Montana relied solely upon a statutory scheme of insurance protection under what is known as the Financial Responsibility Act, or the "Motor Vehicle Safety-Responsibility Act," S 61-6-101, MCA. Under this act, a driver whose license has been revoked by the state must have proof of financial responsibility as required by the statute. This may be accomplished by filing a certificate of insurance, a bond or a certificate or deposit of money or securities. Section 61-6-132, MCA. In 1979, Montana's Legislature enacted the Mandatory Liability Protection Act which reads in part: 61-6-301. Required motor vehicle insurance. (1) Every owner of a motor vehicle which is registered and operated in Montana by the owner or with his permission shall continuously provide insurance against loss resulting from liability imposed by law for bodily injury or death or damage to property suffered by any person caused by maintenance or use of a motor vehicle, as defined in 61-1-102, in an amount not less than that required by 61-6-103, or a certificate of self-insurance issued in accordance with 61-6-143. The clear purpose of this statute is to protect innocent members of the qeneral public iniured on the highways through the negligence of financially irresponsible motorists. Iowa Mutual Ins. Co. v. Davis (Mont. 1988), 752 P.2d 166, 45 St.Rep. 5 2 4 . As stated in 12A Couch on Insurance 2d (Rev. ed.), 5 45:692, the statute is remedial in nature, and insurance policies issued under this scheme must he liberally construed in light of the clear purpose and public policy of the statute -- to provide compensation to those injured by automobiles. In Transamerica Ins. Co. v. Royle (1983), 202 Mont. 173, 656 P.2d 820, we examined a "household exclusion" in an automobile insurance policy in light of the Mandatory Liability Protection Act language requiring insurance protection against bodily injury and property damage to "any person." We held this statutory language to be an express outlawing of household exclusion clauses. Similarly, in Rill Atkin Volkswagen Inc. v. McClafferty (1984), 213 Mont. 99, 689 P.2d 1237, we held Montana's Mandatory Tiability Protection Act required an automobile dealer's insurance to extend to customers using "loaner cars. " By focusing on the statute's "every owner of a motor vehicle" language, we rejected the argument of the insurance company and held that an automobile dealer, though not an operator, is an owner and therefore required by law to provide liability coverage to its permittees. Most recently, in Iowa Mutual, supra, we carefully examined the validity of a named driver exclusion in light of the Mandatory Liability Protection Act. We concluded that such an attempted exclusion was contrary to public policy and therefore invalid. The analysis made in Iowa Mutual is particularly pertinent to this case. We there pointed out that under Bill Atkin, other than the specific exceptions listed in S 61-6-303, MCA, there were no exceptions to the statutory requirement that "every owner of a motor vehicle registered and operated in Montana by the owner or with his permission [is] to provide insurance for liability caused by maintenance or use of the motor vehicle." Iowa Mutual, 7 5 2 P.2d at 168. In that case we emphasized the statutory requirement for insurance of a vehicle operated with permission unless it met one of the other exceptions. Those exceptions are not applicable to the present case. In Iowa Mutual, we next referred to Bain v. Gl.eason (Mont. 1986), 726 P.2d 1153, 43 St.Rep. 1897, where we stated: In Bain we recognized that "it is the public policy of [the State of Montana] . . . that every owner of a motor vehicle [licensed and] operated in Montana must procure a policy of insurance which continuously provides coverage up to the limits set forth in [ $ 61-6-103, MCA] . Bain, 726 P.2d at 1156. . . Iowa Mutual, 752 P. 2d at 169. This underscored the need for an owner to provide continuous coverage up to the required statutory limits. The insurance carrier argued in Iowa Mutual that the invalidation of the driver exclusion would thwart public policy and create a burden on the insureds. In response to those arguments we then stated: We are convinced that the opposite is true. Our ruling today will eliminate yet another avenue through which the compensation of innocent automobile accident victims can he sidestepped. Our ruling does not, however, prohibit an insurer from entering into agreements with their insureds to limit coverage to the statutory minimum amounts as set forth in $ 61-6-103, MCA. Other states have reached similar conclusions. The enforcement of minimum statutory coverage is mandated by statute in Montana and is a minor burden on insureds when compared to increased protection of the general traveling public. Iowa Mutual, 752 P.2d at 170-71. As we further stated in Iowa Mutual, laws established for the benefit of the public cannot be contravened by private contract. Iowa Mutual, 752 P.2d at 169. When an insurer fails to provide a policy in compliance with the requirements of a statute mandating insurance protection, the courts are forced to reform the policy so that it is in compliance. 12A Couch - on Insurance - 2d (Rev. ed.), § 45:692. We conclude that we shall give effect to the requirement of § 61-6-103, MCA, which requires motor vehicle liability insurance to provide continuous coverage up to the limits of the statute, for every motor vehicle operated with the permission of the owner. Where a driver of a motor vehicle initially obtains control and operates a vehicle with the permission of the owner, we hold that Montana's Mandatory Liability Protection Act requires liability insurance must continue to cover the vehicle even though the permittee may have exceeded the scope of the owner's permission or consent. As we did in Iowa Mutual, we further hold that the enforcement of minimum statutory coverage in Montana is mandated. We recognize that the lower court may wish to reconsider whether permission was given by the insured in a manner sufficient to warrant the extension of liability coverage in excess of the statutory minimum. The judgment is reversed and remanded for further proceedings consistent with this decision. We concur: - Mr. Justice 1,. C. Gulbrandson, a-issenting. I respectfully dissent. In mv view, the maiority, by adopting the "initial permission" test (more colorfully known by many writers as the "Come hell or high water rule") has departed drastically from authority previously enunciated in decisions of this Court, without reference to, or discussion of, those decisions. To illustrate the previous view, two examples should suffice. In Mountain West Farm Bureau v. Farmers Insurance (15,841, 209 Mont. 467, 680 P.2d 330, this Court declared: A complete and unreasonable departure from the intended use, or an intentionally dangerous and wrongful operation could support a ruling that the use was outside of the scope of permitted use as a matter of law. (Emphasis included.) Mountain West, 680 P. 2d at 331. Thereafter, in Farmer's Ins. Exchange v. Janzer (Mont. 1985), 697 P.2d 460, 42 St.Rep. 337, this Court, in commenting on Mountain West, supra, stated: Mountain West involved a question regarding the degree of permission granted. . . This court affirmed the lower court's ruling that Mountain West was the insurer of the defendant for the defense of the action and the payment of any damages arising out of the incident. The instant case, likewise, presents a question involving scope of "permission." (Emphasis added.) Farmer's Ins. Exchange, 697 P.2d at 465-466. The foregoing statements clearly indicated to the bench and bar of this state, in my opinion, that this Court had adopted, or would adopt, some rule other than the "initial permission" rule. The decision to now adopt a minority absolute rule, in the light of contra expressions of this Court, should, in my view be left to the Montana Legislature. I would affirm the judgment of

January 11, 1989

5a5d1ff5-c0ad-44a2-974b-ee0cefba70cf

City of Billings v. Nolan

2016 MT 266

DA 15-0009

Montana

Montana Supreme Court

DA 15-0009 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 266 CITY OF BILLINGS, Plaintiff and Appellee v. DONNIE DERRELL NOLAN, Defendant and Appellant, APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 14-331 Honorable G. Todd Baugh, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad M. Wright, Chief Appellate Defender, Alexander H. Pyle, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Brent Brooks, Billings City Attorney, Melanie S. Jack, Deputy City Attorney, Billings, Montana Submitted on Briefs: August 10, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 15-0009 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Donnie Derrell Nolan (Nolan) was convicted, following a jury trial in the Billings Municipal Court, of reckless driving (in violation of § 61-8-301(1)(a), MCA) and failing to yield to an emergency vehicle (in violation of § 61-8-346(1), MCA). Nolan appealed to the Thirteenth Judicial District Court, Yellowstone County, arguing that the victim’s in-court identification was impermissibly suggestive and unreliable. Nolan also argued that Officer Boeckel’s testimony regarding vehicle registration information received from dispatch was hearsay and inadmissible.1 The District Court, confining its review to the record and questions of law, denied Nolan’s appeal. Nolan appeals the District Court’s order and reinstatement of his sentence. We affirm. ¶2 Nolan presents the following issues for review: 1. Whether the trial court erred in allowing the victim’s in-court identification of Nolan at trial. 2. Whether the trial court abused its discretion when it admitted testimony concerning vehicle registration information received from police dispatch. FACTUAL AND PROCEDURAL BACKGROUND ¶3 On June 20, 2013, Beth Jones was driving west on Rimrock Road in Billings in her red Dodge Charger. Her daughter, Emily, was in the passenger seat. As they turned left onto Rimrock Road, a white car was turning right and honked at them. Beth saw the car take a sudden U-turn and begin traveling in the same direction as she was. Using the center turn lane, the white car sped up to the Jones’ vehicle. The white car then pulled 1 Nolan raised a speedy trial claim in the District Court, but has not pursued it here. 3 even with the Jones’ vehicle and the driver yelled at Beth, “You’re a dead bitch.” The driver yelled this twice. Beth and Emily identified the white car as a four door Cadillac. ¶4 Beth attempted to flee from the Cadillac by speeding up and slowing down erratically. The driver of the Cadillac cut her off and nearly hit Beth’s vehicle several times with his vehicle. Beth honked at other drivers to alert them that she needed help. Beth drove between fifty and seventy miles per hour trying to get away from the Cadillac. Finally, Beth was able to lose the Cadillac by taking a sharp right turn onto a side street. Beth and Emily testified that they were terrified of the driver and thought he was coming after them to hijack their car, hurt them, or both. ¶5 Once they had escaped, Emily called 911 and reported the incident. They described the driver of the white Cadillac as a black male, with short hair, no facial hair, and wearing a white tank-top. During the 911 call Emily and Beth can be heard responding to the emergency operator’s questions. Neither Emily nor Beth was able to get the license plate number of the white Cadillac. Emily estimated the age of the driver to be late twenties or early thirties. Beth interjected that, “He was young.” As Beth and Emily were parked and speaking to the operator, Beth said the Cadillac just drove by heading east on Rimrock Road. ¶6 Jason Jessen (Jessen) was also driving westbound on Rimrock Road and in his rearview mirror he observed a woman driving a red Charger approaching him at a high rate of speed. Jessen noticed the woman honking and waving and saw she was being chased by a man driving a white Cadillac. Jessen pulled to the side of the road to allow the Charger to pass. He observed that the Cadillac was causing on-coming traffic to pull 4 over to avoid a collision. Jessen stated the Cadillac was driving erratically and swerving intentionally to hit the red Charger. Jessen called 911 and reported what he had seen. ¶7 Officer Jeremy Boeckel (Officer Boeckel) of the Billings Police Department heard dispatch report that two cars, a red Charger and a white Cadillac, were racing down Rimrock Road. While driving westbound on Rimrock Road, Officer Boeckel saw a white, four-door Cadillac traveling eastbound. Officer Boeckel, who was able to observe the driver as the Cadillac passed, described the driver as a black male wearing a white tank-top, with short black hair. Officer Boeckel confirmed the description of the vehicle and driver with dispatch as the vehicle involved in the 911 call. Officer Boeckel turned around and activated his lights and siren. For thirteen blocks, the driver continued to drive leisurely, ignoring the sirens, lights, and the addition of other patrol vehicles. During the pursuit dispatch relayed to Officer Boeckel that the Cadillac’s plates came back registered to Sherry Nolan. Officer Boeckel eventually suspended his pursuit upon instructions from his supervising officer and Billings Police Department Policy that officers are not allowed to pursue offenders for traffic offenses. ¶8 Officer Boeckel continued his investigation that day by taking statements from Beth and Emily Jones, Jessen, and talking to other Billing Police Department Officers. After speaking with other officers, Officer Boeckel learned that Nolan frequently drove a white Cadillac. Officer Boeckel viewed a photograph of Nolan and confirmed that the photograph was of the same person that Officer Boeckel had observed driving the Cadillac during the pursuit. Officer Boeckel did not ask Beth or Emily to do a photo 5 lineup, because he was confident of his identification of Nolan based on his own observations. ¶9 Nolan was subsequently charged with reckless driving and failing to yield to an emergency vehicle. On March 20, 2014, Nolan’s jury trial began in Municipal Court. On the morning of trial, Nolan notified the Municipal Court of his hearsay objection to Officer Boeckel’s expected testimony regarding information from dispatch as to whom the Cadillac was registered. The court reserved its ruling for trial. Nolan also raised objections that he would be the only black male in the courtroom and that he would be seated next to defense counsel at the table for the defendant. The judge replied, “[T]here’s nothing I can do about it. What do you want me to do? Get three more defendants in here . . . that are black?” Although Nolan said he did not want any more persons who were black to be brought into the courtroom, he continued to maintain his objection that any identification would be impermissibly suggestive and unreliable. ¶10 The State called four witnesses at trial: Emily and Beth Jones, Jessen, and Officer Boeckel. Neither Jessen nor Emily identified the driver of the Cadillac during their testimony. When Beth identified Nolan at trial, she testified as follows: CITY: [When the Cadillac made the U-turn], did you get a look at the driver? BETH: I got a brief look at him. CITY: And what did he look like? BETH: He looked like a black male in his maybe late 20’s, mid-30s, somewhere around there. . . . CITY: After the initial time that you’d seen him, um, turn right as you were exiting MSU-B, um, did you ever get the opportunity to see his face while this chase was going on? 6 BETH: Every time he’d pull up next to me and blocked me in . . . CITY: Okay. BETH: . . . I would see his face. CITY: Okay, and do you have any way to identify him? BETH: He was a black male that looked like the gentleman sitting over there in the tie and the maroon shirt. CITY: Okay, and why do you say it looks like him? BETH: Because that’s what he looked like. DEFENSE: Your honor, I would object to [this in-court identification] . . . . COURT: Overruled. CITY: Does he look any different today than the way you recalled him from back in June? BETH: Mmm, other than his clothing, no. ¶11 Beth admitted that she could not tell, at the time of the incident, whether the driver was clean shaven or not. When she was questioned about her use of the word “young” to describe the driver during the 911 call she explained, “I just meant he was younger than me.” However, later when asked what she thought “young” meant, Beth said it meant a teenager. ¶12 Officer Boeckel testified that the Cadillac he observed Nolan driving was registered to Sherry Nolan and explained that he had received the registration information from dispatch in response to the license plate information he had supplied. Defense Counsel objected and the court overruled the objection.2 ¶13 The jury convicted Nolan of both offences. Nolan appealed his conviction to the District Court on the basis that the in-court identification by Beth was impermissibly 2 Nolan asserts that Officer Boeckel’s testimony concerning information received from other officers that Nolan was known to drive a white Cadillac was also inadmissible hearsay. However, Nolan did not raise this argument in the District Court and has raised it for the first time in the instant appeal. We decline to address this particular claim for the first time on appeal. State v. Herrera, 1998 MT 173, ¶ 17, 289 Mont. 499, 962 P.2d 1180. 7 suggestive and unreliable, and that the testimony regarding information received from dispatch was hearsay. The District Court denied both claims. Nolan appeals. STANDARD OF REVIEW ¶14 On Nolan’s appeal from the Municipal Court, the District Court functioned as an intermediate appellate court. See §§ 3-5-303 and 3-6-110, MCA. On Nolan’s appeal to this Court, we review the case as if the appeal originally had been filed in this Court. City of Bozeman v. Cantu, 2013 MT 40, ¶ 10, 369 Mont. 81, 296 P.3d 461; State v. Ellison, 2012 MT 50, ¶ 8, 364 Mont. 276, 272 P.3d 646 (citing Stanley v. Lemire, 2006 MT 304, ¶ 26, 334 Mont. 489, 148 P.3d 643). We examine the record independently of the district court’s decision, applying the appropriate standard of review. Ellison, ¶ 8. ¶15 We treat a motion to exclude an eyewitness’ identification as a motion to suppress. State v. Baldwin, 2003 MT 346, ¶ 11, 318 Mont. 489, 81 P.3d 488. Our standard of review for a district court’s denial of a motion to suppress is whether the court’s findings of fact are clearly erroneous, and whether those findings are correctly applied as a matter of law. Baldwin, ¶ 11. ¶16 Evidentiary rulings are reviewed for an abuse of discretion. State v. Hicks, 2013 MT 50, ¶ 14, 369 Mont. 165, 296 P.3d 1149. A trial court abuses its discretion when it “acts arbitrarily without the employment of conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice.” Hicks, ¶ 14. To the extent that the court’s ruling is based on an interpretation of an evidentiary rule or statute, our review is de novo. State v. Derbyshire, 2009 MT 27, ¶ 19, 349 Mont. 114, 201 P.3d 811. 8 DISCUSSION ¶17 1. Whether the trial court erred in allowing the victim’s in-court identification of Nolan at trial. ¶18 Nolan argues that Beth’s in-court identification of him was impermissibly suggestive and unreliable. Although the issue raised here concerns an in-court identification where no pre-trial identification was made, we deem the considerations and analysis the same when determining whether evidence of the identification was properly admitted. ¶19 A defendant’s constitutional right to due process bars the admission of evidence derived from suggestive identification procedures where there is a substantial likelihood of irreparable misidentification. State v. Lally, 2008 MT 452, ¶ 15, 348 Mont 59, 199 P.3d 818 (citing Neil v. Biggers, 409 U.S. 188, 196–98, 93 S.Ct. 375, 380–81 (1972)). We apply a two-step process for determining whether evidence of an identification is admissible. First, we examine whether the identification procedure was impermissibly suggestive. Second, if the procedure was impermissibly suggestive, we must consider several factors for determining whether the identification is nevertheless reliable under the totality of the circumstances. A defendant must establish both that the identification was impermissibly suggestive and that it was unreliable. Lally, ¶ 15. See Biggers, 409 U.S. at 198–99, 93 S.Ct. at 381–82; Baldwin, 2003 MT 346, ¶ 14; State v. DuBray, 2003 MT 255, ¶ 58, 317 Mont. 377, 77 P.3d 247; State v. Bingman, 2002 MT 350, ¶ 21, 313 Mont. 376, 61 P.3d 153. We first consider whether Beth Jones’ identification testimony was impermissibly suggestive. 9 ¶20 A procedure is unnecessarily suggestive if a positive identification is likely to result from factors other than the witness’s own recollection of the crime. United States v. Greene, 704 F.3d 298, 306 (4th Cir. 2013). We have recognized that a “‘show-up’ identification requiring a ‘yes or no’ answer is a far less desirable situation than positively picking out a person from an anonymous line-up.” State v. Rudolph, 238 Mont. 135, 141, 777 P.2d 296, 300 (1989). As we cautioned in Campbell, “law enforcement agencies [are] ill advised to rely solely on one-to-one showups in identifying suspects with a crime.” State v. Campbell, 219 Mont. 194, 201, 711 P.2d 1357, 1362 (1985), cert. denied, 475 U.S. 1127, 106 S.Ct. 1654. ¶21 Nolan, the only black person in the courtroom, was seated at the defense table next to defense counsel when Beth Jones identified him. There was little question that Nolan was the accused and the person that the State and law enforcement suspected of committing the criminal offenses. Under these circumstances, and in the absence of a pre-trial identification, Jones’ identification of Nolan in-court amounted to a “show-up” or “one-to-one” identification, which this Court has condoned on several occasions. See State v. Schoffner, 248 Mont. 260, 266–67, 811 P.2d 548, 552–53 (1991); Campbell, 219 Mont. at 200, 177 P.2d at 1361; State v. Higley, 1990 Mont. 412, 421, 621 P.2d 1043, 1049 (1980). The Second Circuit has found that when a defendant was the only black person in the courtroom, and was seated at the defense table, the in-court identification by three witnesses were “so clearly suggestive as to be impermissible.” United States v. Archibald, 734 F.2d 938, 942-43 (2d Cir. 1984). “Any witness, especially one who has watched trials on television, can determine which of the individuals in the courtroom is 10 the defendant, which is the defense lawyer, and which is the prosecutor.” Archibald, 734 F.2d at 941. The court in Archibald, however, ultimately found that the presence of other factors guaranteed the reliability of the in-court identification and that any error was harmless because the witness had also identified the defendant in photo arrays prior to trial. Archibald, 734 F.2d at 943. ¶22 While we recognize that it is a common practice for an identification to be made in court of the defendant, under the circumstances here, and when the defendant has never been previously identified by the victim, we conclude the in-court identification of Nolan was impermissibly suggestive. Nolan was the only black man in the courtroom; he was the defendant; he was seated next to defense counsel; he was seated at the defense table; and the suspect of the crime was a black male. Further, although the identification made by Jones may not have been in response to a specific question by the prosecutor, we cannot ignore that Jones’ identification of Nolan was critical to the State’s case. Officer Boeckel’s pre-trial identification did not place Nolan at the scene of the offense and only identified Nolan as the driver of a white Cadillac following commission of the offense. We conclude that the circumstances of the in-court identification were unnecessarily suggestive and that Beth’s identification likely could have resulted from factors other than her own recollection of the crime. ¶23 Under the second prong, we must determine whether, under the totality of circumstances, the in-court identification gave rise to a “substantial likelihood of irreparable misidentification.” Schoffner, 248 Mont. at 266, 811 P.2d at 552. Biggers sets forth five factors to be considered in evaluating the likelihood of misidentification: 11 (1) the opportunity for the witness to view the suspect defendant at the time of the crime; (2) the witness’ degree of attention at the time; (3) the accuracy of the witness’ prior description of the suspect defendant; (4) the level of certainty demonstrated by the witness at the time of identification; and (5) the length of time between the crime and the time of identification. Biggers, 409 U.S. at 199-200, 93 S.Ct. at 382; Lally, ¶ 19; Baldwin, ¶ 15. ¶24 Beth had ample opportunity to observe Nolan. She observed Nolan in the middle of the day when the weather was clear and sunny. Beth had her driver’s window down and Nolan’s passenger window was down. No one was seated in the passenger seat of Nolan’s car who could have obstructed Beth’s view of Nolan as he pulled up next to her, and twice yelled she was “a dead bitch.” Nolan positioned his vehicle close enough to nearly hit Beth’s vehicle several times. The incident lasted several minutes and Beth and Emily provided the dispatcher with a description of Nolan immediately. Beth testified that she recalled the events of June 30, 2013 “very well.” She was terrified and believed Nolan was crazy and wanted to either hijack the car, shoot her and Emily, or both. Beth described the color and make of Nolan’s vehicle and the sex, gender, race, and clothing of Nolan. Beth’s description of Nolan and his vehicle were corroborated by not only Emily, but by the subsequent observations of Officer Boeckel just moments later. Beth testified she was certain about her description and identification of Nolan. During direct and cross examination of Beth there was no evidence suggesting she hesitated in her identification of Nolan. Although the length of time between the offense and trial approached nine months, potentially indicating the identification would be less reliable, 12 we do not find the length of time dispositive when viewed in the context of the other Biggers factors. ¶25 Considering the totality of circumstances, we hold that, although impermissibly suggestive, the in-court identification did not create a substantial likelihood of misidentification. Although the District Court did not specifically apply the Biggers factors, it did determine that the identification was “not impermissibly suggestive” and “did not give rise to any mis-identification [sic].” While the District Court erred in finding the in-court identification was not impermissibly suggestive, it correctly determined that the identification was nonetheless reliable. We will affirm a district court when it has reached the right result, even if it has applied the wrong rationale. State v. Betterman, 2015 MT 39, ¶ 11, 378 Mont. 182, 342 P.3d 971. ¶26 2. Whether the trial court abused its discretion when it admitted testimony concerning vehicle registration information received from police dispatch. ¶27 Nolan argues that the information Officer Boeckel received from dispatch concerning the Cadillac’s registered owner was hearsay which does not fall within any exception allowing for its admission. When Nolan appealed his conviction to the District Court, Nolan argued any testimony that Sherry Nolan was the Cadillac’s registered owner was inadmissible because the custodian of records for the Department of Motor Vehicles did not lay a proper foundation for the business records exception to apply. State v. Wurtz, 195 Mont. 226, 238, 636 P.2d 246, 252 (1981). The State maintains that Officer Boeckel’s statements were not hearsay. 13 ¶28 “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. “A statement is hearsay ‘only when the immediate inference the proponent wants to draw is the truth of the assertion on the statement’s face. If the proponent can demonstrate that the statement is logically relevant on any other theory, the statement is nonhearsay.’” Siebken v. Voderberg, 2015 MT 296, ¶ 22, 381 Mont. 256, 359 P.3d 1073, (citing Edward J. Imwinkelried, Evidentiary Foundations, 153 (1980)); Sanchez, ¶ 19. Officer Boeckel’s testimony that the Cadillac was registered to Sherry Nolan was not offered to prove the truth of the matter; that is, that the car was registered to Sherry Nolan. The intent of the statement was to explain how Officer Boeckel proceeded with the investigation and how he came to positively identify Nolan from a prior booking photo. “[A] statement offered for the purpose of showing that the statement was made and the resulting state of mind is properly admitted.” Voderberg, ¶ 22 (citing Moats Trucking v. Gallatin Dairies, 231 Mont. 474, 479, 753 P.2d 883, 886 (1988)); Cartwright v. Scheels All Sports, 2013 MT 158, ¶ 50, 370 Mont. 369, 310 P.3d 1080 (citing Murray v. Talmage, 2006 MT 340, ¶ 13, 335 Mont. 155, 151 P.3d 49). The statement was not offered to prove the registered owner of the Cadillac but, rather, to demonstrate how Officer Boeckel came to positively identify Nolan. The District Court did not abuse its discretion in concluding that the information related to Officer Boeckel from dispatch regarding the registered owner of the Cadillac was admissible. 14 CONCLUSION ¶29 The District Court’s order affirming the Municipal Court’s evidentiary rulings and Nolan’s conviction is affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 25, 2016

5739f9e6-3967-42d0-a80b-3fcf27f106cf

Adoption of L. J.

2016 MT 277N

DA 16-0107

Montana

Montana Supreme Court

DA 16-0107 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 277N IN THE MATTER OF THE ADOPTION OF L.J., a minor child, TAYLOR JOHNS, Petitioner and Appellee, v. KASSANDRA HILL, Respondent and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DA-15-041B Honorable Robert B Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: Scott G. Hilderman, Attorney at Law, Kalispell, Montana For Appellee: Tiffany B. Lonnevik, Lonnevik Law Firm, P.C., Kalispell, Montana Submitted on Briefs: September 28, 2016 Decided: November 1, 2016 Filed: __________________________________________ Clerk 11/01/2016 Case Number: DA 16-0107 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Kassandra Hill (Kassandra) appeals the January 26, 2016 order of the Eleventh Judicial District Court, Flathead County, granting Taylor Johns’s (Taylor) petition for termination of parental rights. We affirm. ¶3 L.J. is the biological child of Kassandra and McKeag Johns (McKeag), born in 2005. Kassandra and McKeag were married in 2003 and divorced in 2008. The Eleventh Judicial District Court finalized the divorce decree and approved the original parenting plan. Initially, Kassandra was the primary residential parent under the plan while McKeag spent alternating weekends plus one mid-week evening with the child. McKeag and Taylor began dating around this time. ¶4 In June 2009, Kassandra and McKeag amended the original parenting plan, increasing McKeag’s parenting time to a minimum of one week per month. In December 2009, McKeag started L.J. in therapy due to concerns over his behavior. Kassandra was aware of L.J.’s counseling, but did not speak to the therapist about his treatment or progress. In February 2010, Kassandra relinquished primary residential custody of L.J. to McKeag for a consecutive six-month period, as reflected in a written agreement between 3 the parents. In March 2010, McKeag and Kassandra agreed to, and the court approved, an amended residential agreement which afforded Kassandra parenting time of one weekend per month. Kassandra married Loren Hill (Loren) the same month. In May 2010, McKeag married Taylor. One month later, L.J. began seeing psychiatric social worker Shawn Trontel to address his severe emotional problems. At the same time, McKeag moved to amend the parenting plan in order to modify child support and reflect that he was now L.J.’s primary parent. ¶5 Between February 2010 and August 2010, Kassandra exercised her parenting time five times and did not contact Ms. Trontel regarding L.J’s emotional well-being. In September 2010, Kassandra attended a contested hearing on McKeag’s motion to amend. Ms. Trontel also testified at the hearing and subsequently submitted letters to the court when she became concerned about L.J.’s mental status. In December 2010, the court granted McKeag’s motion and placed L.J. in his primary residential care. Kassandra was afforded monthly, holiday and summer parenting time and was ordered to pay McKeag $185 per month in child support. Over the next six months, Kassandra did not exercise her monthly and holiday parenting time, and did not inquire about L.J.’s counseling. ¶6 On May 11, 2011, Ms. Trontel submitted a letter to the court, outlining L.J.’s emotional difficulties and recommending that Kassandra’s visits cease until she could establish a more consistent visitation schedule. Based on these recommendations, McKeag moved for, and the District Court granted, an order restricting Kassandra’s time with L.J. to Flathead County, the child’s place of residence. McKeag and Kassandra negotiated a stipulated parenting plan, wherein Kassandra agreed that if she saw L.J. in 4 Montana for six consecutive months, her parenting time would extend to her state of residence (Idaho). Kassandra also agreed to call L.J. every Sunday. During her visits to Montana, Ms. Trontel encouraged Kassandra to meet with her to talk about L.J.’s treatment. Kassandra and Ms. Trontel met for the first time in June 2011. The meeting became contentious when Ms. Trontel asked Kassandra about Loren hitting L.J. on more than one occasion. After Ms. Trontel made two unsuccessful attempts to arrange additional meetings with Kassandra, the two finally met for a second and final time in September 2011. ¶7 On September 28, 2011, Ms. Trontel wrote another letter to the District Court after becoming concerned that L.J. was having a psychotic break. She recommended that L.J.’s contact with Kassandra and Loren be discontinued due to the couple’s inability to understand L.J.’s needs. Kassandra objected to the letter three months later and the District Court entered an order denying her objection in January 2012. The court temporarily suspended Kassandra’s parenting time until she and Loren attended monthly in-person sessions with Ms. Trontel. Kassandra and Loren failed to do so and, over the next four years, Kassandra made no effort to see, telephone, or otherwise contact her son. ¶8 In January and June 2015, McKeag and Taylor asked Kassandra to voluntarily relinquish her parental rights. After she refused the second request, Taylor filed a Petition for Termination of Parental Rights and for Stepparent Adoption on September 1, 2015, which she personally served on Kassandra. On December 21, 2015, the court held a hearing on the matter. Kassandra was represented by counsel and testified at the hearing. 5 ¶9 On January 26, 2016, the District Court issued its findings of fact, conclusions of law, and order, granting Taylor’s petition. The court found Kassandra to be unfit as a parent, based on her willful abandonment of L.J. and delinquency in child support payments. The court also took into account Ms. Trontel’s opinion regarding L.J.’s progress since his mother’s absence; namely, that his condition had improved with medication and the safe, structured environment provided by McKeag and Taylor. The court agreed with Ms. Trontel’s assessment that resuming contact between Kassandra and L.J. would be disruptive to his progress and that terminating Kassandra’s parental rights would be in L.J.’s best interest. Finally, the District Court relied on Ms. Trontel and Taylor’s testimony that L.J. had told them of his wish to be adopted by Taylor. ¶10 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re Adoption of B.W.Z.-S., 2009 MT 433, ¶ 10, 354 Mont. 116, 222 P.3d 613. A district court must make findings of fact and conclusions of law to support any decision to terminate parental rights. Adoption of B.W.Z.-S., ¶ 10. We review any findings of fact made by a district court to determine whether they are clearly erroneous and we review conclusions of law made by a district court to determine if they are correct. Adoption of B.W.Z.-S., ¶ 10. ¶11 Kassandra argues that the District Court abused its discretion when it deemed her unfit because the court relied upon inapplicable case law, failed to accurately apply the statutory requirements for involuntary termination of parental rights, and failed to recognize Kassandra’s fundamental liberty interest in the care and custody of her child. We disagree. 6 ¶12 “A natural parent’s right to the care and custody of a child is a fundamental liberty interest.” In re R.A.J., 2009 MT 22, ¶ 15, 349 Mont. 100, 201 P.3d 787. As such, a party seeking termination of parental rights on the basis that a parent is unfit must prove, by clear and convincing evidence, that the statutory criteria of § 42-2-608, MCA, have been met. See In re R.A.J., ¶ 15. Under § 42-2-607(2), MCA, a parent’s right to a child subject to an adoption proceeding may be terminated if the court makes an unfitness determination under § 42-2-608, MCA. ¶13 For purposes of making a child available for adoption, a parent’s rights may be terminated on unfitness grounds if the parent has willfully abandoned the child. Section 42-2-608(1)(b), MCA. Under § 41-3-102(1)(a), MCA, “abandoned” is defined in relevant part as: (i) leaving a child under circumstances that make reasonable the belief that the parent does not intend to resume care of the child in the future; [or] (ii) willfully surrendering physical custody for a period of 6 months and during that period not manifesting to the child and the person having physical custody of the child a firm intention to resume physical custody or to make permanent legal arrangements for the care of the child[.] ¶14 A court may also terminate parental rights in adoption proceedings if the parent has violated a court order to support the child. Section 42-2-608(1)(d), MCA. However, the permissive nature of the statute means that a court is not required to terminate parental rights on this basis alone; instead, the failure to comply with a court order should be analyzed “tak[ing] into account the totality of the circumstances relevant to a given case.” Adoption of B.W.Z.-S., ¶¶ 19, 24. 7 ¶15 Before a termination finding is made, the respondent parent must be given proper notice and a hearing and, pursuant to the relevant statutory factors found in § 42-2-608(h), MCA, the court must find: (i) by a preponderance of the evidence, it is found that termination is in the best interests of the child; and (ii) upon clear and convincing evidence, it is found that one of the following grounds exists: . . . (B) if the child is in the legal and physical custody of the other parent and a stepparent who is the prospective adoptive parent, that the respondent is not able or willing to promptly establish and maintain contact with the child and to pay for the child’s support in accordance with the respondent’s financial means; (C) placing the child in the respondent’s legal and physical custody would pose a risk of substantial harm to the physical or psychological well-being of the child because . . . the respondent’s behavior . . . since the child’s birth . . . indicates that the respondent is unfit to maintain a relationship of parent and child with the child; or (D) failure to terminate the relationship of parent and child would be detrimental to the child. ¶16 Based on the factors the court considered in this case, we cannot say that the District Court abused its discretion in terminating Kassandra’s parental rights in order to allow L.J. to be adopted by his stepmother. The record demonstrates that Kassandra did not attempt to see or speak to L.J. for over four years prior to Taylor’s petition for termination. Nor did she attempt or evidence an intent to resume physical custody of her son after she relinquished custody to McKeag. Because her actions meet the definition of abandonment under § 41-3-102(1)(a)(i)-(ii), MCA, the District Court did not abuse its discretion when it terminated Kassandra’s parental rights on unfitness grounds. Additionally, given that Kassandra was in arrears in her child support payments at the 8 time of the termination proceedings, the court also correctly found her to be in violation of a court order and unfit on this basis. ¶17 We also conclude that the District Court did not abuse its discretion when it found that termination was in L.J.’s best interest. The record contains clear and convincing evidence to support the court’s findings as it pertains to Kassandra’s extended absence, lack of financial support, and the detrimental effect Kassandra’s reappearance would have on L.J.’s physical and psychological well-being. In light of the circumstances of this case and considering the fundamental liberty interest at stake, we conclude that the court acted within its discretion in granting Taylor’s petition to terminate Kassandra’s parental rights. ¶18 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, this case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s ruling was not an abuse of discretion, its findings of fact were not clearly erroneous, and its interpretation and application of the law was correct. ¶19 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON

November 1, 2016

c44841bb-b6e3-4b0f-ba58-c9393a1a1dcd

State v. Items of Property

2016 MT 280

DA 14-0299

Montana

Montana Supreme Court

DA 14-0299 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 280 STATE OF MONTANA, Petitioner and Appellee, v. ITEMS OF REAL PROPERTY OWNED AND/OR POSSESSED BY MIKE CHILINSKI, Respondent and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and For the County of Jefferson, Cause No. DV-2013-31 Honorable Loren Tucker, Presiding Judge COUNSEL OF RECORD: For Appellant: Christian D. Tweeten, Tweeten Law, PLLC, Missoula, Montana For Appellee: Steven C. Haddon, Jefferson County Attorney, Boulder, Montana Submitted on Briefs: August 24, 2015 Decided: November 1, 2016 Filed: __________________________________________ Clerk 11/01/2016 Case Number: DA 14-0299 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Article II, Section 26 of the Montana Constitution guarantees to individuals that the right to a jury trial is “secured to all and shall remain inviolate.” However, this inviolate right encompasses only non-equitable causes of action to which the right had already attached at common law when the Montana Constitution was adopted. At issue here is whether the right to a jury trial attaches to an in rem forfeiture proceeding arising from the alleged use of real property to manufacture dangerous drugs, but nonetheless unconnected to a state drug prosecution. The District Court ruled the right did not attach because a civil in rem forfeiture proceeding was an action in equity. Upon this basis, the court denied Chilinski’s request for a jury trial in a civil proceeding to forfeit his home and four parcels of land. We reverse. FACTUAL AND PROCEDURAL BACKGROUND ¶2 In 2011, state authorities successfully prosecuted and incarcerated Chilinski for cruelty to animals. Crucial to that prosecution was the Jefferson County Sheriff’s search of Chilinski’s four parcels of property, including his residence, for evidence relating to his inhumane treatment of dogs. That search, conducted pursuant to a warrant, revealed not only an unlawful and cruel dog-breeding operation, but plain-view evidence of marijuana cultivation. ¶3 After discovering the marijuana grow operation, county authorities continued looking for evidence of animal cruelty, but also alerted the Southwest Montana Drug Task Force to the marijuana cultivation. The Task Force then procured its own warrant and conducted its own search, separate from the county authorities investigating 3 violations of animal cruelty. The Task Force’s search for evidence of dangerous drugs, which later expanded under a second warrant, allegedly uncovered more than three hundred marijuana plants and over three pounds of processed marijuana on Chilinski’s property. ¶4 As a result of these discoveries, the State initiated a forfeiture proceeding in October of 2011 against Chilinski’s property, but the scale of his alleged grow operation drew the attention of federal authorities. The State suspended its proceeding against Chilinski on July 31, 2012, in deference to the United States bringing an earlier action on May 2, 2012. The federal indictment charged Chilinski with production of dangerous drugs and included a forfeiture provision. The record indicates Chilinski was convicted of manufacturing marijuana in the United States District Court for the District of Montana, but that federal authorities abandoned the accompanying forfeiture action for unknown reasons. ¶5 After the federal prosecution for forfeiture of Chilinski’s property had been abandoned, the State resumed its civil forfeiture proceedings in June of 2013 pursuant to § 44-12-201, MCA (2013), et seq.—Montana’s civil forfeiture statute. This statutory scheme allowed for property used in the manufacture of dangerous drugs to be seized upon a showing of probable cause, and then forfeited to the state following a summary hearing. Importantly, the statute mandated that the proceeding be heard only before a 4 judge, precluding the use of a jury.1 In its 2015 session, the Legislature repealed this provision and replaced it with § 44-12-207, MCA, et seq., which does not mandate that the trial be before a judge. ¶6 At Chilinski’s forfeiture hearing held in the Fifth Judicial District Court on January 22, 2014, Chilinski appeared pro se and presented a multitude of theories why he should not lose his property. Although his presentation was disjointed and incoherent, his most cogent and meritorious argument was that the forfeiture statute violated his right to a jury trial guaranteed to him by Article II, Section 26 of the Montana Constitution and the Seventh Amendment to the United States Constitution. Chilinski clearly requested in his complaint a jury trial “on all issues so triable,” and argued that these constitutional provisions entitled him to a trial by jury before his property could be forfeited to the state. At the hearing, the court explained to Chilinski that the State’s complaint for civil forfeiture was based in equity and that, therefore, Chilinski had no right to be heard by a jury. The court reasoned that the proceeding was to determine title, which was an equitable action and thus outside the scope of the right to a jury trial. The District Court conducted the hearing without a jury and concluded that Chilinski used his property to assist in the production and manufacture of illegal drugs. The District Court forfeited Chilinski’s property to the State. Chilinski appeals the court’s denial of his right to a jury trial. For purposes of appeal, this Court appointed counsel on Chilinski’s behalf, who has 1 Section 44-12-203(3), MCA (2013), provides “[i]f 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.” 5 appeared pro bono.2 Having found adequate grounds pursuant to Article II, Section 26 of Montana’s Constitution to grant Chilinski the right to a jury trial, we decline to examine the same right as it might exist under the Seventh Amendment to the United States Constitution. We restate the issue as follows: Whether § 44-12-203(3), MCA (2013), violates Article II, Section 26 of Montana’s Constitution by depriving individuals of the right to a trial by jury. STANDARD OF REVIEW ¶7 This Court’s authority to review constitutional questions is plenary. Williams v. Bd. of Cnty. Comm’rs., 2013 MT 243, ¶ 23, 371 Mont. 356, 308 P.3d 88. Legislative enactments are presumed to be constitutional, and the party challenging the provision has the burden of proving beyond a reasonable doubt that it is unconstitutional. Williams, ¶ 23. We review a district court’s conclusions regarding the constitutionality of a statute for correctness. Williams, ¶ 23. DISCUSSION ¶8 This Court has not previously considered the constitutionality of that part of § 44-12-203(3), MCA (2013), which denies a jury trial in forfeiture proceedings. It is well-established that although Article II, Section 26 of Montana’s Constitution provides that “[t]he right of trial by jury is secured to all and shall remain inviolate,” the right to jury trial encompassed by § 26 embraces only those causes of action “in which the right was enjoyed when the constitution was adopted.” Supola v. Mont. DOJ, Drivers License Bureau, 278 Mont. 421, 424-25, 925 P.2d 480, 482 (1996) (quoting In re C.L.A., 211 2 Chilinski, in a civil forfeiture proceeding, is not entitled to a Public Defender, in either the trial proceeding or on appeal. Section 47-1-104, MCA. 6 Mont. 393, 396, 685 P.2d 931, 933 (1984)). Montana’s 1889 Constitution codified and preserved all existing common law rights to a jury trial. Those rights were then re- codified and protected in Section 26 of Montana’s 1972 Constitution. In re C.L.A., 211 Mont. at 396, 685 P.2d at 933. In Supola, we rejected the petitioner’s claim that § 26 provides a right to jury trial in every controversy and recognized that a party has never had a jury trial right in a purely equitable action. Supola, 278 Mont. at 425, 925 P.2d at 482. In Supola, we examined the 1972 constitutional convention history of Section 26 and observed that delegates at the 1972 convention proposed an amendment which would have extended the Section 26 guarantee to actions in equity, but that the amendment failed on the floor. Supola, 278 Mont. at 424-25, 925 P.2d at 482. ¶9 While we confirmed in Supola that Section 26 does not apply to purely equitable actions, we recognized that issues of both equity and law could become intertwined in the same action, making it difficult to preserve the right to jury in non-equitable claims. Supola, 278 Mont. at 425, 925 P.2d at 482. The distinctions between law and equity originate from the bifurcated judiciary of England, where, prior to the modern era, chancery courts sat in equity, while the King’s Bench and other courts sat in law. Equity courts were usually ecclesiastically-based and keepers of “the king’s conscience,” providing ethical or morality-based remedies in the absence of an adequate remedy at law. These once disparate tribunals, equity courts and courts of law, are said to have since “merged” in the United States, and there is now only a single judiciary that sits in both law and equity. See Fleming James, Jr., Right to a Jury Trial in Civil Actions, 72 Yale L.J. 655, 655-75 (1963); and United States v. One 1976 Mercedes Benz, 618 F.2d 7 453, 457 (7th Cir. 1980). Nonetheless, where legal and equitable claims are bound together in the same case, the right to a jury trial attaches to the legal claims, and “must not be infringed either by trying the legal issues as incidental to equitable ones or by a court trial of a common issue between the claims.” Supola, 278 Mont. at 425, 925 P.2d at 482 (quoting Gray v. City of Billings, 213 Mont. 6, 13, 689 P.2d 268, 272 (1984); Ross v. Bernhard, 396 U.S. 531, 537-38, 90 S. Ct. 733, 738 (1970)). Supola thus provides that while Section 26 does not apply to an action purely in equity, the right to a jury trial on legal issues remains inviolate and may not be compromised because it is combined with equitable issues in one action. Accordingly, Section 26 may be constrained in only two ways: (1) it does not apply to purely equitable actions; and (2) it does not apply to those actions at law that did not have the right to a jury trial associated with them prior to the adoption of the 1889 constitution. I. Whether the statutory forfeiture proceeding here is purely in equity. ¶10 The District Court held Chilinski was not entitled to a jury trial because the proceeding was limited to a determination of title which, the District Court concluded, was a cause of action based purely in equity. We first observe that generally, where title and possession to real property are at issue, the action is legal and entitles a party to a jury trial. “It has always been the rule in this jurisdiction, both under the territorial and state governments, that where the right of possession to real estate is at issue, whether the action be based upon a claim of legal title, or upon a mere possessory right, either party is entitled to a trial by jury. Such an action is strictly one at law.” Mont. Ore Purchasing Co. v. Boston & Mont. Consol. Copper & Silver Mining Co., 27 Mont. 536, 538, 71 8 P. 1005, 1006 (1903). Even though the equitable power of the court may be invoked to aid an action at law by removing, for example, some obstruction to the legal title or by preserving the property pending ascertainment of the title, the action remains one at law. Mont. Ore Purchasing, 27 Mont. at 536, 71 P. at 1005. We therefore disagree that this proceeding is purely equitable or that it is appropriately characterized as involving only a determination of title. The nature of the instant proceeding requires more than such a cursory examination. In conducting our own detailed examination of the action, we note that forfeiture statutes operate to transfer property rights to the state, as a penalty against the owners for misuse of the property. The District Court here placed too narrow an interpretation on the issue by characterizing the proceeding as only one of determining title. II. Did the right to a jury trial exist at common law for civil in rem proceedings prior to the 1889 ratification of Montana’s Constitution? ¶11 While this proceeding has attributes of a criminal action and is intertwined with the underlying criminal prosecution, the complaint does not charge a criminal offense and is more appropriately described as a proceeding in rem against Chilinski’s property. See State ex rel. Prato v. District Court, 55 Mont. 560, 565, 179 P. 497, 499 (1919). As such, Mont. Ore Purchasing, which addresses title and right of possession, is not controlling. Neither Chilinski nor the State offer any dispositive authority in Montana on the question of whether there is a right to a jury trial for civil in rem forfeiture actions, nor has our independent research unearthed any controlling Montana precedent. We explained, however, in Mont. Ore Purchasing that, 9 It must not be overlooked that the right of trial by jury guarantied [by the Seventh Amendment to the United States Constitution] is the right as it existed at the common law; that is, in that class of cases in which there was no impediment in the way of complete and adequate redress by proceeding according to the course of the common law. Mont. Ore Purchasing, 27 Mont. at 540-41, 71 P. at 1007. Clearly, in rem forfeiture proceedings existed in the common law, under English and American practice, at the time Montana’s 1889 Constitution was ratified. Furthermore, it is the historical right of trial by jury enjoyed at the time Montana’s Constitution was ratified in 1889 which is preserved. Supola, 278 Mont. at 424-25, 925 P.2d at 482. We recognize that the right to a jury trial under the Seventh Amendment to the United States Constitution is not applicable to the states. However, the underlying analysis and rationale employed in federal courts and other states when deciding whether a right to jury trial exists in civil forfeiture proceedings is helpful to our inquiry. It is necessary, therefore, to ascertain what the rule of the English common law upon this subject was in 1889, and we look to federal jurisprudence and our sister states for guidance. ¶12 In 1776, forfeiture existed in England both at common law and by statute. At common law, an inanimate object described as “deodand” could be forfeited for causing a person’s death. Also at common law, property could be forfeited on the owner’s conviction of treason or a felony. English law provided for statutory forfeitures of objects used in the violation of customs and revenue laws. Austin v. United States, 509 U.S. 602, 611-13, 113 S. Ct. 2801, 2806-07 (1993). Prior to the American Revolution, jurisdiction over the forfeiture of objects used in violation of law was exercised by the English Court of Exchequer and the Admiralty Court. C.J. Hendry Co. v. Moore, 318 10 U.S. 133, 137, 63 S. Ct. 499, 501 (1943). Cases in Admiralty Court proceeded without a jury; in contrast, cases in the Court of Exchequer proceeded before a jury. See One 1976 Mercedes Benz, 618 F.2d at 464 (The distinction between practicing in courts of Admiralty, where forfeiture actions were heard without a jury, and practicing in the common law courts of Exchequer, where forfeiture actions were routinely before a jury, is well-known.); People v. One 1941 Chevrolet Coupe, 231 P.2d 832, 839 (Cal. 1951) (“There are reports of many cases in the Court of Exchequer in which articles used in violation of law were forfeited to the Crown pursuant to statute, in all of which the cause was tried by jury.”); Commonwealth v. One (1) 1984 Z-28 Camaro Coupe, 610 A.2d 36, 41 (Pa. 1992) (“[I]n England, forfeiture actions in the Courts of Exchequer were tried before a jury, and in the United States, forfeiture actions were heard before juries in cases where courts of Exchequer would have had jurisdiction.”); C.J. Hendry, 318 U.S. at 137, 63 S. Ct. at 501 (“Forfeiture to the Crown of the offending object, because it had been used in violation of the law, by a procedure in rem was a practice familiar not only to the English admiralty courts but to the court of Exchequer.”). In time, following the historic struggle between admiralty and common law courts, courts of Exchequer began to exercise concurrent jurisdiction with the admiralty courts even for in rem proceedings for the forfeiture of vessels on navigable waters. ¶13 The American colonies did not establish a Court of Exchequer. Instead, the common law courts absorbed that court’s jurisdiction. C.J. Hendry, 318 U.S. at 139, 63 S. Ct. at 502-03. Consequently, American colonial courts, sitting as common law courts, generally heard actions involving forfeitures on land. See Austin, 509 U.S. at 613, 113 11 S. Ct. at 2807 (“‘[l]ong before the adoption of the Constitution the common law courts in the Colonies . . . were exercising jurisdiction in rem in the enforcement of [English and local] forfeiture statutes’”) (quoting Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 683, 94 S. Ct. 2080, 2091 (1974)); C.J. Hendry, 318 U.S. at 143, 63 S. Ct. at 505 (“[T]here is ample support for the conclusion that in the seaboard states forfeiture proceedings in rem . . . were an established procedure of the common law courts before the Revolution.”); One 1976 Mercedes Benz, 618 F.2d at 466 (“The conclusion appears inescapable that both English and American practice prior to 1791 definitely recognized jury trial of in rem actions at common law as the established mode of determining the propriety of statutory forfeitures on land for breach of statutory prohibitions.”); One 1941 Chevrolet, 231 P.2d at 842 (“The common-law courts in the Colonies and in the states during the period of Confederation exercised jurisdiction in rem in the enforcement of forfeiture statutes. In general the actions . . . were tried by jury. . . .”); One 1984 Z-28 Camaro Coupe, 610 A.2d at 41 (“[I]n the United States, forfeiture actions were heard before juries in cases where Courts of Exchequer would have had jurisdiction.”). If the forfeiture took place on navigable waters, either the admiralty or common-law courts had jurisdiction. C.J. Hendry, 318 U.S. at 139, 63 S. Ct. at 503; Franklyn C. Setaro, The Formative Era of American Admiralty Law, 5 N.Y.L.F. 9, 26 (1959). Like English common-law courts, and unlike admiralty courts, colonial common-law courts provided for trial by jury. C.J. Hendry, 318 U.S. at 139-40, 63 S. Ct. at 503. ¶14 In addition to federal courts, state courts considering in rem forfeiture statutes similar to Montana’s statute have reached similar conclusions. The Idaho Supreme Court 12 explained that statutory forfeiture actions existed in both English and American practice and thus provided for a trial by jury when the Idaho constitution was adopted in 1889. Idaho Dep’t of Law Enforcement by & ex rel. Cade v. Real Prop. Located in Minidoka Cnty., 885 P.2d 381, 386 (Idaho 1994). The South Dakota Supreme Court invalidated a forfeiture statute substantially similar to § 44-12-203(3), MCA (2013), rejecting the state’s argument that because the drug forfeiture statute did not exist at the time the constitution was adopted, the defendant was not entitled to a jury trial. State v. One 1969 Blue Pontiac Firebird, 737 N.W.2d 271, 277 (S.D. 2007). In Florida, the Supreme Court adopted the historical analysis of One 1976 Mercedes Benz and concluded that common law courts in 1845 recognized the right to a jury trial in civil forfeiture proceedings. In re 1978 Chevrolet Van, 493 So.2d 433, 436 (Fla. 1986). In State v. One 1990 Honda Accord, the New Jersey Supreme Court found drug forfeiture cases allowed for a jury trial even though “forfeiture never existed at common law [in New Jersey] and remains a disfavored remedy.” State v. One 1990 Honda Accord, 712 A.2d 1148, 1150 (N.J. 1998). The New Jersey court explained, Although forfeiture depends on a statute for its existence, it remains subject to common-law principles. When analyzing the right to trial by jury, the term “common law” refers to those principles of English law that evolved in the common-law courts such as the Court of the Exchequer, as opposed to those applied in the Admiralty, Chancery, or Ecclesiastical Courts. People v. One 1941 Chevrolet Coupe, 37 Cal. 2d 283, 231 P.2d 832, 836 (1951); In re Forfeiture of 1978 Chevrolet Van, 493 So.2d 433, 435 (Fla. 1986); Commonwealth v. One 1984 Z-28 Camaro Coupe, 530 Pa. 523, 610 A.2d 36, 39 (1992); see also William B. Stoebuck, Reception of English Common Law in the American Colonies, 10 Wm & Mary L. Rev. 393 (1968) (“‘Common law’ refers to that body of governing principles, mainly substantive, expounded by the common-law courts of England in deciding cases before them.”). Hence, the fact that common-law forfeiture did not 13 become part of New Jersey common law does not predetermine whether statutory forfeiture was subject to trial by jury in the colonial common-law courts. The subject forfeiture, which involves the seizure on land of innocent property, is the type of case in which the owner would have been entitled to a jury trial in the common-law courts of colonial New Jersey. One 1990 Honda Accord, 712 A.2d at 1150-51 (emphasis added). ¶15 Lastly, Blackstone discussed property forfeiture and the right to trial by jury in some detail. The forfeiture of property, even chattels, was a penalty reserved for only the most serious of crimes. Forfeiture of land was particularly reserved for treason, felony, and other infamous crimes. 2 Blackstone ch. 18, 268. And for such crimes at common law, the right to a jury trial attached. “Our law has therefore wisely placed . . . a trial by jury, between the liberties of the people, and the prerogative of the crown.” 4 Blackstone Ch. 27, 350. Blackstone cautioned too, that the right of trial by jury might one day be compromised “by introducing new and arbitrary methods of trial by justices of the peace, commissioners of the revenue, and courts of conscience” in order to avoid proceedings that were cumbersome, expensive, inconvenient, or time-consuming; however, he warned that “delays and little inconveniences in the forms of justice, are the price that all free nations must pay for their liberty in more substantial matters.” 4 Blackstone Ch. 27, 350-51. ¶16 After consideration of both American and English common law, federal jurisprudence, and decisions from our sister states that have considered the issue in cases involving similar statutes, we join the majority of states and federal courts and conclude 14 that there is a right to trial by jury guaranteed by Section 26 of Montana’s Constitution in an in rem forfeiture proceeding under § 44-12-201, MCA (2013), et seq.3 ¶17 We are compelled, nonetheless, to address the State’s various arguments. The State maintains ratification of Montana’s Constitution in 1972 predated enactment in 1979 of § 44-12-201, MCA (2013), and, therefore, a right to a jury trial could not have been “re-codified” in Section 26 of the 1972 Constitution. Additionally, the State argues, relying on Kelly, that a civil forfeiture proceeding is distinct from a criminal prosecution because it is a summary proceeding for which there was no trial by jury under the common law as “a matter of right.” ¶18 The contention that a statutory provision, because it was enacted after ratification of the Montana Constitution in 1972, precludes the right of a jury trial from attaching to the statute’s provisions, places too narrow an interpretation upon the issue. The issue is not when the statute was enacted, but rather, whether forfeiture proceedings existed generally at common law and whether civil forfeiture proceedings were in “the class of cases in which the right was enjoyed when the constitution was adopted.” Supola, 278 Mont. at 424-25, 925 P.2d at 482, citing In re C.L.A., 211 Mont. at 396, 685 P.2d at 933. Our inquiry is not informed by whether an action at common law was subsequently 3 We recognize and have considered the rationale of those states finding there was no right to trial by jury in civil in rem forfeiture proceedings, namely: North Dakota, Minnesota, North Carolina, Tennessee, Georgia, Michigan, and Alabama have found a jury trial is not required in civil forfeitures. See State v. $ 17,515.00 in Cash Money, 670 N.W.2d 826, 828 (N.D. 2003); State v. One 1921 Cadillac Touring Car, 195 N.W. 778, 780 (Minn. 1923); State v. Morris, 405 S.E.2d 351, 352-53 (N.C. App. 1991); Helms v. Tenn. Dep’t of Safety, 987 S.W.2d 545, 547-49 (Tenn. 1999); Swails v. Georgia, 431 S.E.2d 101, 103 (Ga. 1993), cert denied, 510 U.S. 1011, 114 S. Ct. 602 (1993); In re Forfeiture of $ 1,159,420, 486 N.W.2d 326, 337 (Mich. App. 1992), cert denied sub nom., Hawkins v. Michigan, 510 U.S. 867, 114 S. Ct. 189 (1993); In re One Chevrolet Auto., 87 So. 592, 592-93 (Ala. 1921). 15 embodied by statute, be it a drug forfeiture statute or some other forfeiture statute. Although forfeiture proceedings may depend on a statute for existence, the inquiry is whether forfeiture existed at common law to which the right to a jury trial attached and not the date upon which the cause of action was embodied by statute. ¶19 The State’s reliance on Kelly in support of its argument that there is no right to a jury trial in a forfeiture proceeding because it is summary in nature, is misplaced. In Kelly, the Court addressed whether forfeiture of seized liquors should be determined by a jury. Kelly, 57 Mont. at 127-30, 187 P. at 637-38. Kelly, however, dealt with the rights of a party claiming property that was contraband itself—alcohol—and possessed in violation of the Prohibitory Enforcement Act. The Court explained that from the time of seizure, the liquors are in the custody of the state, and if a violation of the liquor laws has occurred, then the liquor is “contraband,” subject to forfeiture, “and the question of ownership is altogether immaterial.” Kelly, 57 Mont. at 129, 187 P. at 638. Although the proceeding was “against the liquors themselves for their condemnation as forfeited property” and characterized by the Court as an in rem summary proceeding, the Court explained, “[i]t would not be questioned by anyone that if forfeiture of the liquors were a part of the penalty imposed upon a defendant for a violation of the law, the right of trial by jury would obtain . . . .” Kelly, 57 Mont. at 130, 187 P. at 638. ¶20 We find Kelly distinguishable from the facts and circumstances here. First, Kelly dealt with a different class of property, prima facie contraband, and not “innocent” property which has been or is intended to be utilized in furtherance of an unlawful activity. Courts have recognized such a distinction and found that the seizure of innocent 16 property, as compared to the seizure of contraband, “is the type of case in which the owner would have been entitled to a jury trial in the common-law courts . . . .” One 1990 Honda Accord, 712 A.2d at 1151. Under the English common law, “cases involving the forfeiture of innocent property generally resulted in a trial by jury.” One 1990 Honda Accord, 712 A.2d at 1157. ¶21 Second, § 44-12-102(i), MCA (2013), provides that real property which “is directly used or intended to be used in any manner or part to commit or facilitate . . . a violation of Title 45, Chapter 9, that is punishable by more than 5 years in prison” is subject to forfeiture.” (Emphasis added.) Unlike in Kelly, where the liquor itself was contraband (similar to Chilinski’s marijuana plants being contraband), property subject to forfeiture pursuant to § 44-12-102(i), MCA (2013), is directly tied to an enhanced penalty provision of the underlying criminal statutes. The criminal nature of the forfeiture proceeding is thus inescapable. It is further exemplified by § 44-12-103, MCA (2013), providing for the manner in which property may be seized: (1) A peace officer who has probable cause to make an arrest for a violation of Title 45, chapter 9, probable cause to believe that a conveyance has been used or is intended to be used to unlawfully transport a controlled substance, or probable cause to believe that a conveyance has been used to keep, deposit, or conceal a controlled substance shall seize the conveyance used or intended to be used or any conveyance in which a controlled substance is unlawfully possessed by an occupant. [(Emphasis added.)] In examining these forfeiture provisions, it is hard to ignore their penological basis. But for the forfeiture statute’s placement outside the provisions of the criminal code in Title 45, forfeiture would be inseparable from the penalty imposed in the underlying criminal prosecution. 17 ¶22 Upon review of the record, it is clear that the remedy the State sought, forfeiture of Chilinski’s property, had as its purpose the imposition of a penalty. In its “Notice to Defendant Re: Criminal Charges,” the State represented that it “does not intend to proceed criminally against Defendant for his underlying conduct . . . [of] criminal manufacture of dangerous drugs, if the civil forfeiture process is successful. [And the State] specifically represents it will pursue no further criminal charges against Defendant for his conduct giving rise to his animal cruelty convictions.” The State’s position suggests it was pursuing a statutory forfeiture proceeding in lieu of a criminal prosecution against Chilinski; that is, that the forfeiture proceeding would protect the State’s penological interest in Chilinski. The State’s actions were consistent with the purpose underlying the statute. A review of the legislative history of § 44-12-201, MCA (2013) et seq., reveals that the purpose behind the act was to provide “an added tool” for law enforcement. Minutes on Consideration of Senate Bill 482 Before the S. Judiciary Committee, 46th Leg. Sess. (Mont. 1979). Where the underlying purpose of an action serves as a penalty, the action is not in equity. See Supola, 278 Mont. at 426, 925 P.2d at 482 (where a driver’s license suspension statute and hearing had no penological purpose, it denoted a proceeding in equity); Kelly, 57 Mont. at 130, 187 P. at 638 (when a forfeiture is part of the penalty imposed upon a defendant for violation of the law, the matter is not in equity and the right of trial by jury attaches). ¶23 Our determination that Section 26 of the Montana Constitution guarantees a right to jury trial for civil in rem forfeiture proceedings does not require that the forfeiture proceeding against Chilinski be dismissed. When only a portion of a statute is 18 unconstitutional and the remainder would still fulfill the statute’s underlying legislative intent, the unconstitutional portion may be stricken in accordance with principles of statutory interpretation, leaving the remaining constitutional portions of the statute enforceable and intact. Williams, ¶ 24; Mont. Auto. Ass’n v. Greely, 193 Mont. 378, 399, 632 P.2d 300, 311 (1981). Section 44-12-203(3), MCA (2013), which denies a jury trial, is not an indispensable part of the statute and may be stricken therefrom. The remainder of the statute is fully operative in the absence of that portion and we express no opinion as to the constitutionality of sections not before us on appeal. CONCLUSION ¶24 Section 44-12-203(3), MCA (2013), denied Chilinski the right to be tried by a jury, in violation of the guarantee to trial by jury provided by Article II, Section 26 of the Montana Constitution. The District Court erred when it denied Chilinski the right to a trial by jury in these civil in rem forfeiture proceedings. We reverse and remand for a new trial consistent with this Opinion. /S/ LAURIE McKINNON We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

November 1, 2016

f50f61ae-85a5-42d9-930a-de33da160671

Labair v. Carey

2016 MT 272

DA 15-0621

Montana

Montana Supreme Court

DA 15-0621 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 272 HOLLY LABAIR and ROBERT LABAIR, Individually and on behalf of DAWSON R. LABAIR, deceased minor child, Plaintiffs and Appellants, v. STEVE CAREY, Esq., and CAREY LAW FIRM, and JANE DOES 1-4, Defendants and Appellees. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 10-254 Honorable Edward P. McLean, Presiding Judge COUNSEL OF RECORD: For Appellants: Tina L. Morin, Morin Law Firm, PLLC, Butte, Montana Paul Warren, Paul Warren Law, PLLC, Billings, Montana For Appellees: Mikel L. Moore, Katherine A. Matic, Moore, Cockrell, Goicoechea & Johnson, P.C., Kalispell, Montana Submitted on Briefs: June 29, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 15-0621 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Holly and Robert Labair (the Labairs) appeal from final judgment on their legal malpractice claim entered for defendants Steve Carey and Carey Law Firm (collectively “Carey”) in the Montana Fourth Judicial District Court, Missoula County. We vacate and remand for a new trial. ISSUE ¶2 The issue on appeal is whether the District Court erred in instructing the jury to decide whether the plaintiffs would have settled the claim underlying their legal malpractice suit. BACKGROUND ¶3 The factual background of this case was detailed in Labair v. Carey, 2012 MT 312, 367 Mont. 453, 291 P.3d 1160 (Labair I), and will not be repeated here at great length. In short, this case stems from the October 2003 death of Dawson Labair, the Labairs’ newborn child, following an early delivery by C-section. The Labairs signed a retainer agreement with Carey in January 2004 to pursue a potential medical malpractice claim against Dr. Thomas Baumgartner, their obstetrician. In September 2006, Carey filed a complaint in District Court against Dr. Baumgartner and Community Medical Center alleging negligence and negligent infliction of emotional distress. Carey did not file an application with the Montana Medical Legal Panel (MMLP) before filing the complaint, as required by §§ 27-6-301 and -701, MCA (2005). Carey also failed to file an application with the MMLP before the expiration of the three-year statute of 3 limitations for medical malpractice claims. See § 27-2-205, MCA (2005). Carey later admitted to an error in calculating the statute of limitations. ¶4 In March 2010, the Labairs filed a legal malpractice complaint against Carey alleging negligence and several other causes of action stemming from the lapsed statute of limitations. In November 2011, the District Court granted summary judgment to Carey on the grounds that the Labairs had failed to establish a prima facie legal malpractice case because they failed to provide expert evidence on causation and damages in the underlying medical malpractice claim. The Labairs appealed, and we reversed and remanded in Labair I. ¶5 We concluded in Labair I that the Labairs were entitled to summary judgment on the duty, breach, and causation elements of their legal malpractice claim against Carey. We remanded the case to the District Court for a trial to establish two required components of the damages element of the Labairs’ claim: first, “that it is more probable than not that they would have recovered a settlement or a judgment against Dr. Baumgartner but for Carey’s negligence,” and second, “the value of the lost settlement and/or judgment.” Labair I, ¶ 41. ¶6 On remand, the District Court conducted a six-day jury trial in which both sides presented expert testimony on the likelihood of a settlement or a judgment in the underlying case and the estimated value of that settlement or judgment. Charles Burdell, the Labairs’ expert witness on settlements, testified that the case could have settled for $500,000 to $750,000. He also testified that over 90% of medical negligence cases settle. 4 Carey’s settlement expert testified that 95% of medical negligence cases settle, and that the Labairs’ claim likely would have settled for $100,000 to $300,000. ¶7 Both Holly and Robert Labair testified at trial, but neither explicitly said whether or not they would have settled with Dr. Baumgartner. Holly Labair said she believed Steve Carey could help her “[o]btain justice” and “hold [Dr. Baumgartner] accountable.” Steve Carey testified that Robert Labair was angry at Dr. Baumgartner, but neither the Labairs’ attorney nor Carey actually established the Labairs’ desires regarding settlement. The defense played a videotaped deposition of Dr. Baumgartner, in which Dr. Baumgartner said he would have settled with the Labairs for a nominal amount. No other evidence on the Labairs’ or Dr. Baumgartner’s willingness to settle the underlying medical malpractice claim was presented at trial. ¶8 The jury issued its verdict on a special verdict form, which posed yes or no questions to the jury regarding key elements of the Labairs’ claim. Relevant portions of the verdict form, including the jury’s responses, read as follows: QUESTION NO. 1: Have the Labairs proven by a preponderance of the evidence that Dr. Baumgartner’s treatment of Holly and Dawson Labair failed to meet the accepted standards of skill and care at the time the services were provided? ANSWER: [ X ] Yes [ ] No If your answer to QUESTION NO. 1 is “No,” then skip QUESTION NO. 2 and QUESTION NO. 3 and proceed to QUESTION NO. 4. If your answer to QUESTION NO. 1 is “Yes,” then proceed to QUESTION NO. 2. 5 QUESTION NO. 2: Have the Labairs proven by a preponderance of the evidence that Dr. Baumgartner’s failure to meet the accepted standards of skill and care at the time the services were provided to Holly and Dawson Labair caused injuries and damages to the Labairs? ANSWER: [ ] Yes [ X ] No If your answer to QUESTION NO. 2 is “No,” then skip QUESTION NO. 3 and proceed to QUESTION NO. 4. If your answer to QUESTION NO. 2 is “Yes,” then proceed to QUESTION NO. 3. [The jury then skipped Question No. 3, which inquired what damages the Labairs would have recovered from a jury verdict against Dr. Baumgartner.] QUESTION NO. 4: Have the Labairs proven by a preponderance of the evidence that Holly and Robert Labair lost the opportunity to recover a settlement from Dr. Baumgartner as a result of Steve Carey’s and the Carey Law Firm’s admitted negligence and failing [sic] to file a timely medical malpractice claim against Dr. Baumgartner? ANSWER: [ ] Yes [ X ] No If your answer to QUESTION NO. 4 is “No,” then skip QUESTION NO. 5 and proceed to QUESTION NO. 6. If your answer to QUESTION NO. 4 if [sic] “Yes,” then proceed to QUESTION NO. 5. The jury then skipped to Question No. 6, which is not at issue on appeal. ¶9 During deliberations, the jury asked the District Court for clarification of Question No. 4: “In regards to question 4 on the questionare [sic] are we to consider whether the Labairs would have settled or did they just lose the opportunity?” ¶10 The District Court discussed the jury’s question with counsel for both parties and suggested that the jury be given a new instruction, which read as follows: 6 In response to your question, attached hereto, You are instructed that the Labairs did lose the opportunity to settle with the dismissal of the underlying case. The question of 4 is would they have settled. If your answer is yes, go to question no. 5. If your answer is no go to question no. 6. ¶11 In accord with M. R. Civ. P. 51(c), the Labairs made a timely and specific objection to the District Court’s proposal, arguing that “all we have to prove is that we could have secured a settlement, and the moment Dr. Baumgartner said he would have settled, we proved that.” The District Court disagreed, explaining: [T]he settlement value has been established, but the question remains . . . would the Labairs have taken the settlement? And I don’t know how we get around that question for them. . . . I don’t know that, from listening to Mr. Carey’s testimony, that they would have settled . . . . ¶12 The District Court then gave the jury the new instruction, which was identified as Instruction No. 36. With this additional instruction, the jury answered “No” to Question No. 4, apparently indicating that the Labairs would not have settled the underlying medical malpractice claim. After the jury was discharged, the Labairs orally renewed their objection to Instruction No. 36: The Montana Supreme Court did not lay the burden on the plaintiffs of whether they would have settled. There was no way for the plaintiffs to give that testimony if they would have settled without knowing the amount. . . . We believe that this instruction to the jury is a reversible error, your Honor. Carey countered that the Labairs’ willingness to settle was an element of proof implied by our holding in Labair I: 7 [T]he Labairs bore the burden from the beginning, at least since the Supreme Court’s decision to prove both that there could have been a settlement and the value of that settlement. It’s a failure of proof on the part of the plaintiffs’ case, and they had all the opportunity in the world to provide that proof to this court and to this jury, and they failed to do it. ¶13 The District Court decided to let the jury’s verdict stand, but noted “Dr. Baumgartner’s testimony is that he would have only agreed for a minimal settlement on his part,” implying the Labairs also failed to show a potential settlement value that would have been agreeable to both sides. The District Court formally entered judgment on September 22, 2015, from which the Labairs appeal. STANDARD OF REVIEW ¶14 We review a district court’s selection of jury instructions for abuse of discretion. Cechovic v. Hardin & Assocs., 273 Mont. 104, 116, 902 P.2d 520, 527 (1995). Taken in their entirety, “jury instructions must fully and fairly instruct the jury regarding the applicable law.” Goles v. Neumann, 2011 MT 11, ¶ 9, 359 Mont. 132, 247 P.3d 1089. When a jury instruction is based on a district court’s conclusion of law, we apply a plenary review standard. W. Sec. Bank v. Eide Bailly LLP, 2010 MT 291, ¶ 18, 359 Mont. 34, 249 P.3d 35. DISCUSSION ¶15 Did the District Court err in instructing the jury to decide whether the plaintiffs would have settled the medical malpractice claim underlying their legal malpractice suit? ¶16 Legal malpractice is a type of professional negligence consisting of four essential elements: (1) a duty owed by the attorney to the client, (2) a breach of that duty, (3) causation, and (4) damages to the client. Labair I, ¶ 17. Because Labair I established 8 the first three elements of the Labairs’ claim against Carey, the sole issue on remand was damages. ¶17 It is well established that a plaintiff in a legal malpractice case “‘must show by a preponderance of the evidence what injuries he suffered’” as a result of the malpractice. Labair I, ¶ 43 (quoting Lieberman v. Emp’rs Ins. of Wausau, 84 N.J. 325, 342, 419 A.2d 417, 426 (N.J. 1980)). Ultimately, the plaintiff must prove that damages are not speculative, but have a sufficient basis in fact. Labair I, ¶ 45 (citing Merzlak v. Purcell, 252 Mont. 527, 530, 830 P.2d 1278, 1280 (1992)). The method by which the plaintiff proves those injuries is generally left to the discretion of the trial court. Labair I, ¶ 43 (citing Lieberman, 419 A.2d at 427). In cases like the present, proving damages requires a plaintiff to effectively prosecute a “suit within a suit,” wherein the claim underlying the legal malpractice must be proven by a preponderance of the evidence in order to show the legal malpractice caused actual harm. Stott v. Fox, 246 Mont. 301, 305, 805 P.2d 1305, 1307 (1990); Richards v. Knuchel, 2005 MT 133, ¶ 18, 327 Mont. 249, 115 P.3d 189, overruled on other grounds by Labair I, ¶ 23. The jury in such a case must determine whether a reasonable jury considering the underlying claim could find for the plaintiff. Labair I, ¶ 26 (citing Richards, ¶ 18). ¶18 We acknowledged in Labair I the difficulty of prescribing the particular types of evidence and presentation that a legal malpractice “suit within the suit” would require. “Different types of legal malpractice cases will require different types of evidence and presentation.” Labair I, ¶ 44. We also noted the Labairs’ claim against Carey presents a unique case in that the Labairs lost not only the right to sue Dr. Baumgartner and recover 9 a verdict for medical malpractice, but they also lost the opportunity to pursue a pretrial settlement. Labair I, ¶ 31. Because the lost possibilities of securing either a verdict or a settlement were each potential injuries, we remanded the case to determine whether the Labairs could prove it was more probable than not that they would have recovered a verdict or a settlement. Labair I, ¶ 45. ¶19 On remand, the District Court rightly instructed the jury that the Labairs could not recover for the loss of both a verdict and a settlement. To recover the value of a verdict in the underlying claim, the Labairs would need to prove each element of their underlying claim against Dr. Baumgartner by a preponderance of the evidence. Even if the Labairs failed to prove that they would have recovered a verdict against Dr. Baumgartner, however, the lost possibility of a pretrial settlement with Dr. Baumgartner remained a distinct injury for which the Labairs could recover damages. ¶20 In answering Questions 1 and 2 of the special verdict form, the jury concluded the Labairs proved Dr. Baumgartner breached the standard of care, but that they failed to prove that this breach caused damages. As a result, the Labairs are not entitled to damages that would be recoverable from a verdict in the underlying claim against Dr. Baumgartner. The Labairs do not allege any error in the District Court’s instruction on the question of verdict damages. The sole question on appeal is whether the Labairs satisfied their burden of proving the lost opportunity for a pretrial settlement in the underlying claim. Consequently, the crux of this case is the scope of the Labairs’ burden of proof for the lost opportunity to settle. 10 ¶21 The Labairs argue Labair I never required them to prove that they would have actually settled with Dr. Baumgartner. Instead, the Labairs interpret Labair I as imposing the more limited burden of proving the likelihood of a settlement and the value of a potential settlement, both of which they established through expert testimony. Carey counters it would be improper to relieve the Labairs of the burden of proving they would have settled with Dr. Baumgartner. While Carey’s negligence undoubtedly deprived the Labairs of the opportunity to settle, Carey argues it is still possible that the Labairs would have refused to settle if the opportunity presented itself. Carey maintains that if the Labairs would have refused to settle, the lost opportunity to settle would not be an actual injury. ¶22 As stated in Labair I, the Labairs’ burden on remand was as follows: “At trial, the Labairs must establish that it is more probable than not that they would have recovered a settlement or a judgment against Dr. Baumgartner but for Carey’s negligence, as well as the value of the lost settlement and/or judgment.” Labair I, ¶ 41 (emphasis added). We did not hold the Labairs had to prove they would have settled. Instead, the Labairs were required to prove a settlement was more probable than not. The Labairs clearly satisfied this burden through expert testimony establishing that settlements occur in 90% of cases similar to theirs. That testimony was bolstered by Carey’s expert, who estimated that 95% of medical malpractice cases settle. ¶23 The Labairs also satisfied their burden of proving the likely value of the lost opportunity to settle. The Labairs’ settlement expert estimated the likely settlement value would fall between $500,000 and $750,000. Although Carey’s expert testified to a much 11 lower range of settlement values, between $100,000 and $300,000, the jury could weigh this conflicting testimony and determine a value for the lost opportunity. Thus, the Labairs’ evidence was sufficient to satisfy the two-part burden we outlined in Labair I. When the jury asked for clarification of this burden, however, the District Court effectively added a new element: whether the Labairs would have actually accepted a settlement. Moreover, the District Court added this element to the burden of proof after both parties had rested and the case was in the jury’s hands. Because the District Court’s instruction did not fairly instruct the jury on the law of the case we established in Labair I, we conclude that the instruction was an abuse of discretion that demands a new trial. ¶24 Carey maintains this additional element is a logical extension of Labair I, because the Labairs’ willingness to accept a settlement is a prerequisite to actually recovering a settlement. We stated in Labair I, however, that the Labairs simply needed to prove it was more probable than not that they would have recovered a settlement. We did not hold that the Labairs must show they were willing to settle and therefore would have actually recovered a settlement. If we adopted such a rule, it stands to reason that the Labairs must also prove Dr. Baumgartner would have been willing to settle, because a settlement requires the assent of both parties. But it would be impossible to replicate the give-and-take of settlement negotiations with Dr. Baumgartner now that he is shielded from liability by Carey’s negligence. Indeed, Dr. Baumgartner has no incentive to settle now that the Labairs’ claim against him is time-barred. Carey should not be shielded 12 from liability simply because his own negligence makes it impossible to prove today what the parties would have done in settlement negotiations years ago. ¶25 The appropriate burden of proof is the one we established in Labair I. The Labairs must prove two elements to recover for the lost opportunity to settle with Dr. Baumgartner: (1) that they more probably than not would have recovered a settlement with Dr. Baumgartner, and (2) the likely range of value of the lost settlement. We note that neither Question No. 4 of the special verdict form nor Instruction No. 36 clearly posed this first element as a question for the jury. Question No. 4 asked whether the Labairs had “proven by a preponderance of the evidence that Holly and Robert Labair lost the opportunity to recover a settlement from Dr. Baumgartner as a result of Steve Carey’s and the Carey Law Firm’s admitted negligence.” This determination, however, was established as law of the case by virtue of our conclusion in Labair I that the Labairs did in fact lose the opportunity to settle. Instruction No. 36 corrected this error, but then proceeded to direct the jury to answer the subjective question of whether the Labairs would have actually settled, when Labair I required only that they answer the objective question of whether it was more probable than not that they would have recovered a settlement. At this stage, the threshold question for the jury should have been whether the Labairs had proven that they more probably than not would have recovered a settlement. ¶26 Because both parties’ experts testified that a settlement was more probable than not, the Labairs argue judgment as a matter of law is appropriate on this threshold question. We agree. “Judgment as a matter of law is properly granted only when there is 13 a complete absence of any evidence which would justify submitting an issue to a jury.” Martin v. BNSF Ry. Co., 2015 MT 167, ¶ 8, 379 Mont. 423, 352 P.3d 598 (citing Weber v. BNSF Ry. Co., 2011 MT 223, ¶ 16, 362 Mont. 53, 261 P.3d 984). When considering whether judgment as a matter of law is proper, we view evidence in the light most favorable to the party opposing such judgment. Martin, ¶ 8 (citing Weber, ¶ 16). By the lowest estimate presented at trial, the probability of settlement was 90%. The only evidence that comes close to contradicting this estimate is testimony from Carey’s expert, who stated that the Labairs’ specific claim “had a better-than-even chance of settlement if they would have been willing to accept” a settlement. Setting aside the fact that this testimony is couched in the Labairs’ willingness to settle, which we have held is not dispositive of their recovery, the testimony nonetheless shows that a settlement was more probable than not. Even considering this evidence in the light most favorable to Carey, the only reasonable conclusion is that the Labairs more probably than not would have recovered a settlement. Thus, we conclude that the Labairs are entitled to judgment as a matter of law on this first element of settlement damages. ¶27 In the new trial, the District Court need not revisit the question of whether Dr. Baumgartner’s treatment of Holly and Dawson Labair failed to meet accepted standards of care, as the jury here answered that question in the affirmative. In addition, the District Court need not revisit the question of damages for a lost opportunity to recover a verdict. As explained above, the jury already resolved that question in Carey’s favor, and the Labairs do not allege the District Court erred in instructing the jury on that question. See supra ¶ 20. Instead, the new trial will address damages for the lost opportunity to 14 settle with Dr. Baumgartner. Because the Labairs are entitled to judgment as a matter of law on the first element of settlement damages, the only remaining evidentiary burden borne by the Labairs is showing the likely range of value of a settlement. CONCLUSION ¶28 For the foregoing reasons, we vacate the judgment of the District Court and remand for a new trial on the question of the value of the lost opportunity to settle. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA Justice Beth Baker, concurring. ¶29 I concur with the Court’s disposition of this appeal based on the law of the case established in Labair I. I do not conclude from this disposition, however, that a plaintiff in every legal malpractice case is relieved from the burden of proving that she would have accepted a settlement. It is not necessary for us to decide that here, and I do not interpret today’s decision to settle that question as a matter of law. /S/ BETH BAKER Justice Laurie McKinnon, dissenting. ¶30 I respectfully dissent from the Court’s decision to reverse and remand for a new trial. In my opinion, the Court has rewritten LaBair I; changed the law of the case, to the 15 extent the law of Labair I could reasonably be discerned; and conflated burdens of proof for causation and damages. The District Court labored onerously in its commitment to follow and understand our decision in LaBair I. The court’s instruction that the Labairs must show that they would have actually settled is a correct statement of the law of negligence. However, regardless of the correctness of the instruction, when examining the context of the entire record—the jury instructions as a whole; the Special Verdict form (to which no objection was made); and, in particular, our confusing reasoning in Labair I—I cannot find that the District Court abused its discretion when it instructed the jury that for the Labairs to recover the jury must find they “would have settled.” ¶31 Our decision results from our efforts in Labair I to create an injury and fashion a remedy which was not only novel and unique, but distanced this Court from the mainstay of authority provided by other jurisdictions. In Labair I, we recognized, for the first time and devoid of any authority, that a loss of opportunity to settle a claim can be an injury. Although we cited as authority for creating this new injury Jenkins v. St. Paul Fire & Marine Ins. Co., 422 So.2d 1109, 110 (La. 1982), stating “[o]ther jurisdictions have similarly recognized that the loss of the opportunity to bring a claim can constitute prima facie evidence of an injury,” Labair I, ¶ 32, (emphasis added), Jenkins considered only the lost opportunity to bring a claim and not the lost opportunity to settle a claim. It is well established that the loss of opportunity to bring a claim is a recognizable cause of action in legal malpractice cases which, within the framework of a “suit within a suit,” is a compensable injury if causation is demonstrated. However, there is no authority recognizing a right to settlement and injuries resulting from a loss of settlement 16 opportunity.1 Nonetheless, while we recognized a distinction in the type of injury between a lost opportunity to bring a claim and a lost opportunity to settle a claim, we failed to appreciate a distinction in causation and damages between the injuries and to instruct the trial court on remand accordingly. Had we done so, we might have seen the fallacy of our reasoning in allowing the pursuit of a claim for loss of opportunity to settle. The court, counsel, and the jury had the misfortune of laboring under our guidance in Labair I. In my opinion, despite the unmanageability of Labair I, the jury recognized and dealt with the salient issue in these proceedings—that the Labairs were not interested in settling their claim. I would not prolong the agony of this case and add another layer of poorly reasoned precedent by finding an abuse of discretion on the part of the trial court. ¶32 Settlements result from a multitude of unique factors, including the mental disposition of the parties, which are difficult to account for when considering causation and damages. Preliminarily, in my opinion, “[t]here is “no ‘right’ to a settlement, which is an extra-judicial action of the parties taken for any number of reasons, some of which are completely unrelated to a claim’s validity.” Labair I, ¶ 63 n. 1 (J. Rice, concurring). The District Court’s misfortunes stem from our creation in Labair I of a stand-alone injury of a loss of settlement potential, and our statements implying that causation for 1 Jenkins simply does not stand for the proposition we cited it for: recognition of a loss of settlement of a claim; Jenkins concerns the loss of opportunity to bring a claim. Spencer, also cited in Labair I, ¶ 32, was decided within the context of a criminal matter and the loss of opportunity to bring a post-conviction proceeding. It likewise is not authority for the creation of a loss of opportunity to settle in a medical malpractice action. Jenkins, which followed the majority line of cases, recognized that the “suit within the suit” would necessitate examining the success of the underlying court action in the post-conviction proceedings, a matter which is more easily susceptible to a causation analysis than the likelihood of settlement in a medical malpractice action. 17 such a claim has already been established by Carey’s admission of duty and breach of that duty. Furthermore, we conflated causation for these two distinct injuries. In Labair I, we held that “Carey was the cause-in-fact of the Labairs’ loss of their medical malpractice case . . . ;” Labair I, ¶ 39 n. 5: that is, that Carey was the cause-in-fact of the Labairs’ loss of the opportunity to bring a claim. It does not follow, however, that such a conclusion is equally dispositive of a lost opportunity to settle. There is little question that by hiring a lawyer and pursuing a medical malpractice action, the Labairs intended to bring a claim; however, the same cannot be said regarding an intention to settle a claim, especially when there was evidence indicating the Labairs were not interested in settling.2 The jury and the District Court, in contrast to this Court in Labair I and here, appreciated these distinctions. While the Labairs’ counsel protested and argued that another burden was being placed upon the Labairs, the court’s instruction that the Labairs would have actually accepted a settlement was consistent with the law of causation and damages. ¶33 It is thus painfully apparent that the issues in the current appeal arise from our inconsistencies and incorrect reasoning regarding causation and damages in Labair I. We stated in Labair I that “[u]nder circumstances such as this—where duty and breach are admitted, and an untimely filing caused the loss of a claim with some value—legal causation can be decided as a matter of law.” Labair I, ¶ 36. Despite our conclusion that causation was established as a matter of law, Labair I, ¶ 36, and fact, Labair I, ¶ 39 n. 5, we remanded for the Labairs to establish, within the context of a “suit within a suit” 2 Indeed, Holly Labair testified that she “absolutely [did] not” bring this lawsuit against Dr. Baumgartner for the money. And Carey testified that Robert Labair told him “on more than one occasion that he wanted to kill Dr. Baumgartner.” 18 analysis, that “it is more probable than not that they would have recovered a settlement or a judgment against Dr. Baumgartner but for Carey’s negligence, as well as the value of the lost settlement and/or judgment.” Labair I, ¶ 41 (emphasis added). It makes no sense to, first, remove from determination by a jury the question of causation, finding it established as a matter of law and leaving nothing but the amount of damages to be ascertained by a jury. It is, second, inconsistent to next remand for causation to be established—“they would have recovered a settlement . . . but for Carey’s negligence . . . .” Labair I, ¶ 41. Our use of “but for” language relates to causation, which, after examining our precedent discussing “proximate cause” within the context of a legal malpractice action, we concluded was the appropriate test to be applied. Labair I, ¶ 21 (“We take this opportunity to clarify our previous legal malpractice jurisprudence and reconcile the causation analysis with this Court’s decision in Busta . . . .”). Nonetheless, we simultaneously established causation as a matter of law, Labair I, ¶ 36, while remanding for the jury to determine causation in the context of a “suit within a suit.” Labair I, ¶ 41. Significantly, with respect to this inconsistency, we fail to distinguish between causation and damages respecting loss of opportunity to bring a claim and that of a loss of opportunity to settle a claim. ¶34 Today, the Court rewrites Labair I, in favor of the Labairs, to definitively conclude that causation regarding the loss of opportunity to settle a claim, in addition to causation to bring a claim, was established in Labair I as a matter of law. The Court enters judgment as a matter of law on duty, breach, and causation, leaving only the amount of damages to be determined by a jury. First, as already seen, we were 19 inconsistent in Labair I regarding causation and, in particular, its relationship to damages. Second, we failed to appreciate a distinction in causation between the two types of injuries. There is no question that by hiring a lawyer and pursuing a medical malpractice action, the Labairs intended to bring a claim which they lost the opportunity to pursue. However, the same cannot be said for an intention to accept and settle a claim, which must first be demonstrated before the Labairs can receive damages as compensation for the injury of a lost opportunity to pursue settlement. Accordingly, in establishing a new “two-part burden” we have changed the law of the case by removing the requirement that the Labairs demonstrate they would have accepted a settlement and that “but for” Carey’s negligence they lost the opportunity to settle. Instead, we include what was omitted in Labair I by concluding “[t[his determination, however, was established as law of the case by virtue of our conclusion in Labair I that the Labairs did in fact lose the opportunity to settle.” Opinion, ¶ 25. Thus, the only remaining element the Labairs must establish is the “likely range of value of a settlement.” Opinion, ¶ 27. (See also Opinion, ¶ 26; “thus we conclude that the Labairs are entitled to judgment as a matter of law on this first element [but for causation] of settlement damages.”) We arrive at this conclusion despite the jury having found that Carey’s failure to file a claim was not the cause of the Labairs’ injuries, both for the loss of opportunity to bring a claim and the loss of opportunity to settle a claim. This leaves us with the unbelievable and astounding proposition that, in a negligence action, this Court may remove from consideration by a jury nearly the entire action—duty, breach, causation, and damages—leaving only the amount of damages to 20 be determined by the jury. While we may not have stated this clearly in Labair I, we do so, unfortunately, here. The Court’s reasoning, at the very least, is unprecedented. ¶35 Finally, I would be remiss if I failed to point out that the District Court’s instruction to the jury that it must find the Labairs actually would have settled was, in fact, a correct statement of the law. A legal malpractice case is a negligence action that imposes a standard of care that is both objective and external, rather than that of individual judgment. “It must be the same for all persons, since the law can have no favorites; and yet allowance must be made for some of the differences between individuals, the risk apparent to the actor, his capacity to meet it, and the circumstances under which he must act.” Restatement (Second) of Torts § 283 cmt. c (1965). The law of torts attempts to “put an injured person in a position as nearly as possible equivalent to his position prior to the tort.” Restatement (Second) of Torts § 901 cmt a (1965). Attorney malpractice is professional negligence. “The proper measure of damage in an attorney malpractice action is the difference between the client’s recovery and the amount that would have been recovered by the client except for the attorney’s negligence.” Merzlak v. Purcell, 252 Mont. 527, 529, 830 P.2d 1278, 1279 (1992). A claim of malpractice must have resulted in damages. Kane v. Miller, 258 Mont. 182, 187, 852 P.2d 130, 133 (1993). ¶36 In contrast to the duty of care element for a negligence action, we do not impose an objective standard or “reasonable man” standard when determining whether causation has been established and damages have been incurred. Hence, the Court is incorrect when it concludes that the District Court, by requiring the Labairs to establish they would 21 have actually settled, imposed an additional, subjective burden of proof upon the Labairs. Opinion, ¶¶ 24–25. Contrary to the Court’s reasoning, whether the Labairs themselves did indeed sustain damages is a subjective inquiry which examines the particular circumstances of the Labairs’ situation. Proof of damages means that the recovering party has demonstrated that they would have actually recovered; that is, under the circumstances present here, that they would have accepted the settlement. This is in accord with jurisdictions that have considered the failure of an attorney to communicate a settlement offer. See Cannistra v. O’Connor, McGuinness, Conte, Doyle, Oleson & Collins, 286 A.D.2d 314, 316 (N.Y. App. Div. 2001) (“Here, the plaintiffs failed to demonstrate that, but for the defendant’s alleged negligence, they would have accepted the County’s settlement offer and not have sustained any damages.”); Bauza v. Livington, 40 A.D.3d 791 (N.Y. 2007) (“Here, the plaintiffs failed to demonstrate that, but for the defendant’s alleged negligence, they would have accepted the defendant’s offer of settlement[.]”). To recover in any negligence action, there is always a requirement that the damages be the plaintiff’s actual damages which, by their very nature, is not an objective standard. ¶37 When reviewing a trial court’s instructions to the jury, we consider the instructions in their entirety, in connection with other instructions given, and the evidence introduced at trial. Instructions to the jury must fully and fairly instruct the jury regarding the applicable law. Goles, ¶ 9. Consistent with Labair I, the court instructed the jury repeatedly that the Labairs had to show they “would have recovered” a judgment or settlement from Dr. Baumgartner. Consistent with general principles in negligence law 22 of causation and damages, the court responded to a specific question from the jury, likely prompted by their assessment that the Labairs were not interested in settling, that the Labairs had to demonstrate that they would have accepted a settlement. In my opinion, this was an accurate statement of the law and was within the court’s broad discretion to assess whether its response went beyond the parties’ expectations when presenting their case to the jury. The distinction between “would have settled” and “would have recovered a settlement” is immaterial and does not warrant reversal and remand for a new trial. When considered with all the instructions given and the confusing analysis we provided in Labair I, I cannot fault the District Court and find an abuse of discretion when it instructed the jury that they must find the Labairs “would have settled” in order to recover for their lost opportunity to settle. The Labairs received a jury trial on their claims and the jury found causation did not exist between Carey’s negligence and the Labairs’ lost opportunity to bring a claim and settle a claim. The Labairs’ substantial rights have not been prejudiced. ¶38 I dissent from the Court’s decision holding otherwise. /S/ LAURIE McKINNON Justice Jim Rice joins in the foregoing dissent. /S/ JIM RICE

October 25, 2016

a0b5dbdc-4aba-4d0e-91ea-ad8c7c967ebf

State v. A. Shull

2016 MT 264N

DA 15-0347

Montana

Montana Supreme Court

DA 15-0347 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 264N STATE OF MONTANA, Plaintiff and Appellee, v. ANTHONY SHULL, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-13-133D Honorable David M. Ortley, Presiding Judge COUNSEL OF RECORD: For Appellant: Ashley Harada, Harada Law Firm, PLLC, Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana Ed Corrigan, Flathead County Attorney, Kalispell, Montana Submitted on Briefs: September 21, 2016 Decided: October 18, 2016 Filed: __________________________________________ Clerk 10/18/2016 Case Number: DA 15-0347 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Anthony Shull appeals from the District Court’s Memorandum Decision and Order filed July 7, 2014, denying Schull’s motion to withdraw his guilty plea. We affirm. ¶3 In 2013 the State charged Shull with multiple counts of burglary and theft arising from several break-ins in Flathead County. Shull pled not guilty and moved to suppress some of the evidence. Prior to the hearing on Shull’s motion, the State offered a global plea agreement, and Shull took the weekend to consider it. He agreed to plead guilty to two counts of burglary and one count of felony theft. The State agreed to dismiss the other pending charges and to recommend a twelve-year commitment to the Department of Corrections with seven years suspended. Shull executed an acknowledgment and waiver of rights and on November 20, 2013, the District Court accepted Shull’s guilty plea and released him from jail pending sentencing. On November 25, 2013, the State filed a new burglary charge against Shull arising from a November 23 break-in, within three days of his release from jail. Shull pled not guilty. 3 ¶4 In January 2014 Shull appeared with new counsel and moved to withdraw his guilty plea to the original charges. Shull argued that the guilty plea was coerced by the prosecutor’s intent to seek a greater prison sentence if Shull went forward with his motion to suppress. Shull argued that he only agreed to the plea so he could get out of jail to visit his ailing father. Shull also argued that the plea agreement with the State provided that if he committed any new criminal offense, doing so “may negate this agreement.” ¶5 On June 23-24, 2014, the District Court held an evidentiary hearing on Shull’s motion to withdraw his guilty pleas. Shull and his former attorney testified. Based upon the evidence presented, the District Court determined that Shull had not demonstrated good cause to believe that his plea agreement was involuntary. The fact that Shull had to make choices among difficult alternatives did not convince the District Court that the plea was involuntary or that Shull had been coerced into agreeing to it. ¶6 A guilty plea may be withdrawn for good cause, but is valid and binding if it was the product of a voluntary, knowing, and intelligent choice. State v. Burns, 2012 MT 97, ¶ 15, 365 Mont. 27, 278 P.3d 452. An involuntary plea is one induced by improper threats, misrepresentations or promises. State v. Brinson, 2009 MT 200, ¶ 8, 351 Mont. 136, 210 P.3d 164. However, prosecutors are not prohibited from using the prospect of seeking increased punishment to induce acceptance of a plea agreement. The give and take of pretrial plea negotiations is not construed as a punishment for a defendant’s exercising his constitutional rights as long as he is free to accept or reject the deal. State v. Knowles, 2010 MT 186, ¶ 33, 357 Mont. 272, 239 P.3d 129. 4 ¶7 We agree with the District Court’s determination that Shull failed to demonstrate good cause to believe that his plea agreement was involuntary. We also agree with the District Court that Shull was not entitled to commit a new offense and thereby negate the plea agreement. That provision cannot be construed as providing a defendant an incentive to commit additional offenses. ¶8 Shull argues that the District Court did not properly advise him of possible lesser included offenses at the time he pled guilty. Shull did not raise this issue with the District Court and we decline to consider it here. Shull also argues that he was sentenced without a psychological evaluation provided for in the plea agreement. The State points out that the plea agreement provided Shull the opportunity to arrange for a pre-sentencing evaluation and that he failed to do so despite continuances of the sentencing proceeding. The District Court also did not consider this issue and we decline to do so here. ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, this case presents questions controlled by settled law. ¶10 Affirmed. /S/ MIKE McGRATH We Concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 18, 2016

f2114cfd-971a-401c-a422-12fda7b11102

State v. Spottedbear

2016 MT 243

DA 15-0127

Montana

Montana Supreme Court

DA 15-0127 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 243 STATE OF MONTANA, Plaintiff and Appellee, v. GALE SPOTTEDBEAR, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADC 14-096 Honorable Gregory G. Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Alexander H. Pyle, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Amanda L. Lofink, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: August 3, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0127 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Great Falls Police Officer Mike Walker arrested Gale Spottedbear for disorderly conduct following a disturbance at Wal-Mart. Spottedbear threatened to kill Officer Walker and his family after Officer Walker told him that he was also being charged with criminal trespass—a more serious offense. The State charged Spottedbear with threats and other improper influence in official matters, criminal trespass, and disorderly conduct, and a jury convicted him on all three counts. Spottedbear challenges his conviction on the following grounds: (1) the improper influence statute is unconstitutionally overbroad—a claim Spottedbear raises for the first time on appeal; (2) the evidence was insufficient to convict him on either the improper influence or criminal trespass charge; (3) the court should not have admitted evidence regarding a prior incident with Officer Walker; and (4) his trial counsel was ineffective for failing to raise the constitutional challenge and for failing to object to the jury instructions on mental state. ¶2 We affirm the improper influence conviction and reverse the conviction for criminal trespass. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In late February 2014, Officer Walker responded to a disturbance between Spottedbear and another customer at a Wal-Mart store in Great Falls, Montana. After speaking to Janet Sherod, a Wal-Mart staff member, about the situation, Officer Walker told Spottedbear to leave the store. On his way out, Spottedbear yelled at Sherod, and Officer Walker arrested him for disorderly conduct. 3 ¶4 On the way to the detention center, Officer Walker informed Spottedbear that he was going to charge him with criminal trespass in addition to disorderly conduct. Spottedbear—who was intoxicated—became more agitated and brought up a previous incident in which he threatened and assaulted Officer Walker. Spottedbear grew increasingly belligerent and yelled that he had seen Officer Walker and his wife out in public since that incident. Spottedbear then repeatedly threatened to kill Officer Walker, his pregnant wife, and his family. ¶5 Based on Spottedbear’s threats, the State added a charge of improper influence to the disorderly conduct and criminal trespass charges. Prior to trial, Spottedbear moved to limit the State’s introduction of evidence regarding the previous incident he had with Officer Walker. The District Court ruled that the State could elicit testimony about the prior incident but that it could not bring up that Spottedbear had been convicted of any crime. ¶6 Officer Walker was the only witness at trial. The jury found Spottedbear guilty on all three charges. The District Court sentenced Spottedbear as a persistent felony offender to ten years for the improper influence conviction, six months for the criminal trespass conviction, and ten days for the disorderly conduct conviction, to run concurrently. Spottedbear appeals. STANDARDS OF REVIEW ¶7 This Court exercises plenary review over constitutional questions. State v. Dugan, 2013 MT 38, ¶ 14, 369 Mont. 39, 303 P.3d 755. A statute may be deemed 4 constitutionally overbroad if it includes within its scope conduct that is protected by the First Amendment. Dugan, ¶ 52. ¶8 We review questions on the sufficiency of the evidence in a criminal matter to determine whether, after reviewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. State v. Weigand, 2005 MT 201, ¶ 7, 328 Mont. 198, 119 P.3d 74. We review a jury’s verdict to determine whether sufficient evidence exists to support the verdict, not whether the evidence could have supported a different result. Weigand, ¶ 7. It is within the province of the jury to weigh the evidence based on the credibility of the witnesses and determine which version of events should prevail. Weigand, ¶ 7. ¶9 A trial court has broad discretion in determining the relevance and admissibility of evidence. State v. Derbyshire, 2009 MT 27, ¶ 19, 349 Mont. 114, 201 P.3d 811. Thus, we review a trial court’s evidentiary rulings for an abuse of discretion. Derbyshire, ¶ 19. A court abuses its discretion if it acts arbitrarily without the employment of conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice. Derbyshire, ¶ 19. In exercising its discretion, however, the trial court is bound by the Rules of Evidence. Derbyshire, ¶ 19. Consequently, to the extent that the court’s ruling is based on an interpretation of an evidentiary rule, our review is de novo. Derbyshire, ¶ 19. ¶10 Claims of ineffective assistance of counsel present mixed questions of law and fact that we review de novo. State v. Johnston, 2010 MT 152, ¶ 7, 357 Mont. 46, 237 P.3d 70. 5 DISCUSSION ¶11 1. Whether the improper influence statute is unconstitutionally overbroad. ¶12 A person commits the offense of threats and other improper influence in official matters “if the person purposely or knowingly . . . threatens harm to any person, the person’s spouse, child, parent, or sibling, or the person’s property with the purpose to influence the person’s decision, opinion, recommendation, vote, or other exercise of discretion as a public servant, party official, or voter.” Section 45-7-102(1)(a)(i), MCA. ¶13 For the first time on appeal, Spottedbear argues that § 45-7-102(1)(a)(i), MCA, is unconstitutionally overbroad. He asserts that we should review the statute because his trial counsel rendered ineffective assistance by failing to raise the constitutional issue below, because this Court may exercise plenary review of constitutional rights violations even where no objection has been made, and because this Court may review an unconstitutional statute under the plain error doctrine. ¶14 Spottedbear does not challenge the improper influence statute’s constitutionality as applied to him; he contends instead that the statute is facially overbroad because it prohibits a substantial amount of protected speech. Spottedbear asserts that the statute’s language is unconstitutionally overbroad under the First Amendment for three reasons: (1) the Legislature defines “harm” expansively; (2) the statute is not limited to threats of unlawful harm; and (3) by focusing on threats of harm aimed at influencing a public official’s discretion, the statute targets “the type of message that lies at the First Amendment’s heart.” Thus, Spottedbear asserts that the “statute’s plain language makes clear that it reaches far beyond proscribing unprotected speech and into proscribing 6 speech that is essential to our democracy.” Because the statute’s reach is not limited to unprotected speech, Spottedbear contends that the statute is distinguishable from statutes that we have upheld against overbreadth challenges. Spottedbear therefore argues that we should hold that the statute is unconstitutional and void his improper influence conviction in the process. ¶15 The overbreadth doctrine “is an exception to the general rule that statutes are evaluated in light of the situation and facts before the court.” State v. Lilburn, 265 Mont. 258, 264, 875 P.2d 1036, 1040 (1994). Under the doctrine, a statute that “can be applied to constitutionally protected speech and expression may be found to be invalid in its entirety, even if it could validly apply to the situation before the court.” Lilburn, 265 Mont. at 264, 875 P.2d at 1040. We have made clear, however, that a statute is unconstitutionally overbroad only if its overbreadth is not only “‘real, but substantial as well, judged in relation to the statute’s plainly legitimate sweep.’” Lilburn, 265 Mont. at 264-65, 875 P.2d at 1040 (quoting Broadrick v. Oklahoma, 413 U.S. 601, 615, 93 S. Ct. 2908, 2918 (1973)). ¶16 The test for overbreadth therefore “is not whether hypothetical remote situations exist, but whether there is a significant possibility that the law will be unconstitutionally applied.” Lilburn, 265 Mont. at 269, 875 P.2d at 1043 (citing Broadrick, 413 U.S. at 615, 93 S. Ct. at 2917-18). “In short, there must be a realistic danger that the statute itself will significantly compromise recognized First Amendment protections of parties not before the Court for it to be facially challenged on overbreadth grounds.” Lilburn, 265 Mont. at 269, 875 P.2d at 1041 (quoting Members of the City Council v. Taxpayers for Vincent, 7 466 U.S. 789, 800-01, 104 S. Ct. 2118, 2126 (1984) (hereafter Vincent)). When there is no realistic danger or significant possibility that First Amendment protections will be meaningfully compromised, we have held consistently that any unconstitutional application of a statute should be addressed on a “case-by-case” basis. E.g., Mont. Supreme Court Comm’n on the Unauthorized Practice of Law v. O’Neil, 2006 MT 284, ¶ 78, 334 Mont. 311, 147 P.3d 200; State v. Nye, 283 Mont. 505, 515, 943 P.2d 96, 103 (1997); State v. Ross, 269 Mont. 347, 356, 889 P.2d 161, 166 (1995); Lilburn, 265 Mont. at 270, 875 P.2d at 1044. ¶17 We are unpersuaded by Spottedbear’s claim that his trial counsel rendered ineffective assistance by failing to raise the statute’s alleged overbreadth below. In assessing whether counsel’s performance was deficient, we look to “whether counsel’s conduct fell below an objective standard of reasonableness measured under prevailing professional norms and in light of the surrounding circumstances.” Whitlow v. State, 2008 MT 140, ¶ 20, 343 Mont. 90, 180 P.3d 861. Spottedbear asserts that his counsel had “no plausible” justification for failing to raise a constitutional challenge because it would have ended Spottedbear’s prosecution at its inception. But § 45-7-102(1)(a)(i), MCA, serves a plainly legitimate purpose—to deter people from threatening harm to a public servant in order to influence that person’s actions as a public servant. Spottedbear acknowledges that his conduct falls within the statute’s legitimate sweep. Given these surrounding circumstances, and our overbreadth precedent discussed above, Spottedbear’s trial counsel reasonably may have concluded that an overbreadth challenge to the statute would not have been successful. 8 ¶18 Indeed, when compared “to the statute’s plainly legitimate sweep,” Spottedbear would have a high hurdle to clear in showing how the statute adversely affects the rights of others in a “real” and “substantial” way. Lilburn, 265 Mont. at 264-65, 875 P.2d at 1040. Although Spottedbear points to “hypothetical remote situations” in which the statute could be applied unconstitutionally, he would have to have demonstrated a “realistic danger” or “a significant possibility that the law will be unconstitutionally applied.” Lilburn, 265 Mont. at 265, 269, 875 P.2d at 1041, 1043. “[T]he mere fact that [Spottedbear’s appellate counsel] can conceive of some impermissible applications of [the] statute,” Lilburn, 265 Mont. at 265, 875 P.2d at 1041 (quoting Vincent, 466 U.S. at 800-01, 104 S. Ct. at 2126), is insufficient to overcome the “strong presumption that [trial] counsel’s conduct [fell] within the wide range of reasonable professional assistance,” Whitlow, ¶ 21. ¶19 The State prosecuted Spottedbear for conduct that plainly came within the statute’s legitimate sweep. Whether threatening harm under the statute would apply properly to the hypothetical situations Spottedbear presents on appeal “is irrelevant. That was not the conduct for which he was convicted, and we do not find it necessary to address that argument.” Nye, 283 Mont. at 516, 943 P.2d at 103. We decline to consider the statute’s alleged overbreadth in this appeal. “To the extent that the statute may reach constitutionally protected expression,” any constitutional deficiencies not implicated by Spottedbear’s case can be addressed at that time. Lilburn, 265 Mont. at 270, 875 P.2d at 1044. 9 ¶20 2. Whether the State presented sufficient evidence that Spottedbear threatened harm to Officer Walker with the purpose to influence Officer Walker’s discretion. ¶21 Spottedbear contends that the State did not present sufficient evidence to prove beyond a reasonable doubt that he threatened Officer Walker with the requisite “purpose to influence” Officer Walker’s discretion. Relying on State v. Plenty Hawk, 285 Mont. 183, 948 P.2d 209 (1997), Spottedbear emphasizes that he was “belligerent and uncooperative” before and after Officer Walker showed up and that his threats toward Officer Walker were “a continuation” of his “belligerent attitude.” Accordingly, Spottedbear asserts that there is no evidence in the record upon which the jury could find that, “but for [Spottedbear’s] purported purpose to influence Officer Walker’s official discretion, he would not have threatened Officer Walker.” ¶22 Relying on State v. Motarie, 2004 MT 285, 323 Mont. 304, 100 P.3d 135, and State v. Keating, 285 Mont. 463, 949 P.2d 251 (1997), the State contends that Spottedbear did not have to explicitly condition his threats in order to be convicted under the improper influence statute. The State asserts that the jury reasonably could have inferred from the evidence presented that Spottedbear threatened Officer Walker with the purpose to influence Officer Walker’s charging discretion. The State points to the fact that Spottedbear did not threaten Officer Walker until he learned that Officer Walker intended to charge him with criminal trespass. The State alleges that Spottedbear’s reliance on Plenty Hawk is misplaced because that case is factually distinguishable. Finally, the State asserts that while the evidence could have supported a contrary 10 conclusion, it does not follow that there was insufficient evidence to support the jury’s verdict. ¶23 The improper influence statute prohibits “threaten[ing] harm” to a public servant or to a public servant’s family or property “with the purpose to influence” that person’s actions as a public servant. Section 45-7-102(1)(a)(i), MCA. To show purpose, the State had to prove that it was Spottedbear’s “conscious object” to influence Officer Walker’s discretion. Section 45-2-101(65), MCA. Accordingly, the State had the burden of proving beyond a reasonable doubt that Spottedbear not only threatened Officer Walker with harm, but that he did so with the conscious object to influence Officer Walker’s actions as a public servant. While each element of an offense must be proven by sufficient evidence, Weigand, ¶ 7, “[t]he elements of a charged offense are factual in nature and their existence must be determined by the jury,” State v. Gladue, 1999 MT 1, ¶ 40, 293 Mont. 1, 972 P.2d 827. ¶24 We have consistently held that “circumstantial evidence alone is sufficient to obtain a conviction.” State v. Clausell, 2001 MT 62, ¶ 31, 305 Mont. 1, 22 P.3d 1111 (quoting State v. Lancione, 1998 MT 84, ¶ 37, 288 Mont. 228, 956 P.2d 1358) (internal quotations omitted). A person’s mental state “is rarely susceptible of direct or positive proof and therefore must usually be inferred from the facts testified to by witnesses and the circumstances as developed by the evidence.” Clausell, ¶ 31 (citation and internal quotations omitted). As such, whether a defendant acted with purpose “may be inferred from circumstantial evidence such as the acts of the accused and the facts and circumstances surrounding the offense.” Clausell, ¶ 31. Such evidence “need only be of 11 sufficient quality and quantity to legally justify a jury in finding guilt beyond a reasonable doubt, taking into consideration all of the facts and circumstances surrounding the charged offense collectively.” Clausell, ¶ 31. ¶25 In Plenty Hawk, we addressed whether there was sufficient evidence to sustain Plenty Hawk’s conviction of intimidation under § 45-5-203, MCA. Plenty Hawk, 285 Mont. at 186, 948 P.2d at 210-11. Similar to here, Plenty Hawk argued that the State failed to present evidence that his threats towards a deputy were made “with the purpose to cause another to perform or to omit the performance of any act.” Plenty Hawk, 285 Mont. at 186, 948 P.2d at 211 (quoting § 45-5-203(1), MCA). The evidence established that Plenty Hawk was intoxicated, combative, and belligerent when deputies and ambulance personnel first approached him lying in a roadway. Plenty Hawk, 285 Mont. at 184, 948 P.2d at 209-10. Plenty Hawk continued his combative behavior after being assured “that he was not under arrest” and being placed in a holding cell to be cleaned up and examined more thoroughly. Plenty Hawk, 285 Mont. at 184, 948 P.2d at 210. After Plenty Hawk “took a swing” at an ambulance attendant who was attempting to take his pulse in the holding cell, a deputy informed Plenty Hawk “that he was under arrest for the charge of Intoxicated Pedestrian and that he would be spending the night in jail.” Plenty Hawk, 285 Mont. at 184-85, 948 P.2d at 210. During the booking process, Plenty Hawk challenged a deputy to a fight and “declared that as soon as he got out of jail he was going to kick [the deputy’s] ass and terrorize [him] and his family.” Plenty Hawk, 285 Mont. at 185, 948 P.2d at 210. Plenty Hawk apologized for his behavior the next day. Plenty Hawk, 285 Mont. at 185, 948 P.2d at 210. 12 ¶26 The State contended “that Plenty Hawk’s purpose in making the threats was to cause [the deputy] to release him.” Plenty Hawk, 285 Mont. at 186, 948 P.2d at 211. In concluding that there was “no evidence in the record that the threats were made for any particular purpose,” we noted that Plenty Hawk “was belligerent and uncooperative from the time” the deputy approached him and that he was combative with ambulance attendants “prior to being informed he was under arrest.” Plenty Hawk, 285 Mont. at 186, 948 P.2d at 211. We opined that “Plenty Hawk was simply drunk and belligerent” and that “[a]t no time did Plenty Hawk state what act he might want [the deputy] to do or to omit and the State has provided no evidence to show what specific act Plenty Hawk was seeking to have done or omitted.” Plenty Hawk, 285 Mont. at 187, 948 P.2d at 211. We therefore held that there was insufficient evidence to support the jury’s verdict on the intimidation charge. Plenty Hawk, 285 Mont. at 187, 948 P.2d at 211. ¶27 In Motarie, we addressed whether the State had proven that Motarie acted with the requisite purpose under §§ 45-5-203(1) and 45-7-206(1), MCA. Motarie, ¶ 5. In that case, Motarie called Iverson, who had reported him for allegedly poaching an elk, and threatened to kill Iverson prior to Motarie’s trial. Motarie, ¶¶ 2-3. Motarie relied on Plenty Hawk in arguing that the State failed to provide evidence of his purpose in making the threats. Motarie, ¶ 7. We distinguished Plenty Hawk by noting that “Plenty Hawk was behind bars when he” threatened the deputy. Motarie, ¶ 6. We differentiated our holding in Plenty Hawk further, explaining that, “[b]y threatening the deputy with violence once released from his cell, Plenty Hawk would have made the deputy even more disposed to leaving Plenty Hawk in the cell.” Motarie, ¶ 6. 13 ¶28 We noted that the record in Motarie spoke “of a more invidious purpose” because “Iverson was the central witness to the State’s poaching case against Motarie.” Motarie, ¶ 7. We reaffirmed that, as a state of mind, criminal intent “is rarely susceptible of direct or positive proof and therefore must usually be inferred from the facts testified to by witnesses and the circumstances as developed by the evidence.” Motarie, ¶ 8 (citation and internal quotations omitted). We concluded, therefore, that “[s]een in the light most favorable to the prosecution, a reasonable jury could have determined that Motarie intended to stop Iverson from continuing his cooperation in Motarie’s prosecution and, thus, he had the requisite purpose” under the statutes. Motarie, ¶ 8. ¶29 Similarly, in Keating, we upheld a conviction of improper influence under § 45-7- 102(1)(a)(i), MCA. Keating, 285 Mont. at 477, 949 P.2d at 259. In that case, officers attempted to serve Keating with process and he told them to leave his property. Keating, 285 Mont. at 469, 949 P.2d at 254. After the officers left, Keating called 911 and threatened to kill any officer who entered his property. Keating, 285 Mont. at 469, 949 P.2d at 254-55. On appeal, Keating argued “that the State did not establish that his threat to kill officers coming on his property to serve process was made for the purpose of influencing an exercise of discretion.” Keating, 285 Mont. at 477, 949 P.2d at 260. In upholding Keating’s conviction, we noted that “Keating started yelling when told the purpose of the [officers’] visit,” and that Keating made the threats shortly after the officers left. Keating, 285 Mont. at 479-80, 949 P.2d at 261. We concluded: The evidence regarding Keating’s awareness of the [officers’] reason for being at his residence . . . and his threat after the [officers] attempted to serve him with process was sufficient to permit the jury to infer that 14 Keating purposely or knowingly threatened the [officers] with the purpose to influence their exercise of discretion regarding where and when to accomplish service of process on him. Keating, 285 Mont. at 480, 949 P.2d at 261. ¶30 Similar to Plenty Hawk, the evidence here establishes that Spottedbear was intoxicated and agitated when Officer Walker first approached him. The evidence also shows, however, that unlike in Plenty Hawk, Spottedbear was not combative with the officer prior to being placed under arrest. The evidence establishes further that Spottedbear did not begin threatening Officer Walker until after Officer Walker informed Spottedbear that he was going to charge him with criminal trespass. At that point, Spottedbear became more agitated and brought up the previous incident in which he had assaulted Officer Walker. Spottedbear then yelled that he had seen Officer Walker and his “fat fucking wife” out in public. After Officer Walker advised him to be quiet, Spottedbear then yelled, multiple times: “I will fucking kill you, your fat wife and your whole family.” ¶31 Plenty Hawk’s threats to kill the officer after he got out of jail could have made the officer even more disposed to keep Plenty Hawk in jail. Motarie, ¶ 6. Here, in contrast—viewing the evidence in the light most favorable to the prosecution—the jury could have found that Spottedbear thought that his threats to kill Officer Walker and his family might influence Officer Walker’s decision to actually charge him with criminal trespass. Moreover, unlike in Plenty Hawk, the State introduced evidence showing as much. Officer Walker testified that he still had discretion and the ability to decide whether he was going to cite Spottedbear for criminal trespass at the time Spottedbear 15 threatened him and his family. Officer Walker testified that Spottedbear’s threats concerned him because he had seen Spottedbear near his house, his wife was seven months pregnant, and Spottedbear had previously assaulted him. Finally, Officer Walker testified that intoxicated people had threatened him in the past, but that this time was different because it was the first time anyone had ever threatened his family, and Spottedbear made clear that he had seen Officer Walker and his wife in public. ¶32 True, Spottedbear did not explicitly state the condition upon which his threats were based. But such direct proof is unnecessary to show Spottedbear’s purpose to influence, which could “be inferred from the facts testified to by witnesses and the circumstances as developed by the evidence.” Motarie, ¶ 8; Clausell, ¶ 31; see Keating, 285 Mont. at 479-80, 949 P.2d at 261. Although the evidence could have supported a finding that Spottedbear was generally belligerent and did not have the purpose to influence Officer Walker’s discretion, our inquiry on appeal is whether “sufficient evidence exists to support the verdict.” Weigand, ¶ 7. The jury weighed the conflicting evidence based on Officer Walker’s credibility and determined that the State’s version of the events should prevail. Weigand, ¶ 7. Such a determination is “exclusively within the province of the trier of fact.” State v. Bower, 254 Mont. 1, 8, 833 P.2d 1106, 1111 (1992). ¶33 We conclude, viewing the evidence in the light most favorable to the prosecution, that any rational trier of fact could have found beyond a reasonable doubt that Spottedbear threatened Officer Walker and his family with the purpose to influence Officer Walker’s discretion in charging him with criminal trespass. Accordingly, the 16 State presented sufficient evidence to convict Spottedbear of improper influence under § 45-7-102(1)(a)(i), MCA. ¶34 3. Whether the State presented sufficient evidence to convict Spottedbear of criminal trespass. ¶35 Criminal trespass to property requires the State to show that “(1) a ‘person knowingly,’ (2) ‘enters or remains unlawfully in,’ (3) an ‘occupied structure’ or ‘the premises of another.’” State v. Robertson, 2014 MT 279, ¶ 19, 376 Mont. 471, 336 P.3d 367 (quoting § 45-6-203(1), MCA). A person who is “licensed, invited, or otherwise privileged to do so” cannot be convicted of criminal trespass. Section 45-6-201(1), MCA; Robertson, ¶¶ 19, 24. Such privilege, however, “may be revoked at any time by personal communication of notice by the landowner or other authorized person to the entering person.” Section 45-6-201(1), MCA. A person “remains unlawfully” pursuant to statute—and therefore commits criminal trespass—if the person remains upon the premises after his or her privilege is revoked. Sections 45-6-201(1), -203(1), MCA. ¶36 Spottedbear asserts that he—along with all members of the public—had a license to be in the Wal-Mart store. Accordingly, Spottedbear contends, “to secure a trespass conviction in a case where a person at one time had a license to be on a property, the State must present adequate proof that the landowner or another authorized person revoked the license.” Spottedbear argues that the State presented no evidence that an authorized person revoked his license to be in the store. Spottedbear notes that Officer Walker—who was the only witness at the trial—testified that he, and not an authorized person, told Spottedbear to leave the property. 17 ¶37 The State does not dispute that Spottedbear had a license to be at the store. The State argues, however, that it presented evidence that a store employee called the police and the store’s manager informed Officer Walker of Spottedbear’s behavior in the store. At that point, Officer Walker advised Spottedbear to leave. Thus, the State contends that “a rational jury could have inferred that the manager not only desired that Spottedbear leave the store but that she authorized the officers to notify him that his privilege to remain in the store had been revoked and to escort him from the store on her behalf.” ¶38 Officer Walker testified that he spoke with Janet Sherod upon arriving at the scene. He testified further that after speaking to Sherod, he advised Spottedbear to leave the premises. On cross-examination, Officer Walker testified that Sherod told him that “her employees” had called the police because another customer had accused Spottedbear of shoplifting and that an argument ensued. Officer Walker testified further that Sherod told him that Spottedbear had been yelling and swearing inside the store. ¶39 Although a jury could infer from Officer Walker’s testimony that an authorized person revoked Spottedbear’s license to be at Wal-Mart, the State presented no evidence that Spottedbear remained unlawfully after his privilege was revoked. Officer Walker testified that after asking Spottedbear to leave, Spottedbear walked towards the exit, turned around and yelled at Sherod, and was then placed under arrest. Even viewing this evidence in the light most favorable to the prosecution, we conclude that no rational trier of fact could have found beyond a reasonable doubt that Spottedbear remained unlawfully after Officer Walker directed him to leave. Accordingly, we conclude that the State did not present sufficient evidence to convict Spottedbear of criminal trespass. 18 ¶40 4. Whether the District Court properly admitted evidence of Spottedbear’s prior incident with Officer Walker. ¶41 Spottedbear filed a motion in limine seeking to limit the admission of evidence relating to his prior incident with Officer Walker. Spottedbear argued that such evidence had little probative value when weighed against the high likelihood of substantial prejudice to Spottedbear. In addressing Spottedbear’s motion, the court stated in open court that details regarding the prior incident were fair game except the conviction . . . . So I don’t want any testimony that he’s actually convicted of any crimes in . . . the prior incident involving Officer Walker. So all of the other circumstances surrounding the offenses are admissible, but the actual conviction itself, I think you can get in everything you need under [M. R. Evid.] 404(b) without . . . admitting evidence of the actual conviction. . . . And for the record, under Rule 404(b), . . . the Court finds that the evidence of the actual convictions would be unduly prejudicial, would confuse the issues, and are unnecessary in order to show the knowledge, intent and motive that the State is trying to prove. Before the State introduced the evidence of the prior incident during trial, the Court read the following limiting instruction to the jury: The State will now offer evidence that the Defendant at another time engaged in other wrongs or acts. That evidence is not admitted to prove the character of the Defendant, or to show he acted in conformity therewith. The only purpose of admitting that evidence is to show proof of motive, opportunity, plan, knowledge, identity, or absence of mistake or accident. You may not use that evidence for any other purpose. The Defendant is not being tried for that other wrong or act. He may not be convicted for any other offense than that charged in this case. For the jury to convict a Defendant of any other offense than that charged in this case may result in unjust double punishment of the Defendant. 19 Both the State and Spottedbear’s counsel questioned Officer Walker about the prior incident and discussed the prior incident in their closing arguments to support their respective arguments. The District Court gave the limiting instruction again prior to the closing arguments. ¶42 On appeal, Spottedbear contends that the District Court improperly allowed the State to present evidence of his prior incident with Officer Walker. Spottedbear asserts that the prior incident was not relevant and was thus inadmissible under the Montana Rules of Evidence. Spottedbear asserts further that the incident’s probative value “was extremely limited if not non-existent under the theory argued by the State” because it showed that physically assaulting Officer Walker—let alone just threatening him—would not influence his discretion, and the State’s assertion that it was relevant to demonstrate the severity of Spottedbear’s threats was misplaced because the severity of the threat is not an element of improper influence. ¶43 More, Spottedbear alleges, the prior incident’s probative value was outweighed by its danger of unfair prejudice. Spottedbear argues that the message that the prior incident sent to the jury was that “Spottedbear is someone who follows through with his threats of violence.” By focusing on the prior incident and the severity of his threats, Spottedbear asserts, the “State’s argument invited the jury to ignore the law and convict on an improper basis.” Finally, Spottedbear contends that the District Court’s limiting instruction did not minimize the prejudice caused by the prior incident’s admission, especially when “the State’s theory of relevance was unintuitive and risked much unfair prejudice.” 20 ¶44 Generally, “[a]ll relevant evidence is admissible” unless otherwise provided by law. M. R. Evid. 402. 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.” M. R. Evid. 401. M. R. Evid. 404(b), however, places a limitation on the admission of otherwise relevant evidence of “other crimes, wrongs, or acts . . . to prove the character of a person in order to show action in conformity therewith.” Nevertheless, prior act evidence may “be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.” M. R. Evid. 404(b). In other words, “[e]vidence of prior bad acts is not admissible if it is offered for a purpose that requires the inference from bad act to bad person to guilty person, but may be admissible if it proves a material issue without requiring any inference to the defendant’s criminal disposition.” State v. Franks, 2014 MT 273, ¶ 14, 376 Mont. 431, 335 P.3d 725 (citations and internal quotations omitted). ¶45 Even if such evidence “is offered for a valid non-propensity purpose, M. R. Evid. 404(b) may require its exclusion if the nature of the evidence might tempt the jury to decide the case against the defendant on an improper propensity basis.” Franks, ¶ 15 (citation and internal quotations omitted). In this way, M. R. Evid. 404(b) must be viewed in concert with M. R. Evid. 403, which allows the exclusion of relevant evidence if its probative value is substantially outweighed by the danger of unfair prejudice. Evidence that is offered for a valid purpose under M. R. Evid. 404(b) is still subject to the balancing test prescribed by M. R. Evid. 403. 21 Franks, ¶ 15 (citing State v. Stewart, 2012 MT 317, ¶ 67, 367 Mont. 503, 291 P.3d 1187). M. R. Evid. 403, in turn, “does not require the exclusion of relevant evidence simply because it is prejudicial.” Stewart, ¶ 68. Rather, the rule “confers discretion on the trial judge to exclude relevant evidence that poses a danger of ‘unfair’ prejudice, but only if the danger of unfair prejudice ‘substantially outweigh[s]’ the evidence’s probative value.” Stewart, ¶ 68 (quoting M. R. Evid. 403). The danger of unfair prejudice substantially outweighs probative value “when the evidence will prompt the jury to decide the case on an improper basis.” Stewart, ¶ 68 (citation omitted). A district court has “broad discretion to admit or exclude evidence under M. R. Evid. 403.” State v. Pulst, 2015 MT 184, ¶ 21, 379 Mont. 494, 351 P.3d 687. ¶46 Under M. R. Evid. 404(b), the State could not use evidence of the prior incident to prove Spottedbear’s character in order to show that he acted “in conformity therewith.” As the District Court noted, however, the prior incident could be used under M. R. Evid. 404(b) “in order to show the knowledge, intent and motive that the State [was] trying to prove.” Our review of the record establishes that the State used the prior evidence for just such a purpose. Spottedbear’s arguments to the contrary are belied by the fact that during the trial he used the prior incident to argue that he did not threaten Officer Walker with the purpose to influence Officer Walker’s discretion. In fact, Spottedbear used the prior incident to demonstrate that he had a propensity for making such threats and knew that threats would not influence Officer Walker. The prior incident, therefore, was used by both parties to persuade the jury in determining Spottedbear’s purpose under § 45-7- 102(1)(a)(i), MCA. Spottedbear has not demonstrated that the danger of unfair prejudice 22 from introducing evidence of the prior incident substantially outweighed the evidence’s probative value. Accordingly, we conclude that the District Court did not abuse its discretion in allowing evidence of the prior incident under M. R. Evid. 403 and 404(b). ¶47 5. Whether Spottedbear’s trial counsel rendered ineffective assistance of counsel. ¶48 Spottedbear asserts that his trial counsel’s failure to object to the State’s definition of “purpose” compromised the improper influence verdict, and constitutes ineffective assistance of counsel. Spottedbear points out that the District Court instructed the jury that “[a] person acts purposely, or with a purpose, when it is the person’s conscious object to engage in conduct of that nature.” Such an instruction, Spottedbear contends, fails to adequately instruct the jury on the meaning of “purpose” as used in § 45-7- 102(1)(a)(i), MCA, because the statute requires that a person act purposely to cause a result, not to engage in conduct. Spottedbear argues that his counsel’s failure to object to the State’s jury instruction on “purpose” is “glaring and lacks plausible justification” and represents a “failure to use the law to bolster [his] theory of the case.” As such, Spottedbear contends that his counsel’s failure to object “lessened the State’s burden” and prejudiced him. Spottedbear contends further that “[t]here is a reasonable possibility that, but for trial-counsel’s failure to procure proper instruction, the trial would have ended differently,” which requires a new trial. ¶49 We apply a two-part test in analyzing claims of ineffective assistance of counsel. It requires a defendant to “demonstrate (1) that counsel’s representation was deficient and (2) that counsel’s deficiency was prejudicial by establishing that there was a reasonable probability that, but for counsel’s errors, the result of the proceeding would have been 23 different.” Johnston, ¶ 15. A defendant must satisfy both prongs of this test “in order to prevail on an ineffective assistance of counsel claim; thus, an insufficient showing on one prong negates the need to address the other.” State v. Mitchell, 2012 MT 227, ¶ 21, 366 Mont. 379, 286 P.3d 1196. The inquiry under the second prong “focuses on whether counsel’s deficient performance renders the trial result unreliable or the proceeding fundamentally unfair.” Mitchell, ¶ 22. ¶50 We decline to consider whether Spottedbear’s counsel provided deficient representation by failing to object to the District Court’s “purpose” instruction. Spottedbear has not established that there was a reasonable probability that, but for his counsel’s error, the result of the proceeding would have been different had a result-based definition of purpose been given. The District Court instructed the jury as follows: To convict the Defendant of the charge of threat and other improper influence in official matters, the State must prove the following elements: 1. That the Defendant threatened harm to Officer Walker, his spouse, child, parent, or sibling: AND 2. That the Defendant did so with the purpose to influence the exercise of discretion as a public servant[.] This instruction made clear that Spottedbear had to act with the “purpose to influence.” Even with the conduct-based definition of “purpose,” Spottedbear has not, and cannot, demonstrate that the District Court’s instruction “renders the trial result unreliable or the proceeding fundamentally unfair.” Mitchell, ¶ 22. 24 CONCLUSION ¶51 We affirm Spottedbear’s conviction of improper influence and reverse his conviction of criminal trespass. The case is remanded for entry of an amended judgment in accordance with this Opinion. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

October 4, 2016

6607c48f-db5f-49b4-8aca-7ea16527b6e1

Belanus v. State

2016 MT 262N

DA 14-0782

Montana

Montana Supreme Court

DA 14-0782 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 262N DUANE RONALD BELANUS, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2011-1087 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Duane Ronald Belanus (Self-Represented), Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Helena, Montana Submitted on Briefs: September 7, 2016 Decided: October 18, 2016 Filed: __________________________________________ Clerk 10/18/2016 Case Number: DA 14-0782 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Duane Ronald Belanus appeals from the First Judicial District Court’s denial of his petition for postconviction relief (PCR). We affirm. ¶3 Belanus has been before this Court multiple times since his June 2009 jury conviction of numerous offenses including sexual intercourse without consent of his then-girlfriend. Belanus was sentenced to life in prison without parole. He appealed his sentence and we affirmed it in State v. Belanus, 2010 MT 204, 357 Mont. 463, 240 P.3d 1021, which provides factual details that will not be repeated here. Belanus subsequently sued his victim, the county attorney, deputy county attorney, law enforcement investigator, sheriff, multiple sheriff’s deputies, probation officer, both of his attorneys, and a judge. He appealed the majority of these cases, without success, to the Montana Supreme Court, the Ninth Circuit Court of Appeals, and the United States Supreme Court. ¶4 In the case before us, Belanus, acting pro se, filed a petition for postconviction relief in November 2011. He alleged at least thirteen trial errors including, but not limited to, improper admission of evidence, fabrication of evidence, ineffective assistance 3 of counsel, and prosecutorial vindictiveness. Before the State filed its response, he moved to amend his petition to add a fourteenth count. The District Court granted the motion. Belanus subsequently filed five more motions to amend all of which the District Court denied citing § 46-21-105, MCA.1 Belanus appealed the court’s interlocutory denial of his motions to amend and in September 2012 we dismissed the appeal without prejudice. ¶5 In October 2014, the District Court denied Belanus’s PCR. In the court’s twenty-nine-page detailed order, it identified and refused to address claims that Belanus had already raised on appeal. It then addressed Belanus’s numerous claims of ineffective assistance (IAC) by pretrial, trial, and appellate counsel, concluding that Belanus was provided effective counsel or was not prejudiced by counsel’s choices and decisions. The District Court further exercised its discretion and denied Belanus’s request for a hearing on his petition and appointment of counsel to represent him at the hearing. The court concluded that Belanus had presented “none of the cornerstones of a prima facie case for postconviction relief.” ¶6 In his appeal before us, Belanus puts forth eleven allegations of error, many of which are difficult to understand and are confusing. We acknowledge, however, that the majority of them pertain to his claims of ineffective assistance and set forth allegations that the District Court committed reversible error by repeatedly determining that his claims were without merit. We disagree. It is apparent from the District Court’s order 1 Section 46-21-105(1)(a), MCA, provides in relevant part: “All grounds for relief claimed by a petitioner under 46-21-101 must be raised in the original or amended original petition. The original petition may be amended only once. . . .” 4 that the District Court carefully reviewed Belanus’s PCR claims, analyzed each claim under the relevant law, and reached legally supported conclusions. Consequently, the court neither erred nor abused its broad discretion in denying Belanus’s petition for postconviction relief on IAC grounds. We note, however, that Belanus asserts that the District Court, relying on Rosling v. State, 2012 MT 179, ¶ 45, 366 Mont. 50, 285 P.3d 486, denied his petition because he failed “to call an expert to the stand to substantiate his IAC claims.” While the court references Rosling in its order, it does not base its denial of Belanus’s PCR on Belanus’s failure to put forth an expert. Rather, the court set out independent and sufficient grounds for its ruling. Moreover, Rosling does not establish a universal requirement for expert testimony in every postconviction petition claiming IAC. ¶7 We acknowledge that Belanus raises issues on appeal that are separate from his claims of IAC; however, we decline to address each of Belanus’s remaining issues individually. Rather, having reviewed the issues, the District Court’s order, and Belanus’s arguments on appeal, we affirm the denial of Belanus’s petition. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for noncitable memorandum opinions. In the opinion of the Court, the District Court’s findings of fact are not clearly erroneous, its interpretation and application of the law was correct, and its ruling was not an abuse of discretion. ¶9 Affirmed. 5 /S/ MICHAEL E WHEAT We Concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 18, 2016

632fc221-6a5c-47de-a302-81a82ade69b2

Missoula Electric Cooperative v. Jon Cruson Inc.

2016 MT 267

DA 16-0050

Montana

Montana Supreme Court

DA 16-0050 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 267 MISSOULA ELECTRIC COOPERATIVE, Petitioner and Appellant, v. JON CRUSON, INC., Respondent and Appellee. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-15-407 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: David B. Cotner, Anna C. Conley, Contract Attorney, Datsopoulos, MacDonald & Lind P.C., Missoula, Montana Edward “Rusty” Murphy, Murphy Law Offices, PLLC, Missoula, Montana For Appellee: David C. Berkoff, Berkoff Law Firm, P.C., Missoula, Montana Nate McConnell, McConnell Law Office, P.C., Missoula, Montana Submitted on Briefs: September 14, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 16-0050 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Missoula Electric Cooperative (MEC) appeals the order of the Fourth Judicial District Court, Missoula County, affirming the Human Rights Commission’s (Commission) decision to reverse its Hearing Examiner’s grant of summary judgment to MEC on the age discrimination claim filed by Appellee Jon G. Cruson. We restate the issue as follows: ¶2 Did the Human Rights Commission err by determining that the Hearing Examiner improperly granted summary judgment to MEC? ¶3 We affirm the Commission’s decision and remand this matter to the Hearing Examiner for further proceedings. The facts cited below are drawn from the record as it exists for summary judgment purposes. FACTUAL AND PROCEDURAL BACKGROUND ¶4 In 2011, MEC and the International Brotherhood of Electrical Workers Local Union 44 (Union), as authorized by their collective bargaining agreement (CBA), entered into an Apprenticeship Standards for Electrical Lineman Agreement (Agreement), which was in full force and effect at all times relevant to this litigation. The Agreement governed the selection and training of apprentice linemen, and the administration of the apprenticeship program, for the Union, MEC, and MEC’s employees. The Agreement created the Joint Apprentice Training Committee (JATC), which is the entity responsible for selecting and training apprentice linemen. As provided in the Agreement and CBA, the JATC is composed of four people, two selected by MEC and two selected by the Union. 3 ¶5 The JATC, as established by MEC and the Union, is responsible for screening, recommending, and training apprentice linemen. Prospective linemen for each apprenticeship are interviewed by the JATC, which recommends a candidate for MEC’s approval. Approved candidates then receive training by the JATC. If a candidate is not approved by MEC, then the JATC begins the process again to select and present another candidate. The Agreement and the CBA grant to the JATC duties in the process of selecting and training linemen that are to be exercised independently from the Union and MEC.1 ¶6 Cruson was employed by MEC as a Master Electrician from 2001 until 2013. In 2012, MEC created a new apprentice lineman position. Cruson applied for this position and was interviewed by the JATC, along with other applicants. At the time, all of the JATC members were supervisory or managerial level MEC employees, including: 1) an Area Foreman; 2) the Operations Manager; 3) the Manager of Engineering; and 4) a Crew Foreman. Cindy Woods, an employee of MEC, also attended and participated in the interviews. An agency investigative report described Woods as the “payroll/benefits administrator” for MEC, and Mark Hayden, MEC’s General Manager, described Woods, in his deposition, as “the HR person for MEC.” Upon completion of its interview 1 The Agreement provided that the JATC would “[e]nsure that the employer provides the Apprentices with reasonably continuous employment and training during the term of the Apprenticeship, including diversified training in all major work experience of the trade.” It provided that JATC would “[e]nsure that [the] Apprenticeship standards are kept up-to-date and that the Standards meet the requirements of the trade at all times and to supervise the enforcement of all provisions of the standards. The employer may modify these standards at any time by the recommendation of [the JATC].” Lastly, it also provided that “[t]he JATC will have full authority to supervise the enforcement of these Standards. Its decision will be final and binding on the employer, the sponsor, and the apprentice. . . .” (Emphasis added.) 4 process, the JATC selected another individual as its first choice for the apprenticeship and made this recommendation to MEC, while Cruson and two other employees, of similar age, were ranked in a three-way tie for second place. MEC did not approve the candidate recommended by the JATC, and no one was initially hired for the position. ¶7 Cruson inquired and was informed by Hayden that there were no qualified candidates for the position. Cruson, along with the two other employees, in the three- way tie, lodged a grievance with the Union, asserting age discrimination in the hiring process. The discrimination claims were based on statements allegedly made by members of the JATC expressing negative views about hiring older candidates. One member remarked that an older candidate’s application “was a waste of [his] time,” and that the older candidate “should have applied for [the position] years ago when [he] was younger.” A second member said he “would never hire an apprentice lineman who was older” because he would not get his “money’s worth out of [the apprentice] for all that training,” or other words to that effect. The Union did not pursue a grievance over the matter, and Cruson and the other two candidates filed complaints against MEC with the Montana Human Rights Bureau, alleging age discrimination. ¶8 A Human Rights Bureau Investigator issued “reasonable cause findings” in favor of Cruson and Greg Flesch, one of the other older candidates. After the findings were issued, MEC ordered the JATC to reconvene and recommend either Cruson or Flesch for the apprenticeship position. The JATC selected Cruson and MEC offered him the position. However, Cruson declined the offer, claiming MEC’s management had stated 5 he would not be supported by management or the other linemen, and instead elected to continue to pursue his age discrimination complaint, naming only MEC. ¶9 In the proceeding, MEC moved for summary judgment on the claim, arguing that the JATC, whose members’ statements formed the basis of Cruson’s claim, was not an agent of MEC, but a separate and independent entity over which it had no control. The Hearing Examiner granted MEC’s motion, noting the JATC acted independently of MEC and “[t]here is no material and substantial evidence that [the] JATC was an agent of MEC[]. Cruson did not make any claims against [the] JATC. As a matter of law, Cruson cannot prove a case against MEC. His complaint must be dismissed in its entirety.” ¶10 Cruson appealed to the Commission, which overturned its Hearing Examiner’s decision, concluding the “facts presented by the hearings officer in the Order do not support the legal conclusion that there is no agency relationship between [MEC] and the [JATC].” The Commission’s order remanded the matter to the Hearing Examiner for further proceedings. ¶11 MEC appealed to the District Court, which held the Commission properly reversed the Hearing Examiner’s decision because Cruson had presented evidence creating a genuine issue of material fact about whether the JATC was acting as an agent of MEC. ¶12 MEC appeals. STANDARDS OF REVIEW ¶13 An agency’s conclusions of law are reviewed to determine if they are correct. This same standard of review is applicable to both the district court’s review of the 6 administrative decision and our subsequent review of the district court’s decision. Pennaco Energy, Inc. v. Mont. Bd. of Envtl. Review, 2008 MT 425, ¶ 18, 347 Mont. 415, 199 P.3d 191 (citing Indian Health Bd. v. Mont. Dep’t of Labor, 2008 MT 48, ¶ 11, 341 Mont. 411, 177 P.3d 1029). ¶14 The standard of review for agency decisions under the Montana Administrative Procedures Act, in relevant part, states: “The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. . . .” Section 2-4-704(2), MCA; Hofer v. Mont. Dep’t of Pub. Health and Human Servs., 2005 MT 302, ¶ 12, 329 Mont. 368, 124 P.3d 1098. ¶15 Here, we examine the Commission’s reversal of the Hearing Examiner’s granting of summary judgment. We consider summary judgment pursuant to M. R. Civ. P. 56, and review the Commission’s final agency decision de novo. Summary judgment is an extreme remedy that should be granted only when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Hajenga v. Schwein, 2007 MT 80, ¶ 11, 336 Mont. 507, 155 P.3d 1241 (citing Lee v. USAA Cas. Ins. Co., 2001 MT 59, ¶ 25, 304 Mont. 356, 22 P.3d 631). Under Rule 56, an agency should render a judgment “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 the movant is entitled to judgment as a matter of law.” M. R. Civ. P. 56(c)(3); Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200 (citing Corporate Air v. 7 Edwards Jet Ctr., 2008 MT 283, ¶ 24, 345 Mont. 336, 190 P.3d 1111). The party moving for summary judgment has the initial burden of establishing both the absence of genuine issues of material fact and entitlement to judgment as a matter of law. Roe, ¶ 14 (citing Corporate Air, ¶ 25). If the moving party meets this burden, then the burden shifts to the nonmoving party to establish that a genuine issue of material fact does exist. Roe, ¶ 14 (citing Corporate Air, ¶ 25). DISCUSSION ¶16 Did the Commission err by determining that the Hearing Examiner improperly granted summary judgment to MEC? ¶17 MEC argues that MEC and the JATC operate independently of each other and there is no agency relationship between the two. MEC argues the lack of evidence to the contrary requires a determination that summary judgment on the claim was properly entered. Cruson answers that an agency relationship exists because MEC conferred authority to the JATC to conduct candidate selection and training for the benefit of MEC and, further, MEC exerted actual control over the JATC. Cruson argues his age discrimination complaint is properly filed against MEC because it is the principal in an agency relationship with the JATC. ¶18 During the Commission hearing, Commissioner Sheri Sprigg listed several facts that could support an agency relationship between MEC and the JATC, including: 1) the JATC was created by MEC; 2) the JATC had no purpose other than to review applications for MEC; 3) all JATC members were MEC employees; 4) the JATC had no assets or staff of its own; 5) MEC’s human resource person participated in meetings of 8 the JATC; 6) the JATC was known by MEC employees as “the hiring committee”; and 7) MEC reconvened the JATC to conduct a follow-up selection meeting. ¶19 Apprenticeship agreements are the product of statute and are generally governed by Title 39, chapter 6, MCA. Apprenticeship agreements are “a written agreement between an employer or an association of employers and an organization of employees describing conditions of employment for apprentices.” Section 39-6-105(1)(b), MCA. The Agreement in this case was entered between MEC and the Union. It authorized the creation of a joint apprenticeship training committee and outlined the general powers and duties of the JATC: The Joint Apprenticeship and Training Committee established under these Standards shall be the sole administrative body for the apprenticeship and training program outlined in these Standards. The Committee shall have full authority and responsibility to install, regulate, supervise, control and operate the apprenticeship program and shall have complete authority to establish and enforce rules and requirements governing the qualifications, education, training, selection, and supervision of apprentices. ¶20 Many of the factual assertions offered by Cruson as indicative of an agency relationship are nothing more than inherent characteristics of the typical structure and organization of a joint apprenticeship committee, as the Hearing Examiner correctly reasoned. While MEC had a hand in “creating” the JATC at issue here, MEC’s involvement was not unilateral. The JATC was created only after joint action by MEC in cooperation with the Union, pursuant to the CBA. The fact that the JATC was referred to as “the hiring committee” or as the “MEC JATC” is mere nomenclature or slang and provides no material evidence of an agency relationship. The assertion that the JATC 9 “worked for” MEC or had no other purpose than to screen applicants for MEC contradicts the Agreement and the CBA, which clearly demonstrate the JATC was designed to serve MEC, the Union, and employees seeking to advance their careers by entering the apprenticeship program. Indeed, as noted by the Hearing Examiner, under the governing agreements, MEC did not have control over which candidates would be recommended for apprenticeship positions. That all members of the JATC were employees of MEC and that they all held supervisory positions are, likewise, functions of the governing agreements: the JATC provides services for employees of MEC, and the people serving on the JATC are selected by MEC’s management and the Union. If Cruson did not like who was selected by the Union to serve on the JATC, he should have taken that up with the Union. ¶21 However, there are several factual assertions which, when taken together, could demonstrate that, despite the governing agreements, MEC was exercising influence over the JATC in a way indicative of an agency relationship that would preclude summary judgment on the issue. First, Woods, a human resources representative of MEC, participated in the interviews and the applicant scoring process. Although Woods’ scoring of the applicants apparently was not included in the JATC’s final totals, her presence and participation signified an enhanced influence over the process by MEC not contemplated by the governing agreements. Because of a doctor’s appointment, Woods did not also participate in the JATC’s final selection meeting, about which Hayden stated in his deposition that “[Woods] had a doctor’s appointment, couldn’t attend, but I wanted 10 to get [the selection] meeting in before [Labor Day Weekend].” Hayden’s statement itself provides an indication that MEC was exercising influence over at least the timing of the JATC’s selection process. ¶22 Second, after the “reasonable cause findings” were issued by the Human Rights Bureau Investigator, MEC ordered the JATC to reconvene and select either Cruson or Flesch for the open apprenticeship. Flesch testified, in his deposition, that normally when the JATC’s recommended apprentice candidate was not approved, then the position was reopened and the process began anew. However, here MEC ordered the JATC to choose either Cruson or Flesch, two of the three individuals who had tied for second place during the initial interview process. This conclusion is supported by the deposition testimony of Nick Labbe, a JATC committee member. Labbe testified the sole purpose for reconvening the JATC was to make a selection between Cruson and Flesch, and no other candidates were considered. Finally, the record indicates that it had been made known to the JATC that Cruson was MEC’s preferred candidate, influencing his ultimate selection by the JATC. ¶23 Summary judgment “is an extreme remedy that should be granted only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.” Hajenga, ¶ 11 (citing Lee, ¶ 25). While we take no position on the merits of Cruson’s claim, we agree with the Commission that for purposes of summary judgment, Cruson has met his burden to demonstrate issues of material fact about his contention that MEC was exerting control over the JATC such that the JATC was acting 11 as MEC’s agent. Consequently, the Commission did not err in reversing the entry of summary judgment, and remanding this matter for further proceedings on Cruson’s claim.2 The District Court correctly affirmed the Commission. ¶24 Affirmed and remanded to the Hearing Examiner for further proceedings consistent with this opinion. /S/ JIM RICE We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER 2 MEC also offers an argument that the District Court erred by citing to an order entered by a District Court in a related case. We did not consider this citation in reaching our decision, and thus the issue is moot.

October 25, 2016

9e15d557-f05a-424f-8ea9-c1382d917628

Flathead Bank of Bigfork, Montana v. Masonry by Muller, Inc.

2016 MT 269

DA 16-0226

Montana

Montana Supreme Court

DA 16-0226 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 269 FLATHEAD BANK OF BIGFORK, MONTANA, a Montana Corporation, Plaintiff and Appellee, v. MASONRY BY MULLER, INC., a Montana Corporation, and WILLIAM MULLER, Defendants and Appellants. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV-13-1153C Honorable Heidi Ulbricht, Presiding Judge COUNSEL OF RECORD: For Appellants: William Muller (Self-Represented), Kalispell, Montana For Appellee: Randall S. Ogle, Ogle & Worm, PLLP, Kalispell, Montana Submitted on Briefs: September 21, 2016 Decided: October 25, 2016 Filed: __________________________________________ Clerk 10/25/2016 Case Number: DA 16-0226 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 William Muller (Muller) appeals from the order of the Eleventh Judicial District Court, Flathead County, granting Flathead Bank of Bigfork’s (Flathead Bank) motion for summary judgement. We affirm. ¶2 We restate the issues on appeal as follows: Issue one: Did the District Court err in finding that the issuance of an IRS Form 1099-C does not constitute a discharge of debt? Issue two: Did the District Court err in finding that Muller could not personally appear on behalf of Masonry? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Between March 2010 and May 2013, Masonry by Muller, Inc. (Masonry) and Flathead Bank entered into four promissory notes totaling $170,622.88. Muller signed the promissory notes, individually and as president of Masonry, and he personally guaranteed three of the loans through separate commercial guaranties. Masonry and Muller failed to pay the installments due on the promissory notes and Flathead Bank subsequently issued an IRS Form 1099-C to Muller, naming September 18, 2013, as the date of the identifiable event.1 In November 2013, Flathead Bank filed a complaint 1 Under federal regulations implementing the IRS reporting requirements of 26 U.S.C. § 6050P (2012), certain entities that discharge an indebtedness “must file an information return on Form 1099-C with the Internal Revenue Service. Solely for purposes of the reporting requirements of section 6050P and this section, a discharge of indebtedness is deemed to have occurred . . . if and only if there has occurred an identifiable event described in paragraph (b)(2) of this section, whether or not an actual discharge of indebtedness has occurred on or before the date on which the identifiable event has occurred.” 26 C.F.R. § 1.6050P-1(a) (2013). The “identifiable events” that trigger the IRS reporting requirement “include discharge through the debtor's filing for bankruptcy, the expiration of the statute of limitations for collection, discharge by agreement of the parties, a creditor’s decision ‘to discontinue collection activity and discharge 3 alleging that Muller and Masonry had defaulted on all four loans and that it was entitled to the outstanding balance of the loans. Muller answered the complaint personally, but did not file an answer on behalf of Masonry. ¶4 On October 28, 2015, Flathead Bank filed a motion for summary judgment, arguing it had shown that Muller and Masonry owed a valued and existing debt, nonpayment of the debt, and present ownership of the debt. Muller denied owing the amount requested by Flathead Bank and stated that Masonry was insolvent and non- existent. He also argued that Flathead Bank’s filing of the IRS Form 1099-C cancelled his debt to the Bank. Flathead Bank contended that the filing of the Form 1099-C is an IRS requirement, even where a debt has not been discharged, and that the form alone did not cancel the debt. The District Court granted Flathead Bank’s motion for summary judgement and Muller filed a timely notice of appeal with this Court. STANDARD OF REVIEW ¶5 We review a district court’s grant of summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as the district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Pilgeram, ¶ 9. Under Rule 56(c), summary judgment will be granted if the moving party can show there is no genuine debt,’ and ‘expiration of the non-payment testing period.’” FDIC v. Cashion, 720 F.3d 169, 178 (4th Cir. 2013); See 26 C.F.R. § 1.6050P-1(b)(2)(i). 4 issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200. DISCUSSION ¶6 Issue one: Did the District Court err in finding that the issuance of an IRS Form 1099-C does not constitute a discharge of debt? ¶7 Muller first appeals from the District Court’s finding that Flathead Bank’s filing of the IRS Form 1099-C did not extinguish his debt. The court determined that the filing of the form did not constitute the release of Muller’s debt; rather, the court found that it was an informational return Flathead Bank was required by law to file in this circumstance and, on its own, did not affect the legal obligations of the parties. On appeal, Muller urges this court to hold that filing an IRS Form 1099-C constitutes prima facie evidence of an intent to discharge a loan. We decline to do so. ¶8 A small minority of courts in other jurisdictions have held that the filing of an IRS Form 1099-C alone is prima facie evidence of a discharge, which then requires the creditor to prove that the form was filed by mistake or pursuant to other IRS requirements. See, e.g., Amtrust Bank v. Fossett, 224 P.3d 935 (Ariz. Ct. App. 2009); Franklin Credit Mgmt. Corp. v. Nicholas, 812 A.2d 51 (Conn. App. Ct. 2002). In FDIC v. Cashion, 720 F.3d 169 (4th Cir. 2013), the Fourth Circuit Court of Appeals explained the minority approach: These courts have generally noted that because filing a Form 1099-C has legal significance to the debtor’s income tax liability, and because the debtor faces penalties or fines for failing to comply with the obligations imposed, it would be inequitable to permit a creditor to collect the debt after having received the benefit of the “charge-off” of the debt from filing the Form 1099-C. Lastly, some–but not all–of the courts holding that a 5 filed Form 1099-C alone is prima facie evidence of discharge have also recognized that the form can satisfy the applicable UCC provisions for when a writing constitutes an “intentional voluntary act” of discharge, and thus itself effectuates the discharge of the relevant debt. Cashion, 720 F.3d at 178 (citing Franklin Credit Mgmt., 812 A.2d at 60-61)). ¶9 On the other hand, the majority view reflects the position of recent IRS Information Letters, which treats the form as a means of satisfying the agency’s reporting requirements and does not prohibit a creditor from collecting payment on a debt. Cashion, 720 F.3d at 178 (citing Capital One, N.A. v. Massey, No. 4:10-CV-01707, 2011 U.S. Dist. LEXIS 83817, at *10 (S.D. Tex. Aug. 1, 2011); In re Zilka, 407 B.R. 684, 689 (Bankr. W.D. Pa. 2009); Lifestyles of Jasper, Inc. v. Gremore, 299 S.W.3d 275, 277 (Ky. Ct. App. 2009)). ¶10 Federal regulations interpreting the IRC set forth a creditor’s reporting requirements to the agency: any applicable entity . . . that discharges an indebtedness of any person . . . must file an information return on Form 1099-C with the Internal Revenue Service. Solely for purposes of the reporting requirements of [the applicable statute] and this section, a discharge of indebtedness is deemed to have occurred . . . if and only if there has occurred an identifiable event described in paragraph (b)(2) of this section, whether or not an actual discharge of indebtedness has occurred on or before the date on which the identifiable event has occurred. 26 C.F.R. § 1.6050P-1(a) (2013) (emphasis added) (interpreting 25 U.S.C. § 6050P (2012)). There are eight identifiable events in the regulations that trigger the reporting obligation via a Form 1099-C; however, such an event may or may not involve an actual or intended discharge of indebtedness by a creditor. Cashion, 720 F.3d at 178-79 (citing 26 C.F.R. § 1.6050P-1(b)(2)). In other words, under the plain language of the regulation, 6 the IRS Form 1099-C reporting obligation can be triggered even where “an actual discharge of indebtedness had not yet occurred or is not contemplated.” Cashion, 720 F.3d at 178. ¶11 This interpretation of the IRC and its corresponding regulations is also reflected in the conclusions of two 2005 IRS Information Letters, aptly described in the Cashion Opinion: In the first, the IRS addressed a creditor’s concern that filing the Form 1099-C would constitute a written admission that it had discharged the debt and would therefore make debtors unwilling to pay on their obligations. Citing subsection (a) of [26 C.F.R. § 1.650P-1 (2013)], the IRS responded that it “does not view a Form 1099-C as an admission by the creditor that it has discharged the debt and can no longer pursue collection.” In the second letter, the IRS assured a concerned creditor that filing a Form 1099-C satisfies the reporting requirements of statute and implementing, neither of which “prohibit collection activity after a creditor reports by filing a Form 1099-C.” 720 F.3d at 179 (citations omitted) (citing I.R.S. Info. Ltr. 2005-0207 (Dec. 30, 2005); I.R.S. Info. Ltr. 2005-0208 (Dec. 30, 2005)). While not entitled to Chevron2 deference, the Cashion court found these letters nonetheless persuasive and entitled to respect “because it fully encompasses the purpose of a Form 1099-C as an IRS reporting document and follows the plain language of the relevant regulation.” Cashion, 720 F.3d at 179. 2 The deference given to agency regulations and rulings under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984), does not extend to information letters interpreting the IRC and its regulations. Christensen v. Harris Cnty., 529 U.S. 576, 587, 120 S. Ct. 1655, 1662 (2000) (explaining that “[i]nterpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law—do not warrant Chevron-style deference.”). 7 ¶12 Based on the foregoing, we adopt the majority position regarding the purpose of the Form 1099-C and hold that the issuance of an IRS Form 1099-C is not prima facie evidence of a creditor’s intent to discharge a debt; rather, it is a means of satisfying the agency’s reporting requirements and does not, in and of itself, prevent a creditor from seeking collection of a debt. ¶13 In this case, Muller claims that Flathead Bank cancelled his debt, basing his argument solely on the fact that the bank sent him an IRS Form 1099-C. He did not offer any additional evidence supporting his claim and did not deny that he failed to pay the installments due on the promissory notes. Thus, we cannot find that the District Court erred in granting summary judgment to Flathead Bank. ¶14 Issue two: Did the District Court err in finding that Muller could not personally appear on behalf of Masonry? ¶15 Muller also appeals the District Court’s finding that Masonry failed to appear in this action. We have previously held that “[a] corporation ‘cannot appear on its own behalf through an agent other than an attorney.’” H&H Dev., LLC v. Ramlow, 2012 MT 51, ¶ 18, 364 Mont. 283, 272 P.3d 657 (quoting Cont’l Realty, Inc. v. Gerry, 251 Mont. 150, 152, 822 P.2d 1083, 1084 (1991)). We have also held that a non-lawyer who attempts to represent a corporation in court is guilty of a contempt of court. H&H Dev., ¶ 18 (citing Zempel v. Liberty, 2006 MT 220, ¶ 18, 333 Mont. 417, 143 P.3d 123); See § 37-61-210, MCA. ¶16 Here, Muller purported to act on behalf of Masonry, a Montana Corporation, in the District Court proceedings. However, he does not have a license to practice law in 8 Montana, nor was Masonry separately represented by an attorney licensed to practice law in Montana. Accordingly, the District Court correctly found that Muller could only represent himself personally and could not appear on behalf of Masonry. Given that the decision to hold a person in contempt rests in the court’s discretion, we also cannot say that the District Court erred in failing to hold Muller in contempt of court for attempting to represent Masonry. See State ex rel. O’Connor v. Dist. Court, 245 Mont. 88, 97, 799 P.2d 1056, 1062 (1990). CONCLUSION ¶17 For the foregoing reasons, we affirm. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 25, 2016

ef6bc284-31e2-4529-a9fc-5a49e13d6ee7

Matter of S. L.

2016 MT 279N

DA 15-0465

Montana

Montana Supreme Court

DA 15-0465 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 279N IN THE MATTER OF: S. L., Respondent and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DI 09-42B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad M. Wright, Chief Appellate Defender, James Reavis, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Marty Lambert, Gallatin County Attorney, Eric N. Kitzmiller, Deputy County Attorney, Bozeman, Montana Submitted on Briefs: October 5, 2016 Decided: November 1, 2016 Filed: __________________________________________ Clerk 11/01/2016 Case Number: DA 15-0465 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court's quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 S.L. appeals from an Order of the Montana Eighteenth Judicial District Court, Gallatin County, committing her to the Montana State Hospital (MSH) for a period not to exceed three months. We affirm. ¶3 S.L. has a history of mental illness. She was previously involuntarily committed to MSH for treatment in 2009 and 2014 and was treated at Hope House in Bozeman, Montana, in 2011 and 2013. In June 2015, the State, relying on a mental health professional’s report, filed a petition to commit S.L. to MSH for further treatment. The District Court appointed counsel for S.L. and scheduled an initial hearing at which S.L. appeared with counsel. The court read the petition aloud and advised S.L. of her rights. The petition expressly stated, “[t]here is no person known or believed to be legally responsible for the care, support and maintenance of [S.L.].” Additionally, the petition noted that neither S.L.’s next of kin nor a person willing and able to be appointed as “friend of the respondent” was known at that time. While stating she wished to “contest the petition” (presumably objecting to a finding of probable cause), S.L. presented no evidence nor did she comment or suggest a person who could be appointed as a “friend.” At the close of the hearing, the District Court concluded that probable cause existed and 3 scheduled a commitment hearing. In its scheduling order, the court put “N/A” where it would have put the name of a friend of respondent. ¶4 After allowing S.L. time to obtain a second opinion, the court conducted the commitment hearing on July 6, 2015, at which three mental health professionals testified that S.L. suffered from schizoaffective disorder, possibly bipolar type. The District Court granted the State’s petition and committed S.L. to MSH for not more than 90 days. S.L. appeals. ¶5 In S.L.’s opening brief on appeal, she asserts that the District Court violated her due process rights by arbitrarily determining that “a friend for S.L. was ‘N/A’ or ‘not applicable.’” In her reply brief on appeal, S.L. shifts her argument, claiming that the District Court failed to give her notice of her statutory right to a friend. S.L. acknowledges that she did not raise these claims to the District Court, but urges us to review the issue under the plain error doctrine. ¶6 First, we decline to presume the meaning of the District Court’s reference to “N/A.” While this acronym could mean “not applicable,” it could also mean “not available” which, in this context, would be consistent with the State’s inability, and S.L.’s failure, to identify a person to act as “friend.” Other cases have used “N.A.” to mean “not available.” See, e.g. Smith v. Concannon, 938 F.2d 966, 969 n.3 (9th Cir. Or. 1991). However, while we acknowledge that the court’s reference to “N/A” is ambiguous and urge the use of more precise language, we conclude it does not change our analysis or ruling. 4 ¶7 The statutes governing the treatment of seriously mentally ill persons are set forth at Title 53, chapter 21, part 1, MCA. Section 53-21-114, MCA, provides that a person being involuntarily detained under part 1, must be informed of her constitutional and statutory rights. Sections 53-21-115 to -118, MCA, set forth the procedural and specific statutory rights to which a respondent is entitled. Section 53-21-121, MCA, identifies the required contents of a petition for commitment. Specifically, § 53-21-121(2)(d)-(f), MCA, requires the county attorney to include in a commitment petition the names and addresses of persons known or believed to be legally responsible for the respondent’s care, the name and address of respondent’s next of kin, and the names and addresses of “any person whom the county attorney believes might be willing and able to be appointed as friend of respondent.” Section 53-21-122, MCA, addresses the judge’s responsibility in reviewing the petition at the initial hearing and again mandates that the respondent be advised of her constitutional and statutory rights. As it pertains to the requirement for a “friend of respondent,” § 53-21-122(2)(b), MCA, provides, in relevant part: “If the court finds that an appropriate person is willing and able to perform the functions of a friend of respondent . . . and the respondent personally or through counsel consents, the court shall appoint the person as the friend of respondent.” ¶8 First, and as conceded by S.L. in her reply brief, the applicable statutes do not impose an obligation on the court or the State to investigate and/or locate an appropriate person willing and able to perform the duties of a friend of respondent. Second, § 53-21-122(2)(b), MCA, requires an appropriate and willing person to be identified and available before the district court is obligated to appoint a “friend.” Prior to 2009, 5 respondents had a statutory right to the appointment of a “friend.” Following the 2009 amendment, such an appointment became conditional and discretionary. ¶9 In the case before us, the court had been advised in the petition that no person was known or available to be a “friend” at the time the petition was prepared. Furthermore, as noted above, the court read the petition aloud during the initial hearing at which both S.L. and her counsel were present. Neither S.L. nor her attorney objected to the failure to appoint a friend nor did either suggest the need for, or the identity of, a friend. Moreover, and in accordance with §§ 53-21-114 and -122(2)(a), MCA, the court verbally advised, and provided to S.L. a written copy of the procedural and statutory rights expressly granted in Title 53, chapter 21, part 1, MCA. For these reasons, we conclude S.L. had adequate notice that the District Court could appoint a “friend” to assist during the proceeding. ¶10 We review a district court’s order of commitment to determine if the findings of fact are clearly erroneous and if the conclusions of law are correct. In re Mental Health of L.K.-S., 2011 MT 21, ¶ 14, 359 Mont. 191, 247 P.3d 1100. When a commitment case presents due process issues, our review is plenary. In re M.K.S., 2015 MT 146, ¶ 10, 379 Mont. 293, 350 P.3d 27. This Court will exercise plain error review in those limited situations where constitutional or substantial rights are at issue and where failure to review the error may “result in a manifest miscarriage of justice or may compromise the integrity of the judicial process.” In re C.R., 2012 MT 258, ¶ 26, 367 Mont. 1, 289 P.3d 125. 6 ¶11 We decline to exercise plain error review as S.L. has failed to establish that a miscarriage of justice or a compromise of the integrity of the judicial process occurred as a result of the court’s failure to appoint a “friend.” C.R., ¶ 26. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for noncitable memorandum opinions. In the opinion of the Court, the District Court’s interpretation and application of the law are correct, its findings of fact are not clearly erroneous, and it did not abuse its discretion. CONCLUSION ¶13 For the foregoing reasons, we affirm the District Court’s grant of the State’s petition. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ LAURIE McKINNON /S/ JIM RICE

November 1, 2016

c9e657dc-87ca-4f5f-8b2c-a03a91a83888

State v. Dobrowski

2016 MT 261

DA 15-0479

Montana

Montana Supreme Court

DA 15-0479 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 261 STATE OF MONTANA, Plaintiff and Appellee, v. ROBERT LAWRENCE DOBROWSKI, Defendant and Appellant. APPEAL FROM: District Court of the Sixteenth Judicial District, In and For the County of Custer, Cause No. DC-2013-62 Honorable Michael B. Hayworth, Presiding Judge COUNSEL OF RECORD: For Appellant: Penelope S. Strong, Attorney at Law, Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Wyatt A. Glade, Custer County Attorney, Miles City, Montana Submitted on Briefs: August 24, 2016 Decided: October 18, 2016 Filed: __________________________________________ Clerk 10/18/2016 Case Number: DA 15-0479 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Judge Michael Hayworth of the Sixteenth Judicial District Court, Custer County, presided over the trial of Robert Lawrence Dobrowski (Dobrowski) for criminal production or manufacture of dangerous drugs. The jury returned a verdict of guilty. Dobrowski appeals, alleging numerous errors at trial. ¶2 We address the following issues on appeal: Issue one: Did the District Court abuse its discretion in instructing the jury on the theory of accountability when the State did not charge Dobrowski with accountability in the Information? Issue two: Did the District Court abuse its discretion when it allowed the State to admit Dobrowski’s medical marijuana provider application? Issue three: Did the prosecutor’s statements during closing argument constitute prosecutorial misconduct? Issue four: Did the District Court err when it denied Dobrowski’s request for a surrebuttal closing argument? FACTUAL AND PROCEDURAL BACKGROUND ¶3 In the fall of 2012, Dobrowski and his wife Traci Dobrowski (Traci) lived on property located in Custer County, Montana, owned by Michael Burk (Burk) and Geraldine Burk (Geraldine). Dobrowski, Burk, Traci, and Geraldine each had medical marijuana patient cards issued to them by the Department of Public Health and Human Services (DPHHS), which allowed each individual to possess four mature plants, twelve submature plants, and one ounce of usable marijuana. Burk and Dobrowski began growing marijuana on the property. Dobrowski and Traci moved to Miles City, Montana, in December of 2012. In February 2013, Dobrowski applied for a medical marijuana 3 provider license, listing Burk’s property as the address where he would grow marijuana. His application was later denied. ¶4 On March 14, 2013, law enforcement officers executed a search warrant on Burk’s property after a criminal investigation discovered evidence consistent with a marijuana cultivation operation. Officers discovered 66 mature plants and 22 submature plants. Officers spoke to Dobrowski after the search. He acknowledged that he had been growing marijuana on the property and helped to set up the building where the marijuana was found. On December 5, 2013, the State filed an Information charging Dobrowski with criminal production or manufacture of dangerous drugs. A jury convicted Dobrowski on February 27, 2016. ¶5 Other facts will be noted as necessary to discuss the issues raised on appeal. STANDARDS OF REVIEW ¶6 We review a district court’s decision regarding jury instructions for an abuse of discretion. State v. Lacey, 2012 MT 52, ¶ 15, 364 Mont. 291, 272 P.3d 1288. “The standard of review of jury instructions in criminal cases is whether the instructions, as a whole, fully and fairly instruct the jury on the law applicable to the case.” State v. Dunfee, 2005 MT 147, ¶ 20, 327 Mont. 335, 114 P.3d 217. ¶7 “District courts are vested with broad discretion in controlling the admission of evidence at trial.” Seltzer v. Morton, 2007 MT 62, ¶ 65, 336 Mont. 225, 154 P.3d 561. We review a district court’s admission of rebuttal evidence for abuse of discretion. State v. Weitzel, 2000 MT 86, ¶¶ 23-24, 299 Mont. 192, 998 P.2d 1154. 4 ¶8 We review allegations of prosecutorial error de novo, considering the prosecutor’s conduct in the context of the entire proceeding. State v. Labbe, 2012 MT 76, ¶ 11, 364 Mont. 415, 276 P.3d 848 (closing argument). We consider closing argument statements in the context of the entire argument and review a district court’s rulings on objections to closing argument content for an abuse of discretion. State v. Chafee, 2014 MT 226, ¶ 12 376 Mont. 267, 332 P.3d 240. ¶9 We review a district court’s application of a statute for correctness. State v. Alden, 282 Mont. 45, 49, 934 P.2d 210, 213 (1997). DISCUSSION ¶10 Issue one: Did the District Court abuse its discretion in instructing the jury on the theory of accountability when the State did not charge Dobrowski with accountability in the Information? ¶11 The State’s information filed against Dobrowski did not include an accountability charge. Rather, the State sought jury instructions on the theory of accountability on the second day of trial. The District Court admitted two instructions on accountability over Dobrowski’s objection. Dobrowski now asks us to revisit our prior case law, namely State v. Tellegen, 2013 MT 337, 372 Mont. 454, 314 P.3d 902 and State v. Tower, 267 Mont. 63, 881 P.2d 1317 (1994), arguing that the allowance of the accountability instruction violated Dobrowski’s right to due process and his right to present a defense. ¶12 Under the Sixth Amendment, a criminal defendant has the right “to be informed of the nature and cause of the accusation” brought against him. U.S. Const. amend. VI. To this end, § 46-11-401(1), MCA, requires charging documents to state the name of the 5 offense and, for each count, to state “the official or customary citation of the statute, rule, regulation, or other provision of law that the defendant is alleged to have violated.” ¶13 Section 45-2-302, MCA, provides, in relevant part: A person is legally accountable for the conduct of another when: . . . (3) either before or during the commission of an offense with the purpose to promote or facilitate the commission, the person solicits, aids, abets, agrees, or attempts to aid the other person in the planning or commission of the offense. We have repeatedly held that “accountability is not a separate or different offense from the one charged, but rather, is ‘merely a conduit by which to find a person criminally liable for the acts of another.’” Tellegen, ¶ 9 (quoting State v. Maetche, 2008 MT 184, ¶ 16, 343 Mont. 464, 185 P.3d 980; State v. Abe, 1998 MT 206, ¶ 31, 290 Mont. 393, 965 P.2d 882; Tower, 267 Mont. at 67-68, 881 P.2d at 1320). Stare decisis “is of fundamental and central importance to the rule of law,” which “reflects our concerns for stability, predictability, and equal treatment.” State v. Gatts, 279 Mont. 42, 51, 928 P.2d 114, 119 (1996). As such, we decline to reconsider our prior holdings in Tower and Tellegen. Given our well-established principle of law regarding the theory of accountability, a defendant should be able to predict and plan for the possibility that the State may request an accountability instruction during trial. Tellegen, ¶ 9 (citing Tower, 267 Mont. at 68, 881 P.2d at 1320). ¶14 In Tower, we found unpersuasive a defendant’s claim that he was surprised by an accountability instruction given that he was provided all the evidence the State intended to present at trial. Tower, 267 Mont. at 68, 881 P.2d at 1320. We concluded that “[i]n 6 light of the defense’s knowledge of the State’s case, and the consistent history of the law of accountability in Montana, there was every reason to anticipate an accountability instruction.” Tower, 267 Mont. at 68, 881 P.2d at 1320. Likewise, in Tellegen, we held that a defendant had sufficient notice of a possible accountability instruction when the State presented evidence at trial that she assisted others in committing the crime for which she was charged. Tellegen, ¶¶ 9-10. ¶15 The facts in this case are similar to the facts in Tower and Tellegen. One week after the search of Burk’s property, Dobrowski admitted to officers that he was cooperatively growing marijuana on the property and helped to set up one of the buildings where the plants were found. The State then charged Dobrowski with criminal production or manufacture of dangerous drugs. During trial, the prosecution elicited testimony from Dobrowski that sought to establish his participation in the growing operation on Burk’s property. Dobrowski testified that he previously taught Burk to grow marijuana and told officers that he and Burk had a cooperative grow on the property. In short, Dobrowski was charged for his participation in the growing operation, and Dobrowski himself testified that he was involved in the operation. The facts underlying Dobrowski’s case and the State’s presentation of evidence at trial, which sought to establish that he did not act alone in growing marijuana on Burk’s property, put him on notice that the State could potentially request an accountability jury instruction. ¶16 Dobrowski attempts to rely on State v. Spotted Eagle, 2010 MT 222, 358 Mont. 22, 243 P.3d 402. In Spotted Eagle, the State initially charged the defendant under § 45-5-206(1)(a), MCA, then later sought to instruct the jury under § 45-5-206(1)(c), 7 MCA. Spotted Eagle, ¶ 11. Since this changed the essential elements of the charge against Spotted Eagle, the Court held that the district court abused its discretion in allowing an instruction on the separate and distinct offense not charged in the State’s information. Spotted Eagle, ¶¶ 11-12, 16. As in this case, the defendant in Tellegen also attempted to rely on Spotted Eagle to contend that, like the statutory subsections in that case, the statute on accountability is a separate and distinct offense requiring express notice from the prosecution. Tellegen, ¶¶ 13-14. However, we distinguished Spotted Eagle from Montana’s case law on accountability, holding that “[a]ccountability is not a separate or different offense from the one charged, it is merely a theory to establish criminal liability for the charged offense” and “does not constitute a substantive shift in the charge.” Tellegen, ¶ 14. Thus, as we previously held in Tellegen, Spotted Eagle does not apply to the case at bar. We conclude that the District Court did not abuse its discretion in instructing the jury on the theory of accountability. ¶17 Issue two: Did the District Court abuse its discretion when it allowed the State to admit Dobrowski’s medical marijuana provider application? ¶18 On the first day of trial, the State learned that Dobrowski intended to offer into evidence various letters between DPHHS and Dobrowski, Burk, Traci, and Geraldine. The District Court allowed Dobrowski to introduce this correspondence through the testimony of a DPHHS employee. The State then asked the court to issue an investigative subpoena for Dobrowski’s medical marijuana provider application. Dobrowski objected to the State’s motion, claiming that it was untimely. The court issued the investigative subpoena, concluding that the State had a compelling state 8 interest in obtaining the application, but that it could only be used on rebuttal. During trial, both Dobrowski’s counsel and the State questioned the defendant about his application and it was subsequently admitted during the State’s rebuttal. ¶19 For the first time on appeal, Dobrowski argues that the court erred in approving the State’s motion for investigative subpoena without requiring a supporting affidavit by the prosecutor, as mandated by § 46-4-301, MCA. However, “[i]t is well established that this Court will not review an issue that was not raised in the district court.” Paulson v. Flathead Conservation Dist., 2004 MT 136, ¶ 37, 321 Mont. 364, 91 P.3d 569. Dobrowski did not ask for relief from the improper issuance of an investigative subpoena in the trial court. See § 46-4-303, MCA. Thus, we will not put the District Court in error for an issue it never had the opportunity to consider. Paulson, ¶ 37. ¶20 Dobrowski also argues that the District Court abused its discretion in allowing the State to admit Dobrowski’s medical marijuana provider application during rebuttal. He argues that because the State failed to disclose the document in a timely manner, the court’s subsequent admission of the application during rebuttal sanctioned the use of a prejudicial, dilatory tactic by the prosecution. ¶21 Section 46-15-322, MCA, provides, in relevant part: (1) Upon request, the prosecutor shall make available to the defendant for examination and reproduction the following material and information within the prosecutor’s possession or control: . . . (d) all papers, documents, photographs, or tangible objects that the prosecutor may use at trial or that were obtained from or purportedly belong to the defendant . . . . 9 “The policy behind § 46-15-322, MCA, is to provide notice and prevent surprise.” State v. Stewart, 2000 MT 379, ¶ 22, 303 Mont. 507, 16 P.3d 391. Prosecutors also have a continuing duty to disclose “additional information or material that would be subject to disclosure had it been known at the time of disclosure.” Section 46-15-327, MCA. ¶22 In this case, Dobrowski’s medical marijuana provider application was not in the State’s possession or control until the District Court approved the motion for investigative subpoena during trial. Furthermore, when DPHHS provided the State with Dobrowski’s application, the State immediately gave the document to the defense. From these facts, it is evident that the State provided the application to Dobrowski at the “earliest opportunity.” See Weitzel, ¶ 33. Thus, we cannot say that the State failed to meets its initial or continuing duty to disclose Dobrowski’s provider application when the prosecutor was not in possession or control of the document before the subpoena was issued, and when the State gave Dobrowski a copy of the application upon possession of the document. ¶23 While Dobrowski attempts to rely on Stewart to support his argument that the District Court abused its discretion when it permitted the State to introduce the provider application in rebuttal, we instead find our holding in Weitzel more on point and dispositive. In Weitzel, we held that the district court did not abuse its discretion in allowing rebuttal evidence showing the defendant had pawned a handgun where the defendant’s trial testimony included statements denying gun ownership. Weitzel, ¶¶ 35, 38. This Court concluded that because Weitzel did not provide the State with pre-trial notice of his plan to suggest to the jury that he did own or possess an handgun, it was 10 “illogical” to hold that the prosecution had a pre-trial duty to disclose the pawn shop record rebuttal evidence, even where the State had discovered the pawn shop transaction before trial. Weitzel, ¶¶ 31, 33. ¶24 In this case, we agree with the State that it was entitled to question Dobrowski about the provider application and admit the document in the State’s rebuttal case. Like the facts in Weitzel, the record here shows that Dobrowski belatedly disclosed evidence, in the form of various letters between the DPHHS and Dobrowski, Burke, Traci, and Geraldine, which he admitted through the testimony of a DPHHS employee. Although it is unclear what tactical reason Dobrowski had in introducing these documents, he made a decision to open the door on the issue of his provider application without disclosing the application itself. See Weitzel, ¶ 35. As such, the State was entitled to present what became, through Dobrowski’s own making, relevant evidence of Dobrowski’s complete correspondence with DPHHS. Given Dobrowski’s testimony and the admission of the DPHHS letters by him, we conclude that the District Court did not abuse its discretion in allowing the State to admit Dobrowski’s medical marijuana provider application during rebuttal. ¶25 Issue three: Did the prosecutor’s statements during closing argument constitute prosecutorial misconduct? ¶26 Dobrowski claims that two statements made during the prosecution’s closing argument were improper. In the first statement, the prosecutor attempted to draw an analogy between a recent accident of his and the case at bar. He stated: Well, I got rid of my crutches. I like to think that my case is like my foot, just keeps getting better. . . . 11 . . . [I] was trying to figure out a way to present to you my theory on this case, and I had several thoughts go through my mind. I mentioned in opening, I think these two gentlemen got the cart before the horse. I got to thinking what happened here is a lot like what happened to me when I hurt my foot. What happened to me… Dobrowski’s counsel objected to the prosecutor’s statement, arguing that the prosecutor was vouching for the credibility of a witness. The District Court sustained the objection. ¶27 The prosecutor then began to address a juror’s concern, expressed in voir dire, that Dobrowski might serve a long sentence if convicted. He stated: I want to tell you that sentencing is a matter of law for the [j]udge. Finding guilt or innocence is a matter of fact for the jury. Sentencing, consequences, they may be very substantial. They may be minimal. Depends on who you ask. It’s not an issue that the jury should consider or can consider. That’s a legal issue. The only issue the jury should consider is whether the [d]efendant is guilty of the crime charged. He’s entitled to a fair hearing, if we do go to sentencing. He’s got some due process rights that apply if he feels he wasn’t treated fairly. Dobrowski’s counsel objected to this statement and the court directed the prosecution to “move on.” The defense moved for a mistrial after the State concluded its closing statement, citing the prosecution’s alleged vouching statement, referral to evidence outside the record, and reference to sentencing procedure. The court denied the motion. ¶28 Prosecutorial misconduct is determined by reference to established norms of professional conduct. State v. Martin, 2001 MT 83, ¶ 63, 305 Mont. 123, 23 P.3d 216. To determine whether a prosecutor’s statement constitutes reversible error, we must first examine whether the comments were improper. Labbe, ¶ 23 (citing State v. Kolb, 2009 MT 9, ¶ 10, 349 Mont. 10, 200 P.3d 504; State v. Sanchez, 2008 MT 27, ¶ 51, 341 Mont. 12 240, 177 P.3d 444). “If so, we then determine whether the comments prejudiced the defendant’s right to a fair and impartial trial.” Labbe, ¶ 23 (citing Kolb, ¶ 10). Prejudice is not inferred; rather, the defendant “must demonstrate, from the record, that the prosecutor’s misstatements prejudiced him.” Sanchez, ¶ 55. This Court will consider an alleged improper statement by the prosecutor during closing argument in the context of the entire argument. Labbe, ¶ 23 (citing State v. Roubideaux, 2005 MT 324, ¶ 15, 329 Mont. 521, 124 P.3d 1114). ¶29 As to the first statement concerning the prosecutor’s purported attempt to analogize his accident with this case, Dobrowski does not argue on appeal, as he did at trial, that the comments improperly vouched for the credibility of a witness. Rather, he only argues that the prosecutor’s statement “was a very clearly prohibited reference to facts outside the trial record,” in contravention of the Montana Rules of Professional Conduct 3.4(e). We cannot say that the prosecutor’s first statement was improper on this basis. The Montana Rules of Professional Conduct prohibit an attorney from alluding to irrelevant matters or “assert[ing] personal knowledge of facts in issue except when testifying as a witness.” Mont. R. Prof. Cond. 3.4(e). Here, when the prosecutor stated “my case is like my foot, just keeps getting better,” he was simply commenting on the strength of his case by attempting to draw an analogy to his injury. It is not improper for a prosecutor to comment upon the strength of his case based upon the evidence. See State v. Glaudue, 1999 MT 1, ¶ 21, 293 Mont. 1, 972 P.2d 827. ¶30 On the other hand, it is well-settled law in Montana that “closing arguments which reflect a prosecutor’s personal opinion as to the guilt of the defendant are improper.” 13 Glaudue, ¶ 22 (citing State v. Statczar, 228 Mont. 446, 457, 743 P.2d 606, 613 (1987)). However, the prosecutor’s statement that Dobrowski and Burk “got the cart before the horse” was simply a way for the prosecution to explain its theory of the case; namely, that Dobrowski helped Burk grow marijuana in excess of the amount allowed by law without getting a provider license which would have allowed him to do so legally. Thus, we cannot conclude that the prosecutor made an improper statement of his personal opinion regarding Dobrowski’s guilt. ¶31 Dobrowski also contends that the prosecutor’s second statement concerning sentencing was improper and prejudicial. The State argues that the prosecutor correctly informed the jury that sentencing matters are decided by the court and, unlike the case law relied upon by Dobrowski, did not specifically discuss the type of sentence the defendant might receive if convicted. We have held that it is improper for the prosecutor to inform the jury about possible sentences in closing argument. Martin, ¶ 65. In this case, the prosecutor was responding to a juror’s previously stated concern over the possible sentencing consequences for Dobrowski. The prosecutor replied by accurately stating that sentencing decisions are solely the duty of the trial court and outside the province of the jury. The prosecutor also referred to the fact that sentences vary widely and the defendant would have rights “if we do go to sentencing.” Such general statements are unlike those in Stewart, where the prosecutor attempted to assure the jury by stating that the judge had the authority to get the defendant into treatment and not sentence him to jail time. Stewart, ¶ 43. Unlike Stewart, the prosecution in this case was not attempting to give assurance to the jury that Dobrowski’s sentence would be light; 14 rather, the prosecutor was informing the jurors that it was impermissible for them to weigh potential punishment because such matters are left to judge and subject to the defendant’s constitutional rights. Thus, we cannot say that this statement was improper or that the District Court erred in denying Dobrowski’s motion for a mistrial. ¶32 Since we have determined that the prosecutor’s statements were not improper, there is no need to discuss whether Dobrowski was prejudiced by the statement. ¶33 Issue four: Did the District Court err when it denied Dobrowski’s request for a surrebuttal closing argument? ¶34 Prior to trial, Dobrowski filed a motion in limine requesting a departure from the customary order of trial; specifically, he asked to be allowed to present a surrebuttal closing argument. The District Court denied Dobrowski’s motion, characterizing it instead as a motion to deviate from the statutory order of trial and finding it untimely. Dobrowski argues that the District Court erred in denying his motion because he demonstrated good cause to depart from the order of trial and was thus entitled to present a surrebuttal argument at closing. The State contends that no rule or statute requires a district court to grant a defendant’s request for a surrebuttal argument. ¶35 Section 46-16-402, MCA, allows a court to deviate from the order of trial “[f]or good cause shown and in the discretion of the court.” See State v. Otto, 2014 MT 20, ¶ 11, 373 Mont. 385, 317 P.3d 810. While § 46-14-401(3), MCA, allows the prosecution and defense to offer rebutting testimonial evidence “at any time before the close of evidence,” the decision to allow a surrebuttal closing argument is within the discretion of the trial court. The cases Dobrowski cites in support of his argument to the contrary are 15 either irrelevant or inapplicable to the case at bar and we decline to address them. Because the District Court found Dobrowski’s motion to deviate from the statutory order of trial untimely under its pre-trial omnibus order, and because the court found that Dobrowski presented no basis under Montana law to deviate from the trial order, we conclude that the District Court acted within the proper bounds of its discretion when it denied Dobrowski’s request to present a surrebuttal argument at closing. CONCLUSION ¶36 For the foregoing reasons, we affirm. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ JIM RICE

October 18, 2016

88d36d4c-1428-4559-a8d2-f448b522b0d4

State v. A. McDanal

2016 MT 250N

DA 15-0050

Montana

Montana Supreme Court

DA 15-0050 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 250N STATE OF MONTANA, Plaintiff and Appellee, v. ALISHA YVONNE MCDANAL, Defendant and Appellant. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DC-13-175 Honorable James A. Manley, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Haley Connell Jackson, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Steven N. Eschenbacher, Lake County Attorney, Polson, Montana Submitted on Briefs: August 24, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0050 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Alisha Yvonne McDanal (McDanal) appeals from a September 24, 2014 conviction pursuant to a plea agreement in which she reserved the right to appeal the District Court’s denial of her motions to suppress. McDanal pled guilty to the offense of felony criminal possession of dangerous drugs in exchange for a three-year deferred sentence. The Court stayed McDanal’s sentence until the conclusion of her appeal. McDanal timely appealed. We affirm. ¶3 On November 14, 2013, the State charged McDanal with felony intimidation. The State later amended the Information to felony criminal possession of dangerous drugs, in violation of § 45-9-102, MCA. The charges arise from a November 3, 2013 arrest. Polson police received a report that a possible domestic assault was in progress in the apartment McDanal and her boyfriend shared. McDanal was present during the assault but was not the victim. Police found the victim outside the apartment with a broken leg, later determined to be a bullet wound. ¶4 To search for evidence of the assault Polson police obtained a search warrant for McDanal’s apartment, and searched it that evening. In the apartment, Officers 3 discovered drug paraphernalia commonly associated with methamphetamine use and several small bags containing white powder that tested positive for methamphetamine. Detective Michelle Scott (Det. Scott) interviewed McDanal that evening at the Lake County Detention Facility. Det. Scott reported McDanal “had unnatural body movements, unnatural movement of her mouth and facial expressions which are similar to those under the influence of methamphetamine.” Based on her training and experience Det. Scott believed McDanal was under the influence of drugs, specifically methamphetamine. ¶5 On November 5, 2013, two days after the arrest, Det. Scott applied for a search warrant to test McDanal’s urine for methamphetamine. In the application Det. Scott included the following facts: Det. Scott is a credible witness as she is trained and experienced in detection of drug use, including methamphetamine; police responded to a possible domestic dispute at McDanal’s apartment, where police found a victim with a gunshot wound to the leg; police obtained a search warrant for McDanal’s apartment, which when executed resulted in the discovery of drugs and paraphernalia associated with methamphetamine use in various places throughout the apartment; and Det. Scott personally interviewed McDanal, observing McDanal was impaired, had unnatural body movements, and unnatural movements of the face and mouth similar to people under the influence of methamphetamine. McDanal’s urine was seized pursuant to the search warrant and tested positive for methamphetamines. ¶6 On November 14, 2013, the State charged McDanal with felony intimidation. Upon McDanal’s request, the trial was continued multiple times. On July 3, 2014, the 4 District Court granted the State’s motion to amend its Information to charge McDanal with felony criminal possession of dangerous drugs. On August 1, 2014, McDanal filed two motions to suppress, one to suppress the drugs and paraphernalia found in the apartment, and one to suppress the positive drug results from the urine analysis test. ¶7 The District Court initially granted the motion to suppress .08 grams of alleged drug evidence, but denied the motion to suppress the urine analysis test. The District Court, in its order denying McDanal’s motion to suppress the urine analysis test, excised the evidence of the .08 grams of alleged drug evidence when it reviewed the application for the search warrant. The District Court determined the facts stated in the application were sufficient to show probable cause that criminal possession of dangerous drugs had occurred, and the urine test was reasonably calculated to find evidence of that crime, satisfying the requirements of § 46-5-221, MCA. McDanal appeals the order denying her motion to suppress the urine analysis results. ¶8 We review 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 is correct. State v. Minett, 2014 MT 225, ¶ 7, 376 Mont. 260, 332 P.3d 235. ¶9 McDanal argues the District Court erred when it denied her motion to suppress evidence of the urine analysis results. She argues that at the time the search warrant was issued, the facts asserted in the application were stale, and therefore were not sufficient to show probable cause that methamphetamine would be found in her urine. 5 ¶10 The Montana Constitution states, “[n]o warrant to search any place, or seize any person or thing shall issue without describing the place to be searched or the person or thing to be seized, or without probable cause, supported by oath or affirmation reduced to writing.” Mont. Const. art. II, § 11. In Montana, judges shall issue search warrants when a law enforcement officer, under oath or affirmation, in writing, electronically, or by telephone: (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. The sufficiency of a warrant is assessed on a case-by-case basis to determine whether any alleged defect in the warrant application is sufficient to affect the substantial rights of the accused. Muir v. Bilderback, 2015 MT 180, ¶ 11, 379 Mont. 459, 353 P.3d 473 (citing State v. West, 1998 MT 282, ¶ 8, 291 Mont. 435, 968 P.2d 289). An application for a search warrant must state facts sufficient to show probable cause for its issuance. Section 46-5-221, MCA; State v. Reesman, 2000 MT 243, ¶ 24, 301 Mont. 408, 10 P.3d 83. This Court has adopted the “totality of the circumstances test” to evaluate the existence of probable cause in a search warrant application. Reesman, ¶ 24 (citing Illinois v. Gates, 462 U.S. 213, 238, 103 S. Ct. 2317, 2332 (1983)). Under the totality of circumstances test, a judicial officer 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 6 will be found in a particular place.” State v. Kasparek, 2016 MT 163, ¶ 8, 384 Mont. 56, 375 P.3d 372. 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.” Kasparek, ¶ 8. ¶11 McDanal concedes the facts in the warrant application may have indicated evidence of drugs in her urine on November 3, but argues that when the warrant was issued those same facts were too stale to show probable cause. Simply, McDanal argues the evanescent character of methamphetamine in urine required the search warrant application to include specifically why the drug would be in McDanal’s urine at the time the warrant was issued. ¶12 Whether an application for a search warrant contains stale information depends on the nature of the property sought and activity in issue. State v. Tackitt, 2003 MT 81, ¶ 39, 315 Mont. 59, 67 P.3d 295. The determination of staleness “cannot be resolved by a mechanical reference to the number of days between the facts relied upon in the affidavit and the time the warrant is issued.” State v. Rinehart, 262 Mont. 204, 213, 864 P.2d 1219, 1224 (1993). Because the staleness of facts in a search warrant application “cannot be resolved by a mechanical reference,” a judicial officer must make a “practical, common sense determination” of whether a fair probability exists that evidence of a crime will be found in a specific place. Rinehart, 262 Mont. at 213, 864 P.2d at 1224; Kasparek, ¶ 8. It is true the presence of drugs in a person’s body is evanescent and will eventually dissipate. However, common sense is not so evanescent. 7 ¶13 In this case, the District Court made a practical, common sense determination when it issued the search warrant. Based on the totality of the circumstances the District Court properly concluded the warrant application stated facts sufficient to support probable cause and those facts were not stale. This determination is entitled to great deference. Muir, ¶ 12. We conclude the District Court did not err in denying McDanal’s motion to suppress the evidence of methamphetamine in her urine pursuant to the search warrant. ¶14 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶15 Affirmed. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

October 4, 2016

a7344ba2-3f16-4ee9-8bf5-49f29c0dad5b

Duffy v. Park County JP

2016 MT 252N

DA 13-0840, DA 15-0667

Montana

Montana Supreme Court

DA 15-0667 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 252N IN THE MATTER OF: CHRISTOPHER DUFFY, Petitioner and Appellant, v. JUSTICE COURT OF PARK COUNTY, Respondent and Appellee. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DV-2015-83 Honorable Brenda Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellant: Scott A. Albers, Attorney at Law, Great Falls, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana Bruce E. Becker, Park County Attorney, Livingston, Montana Submitted on Briefs: September 14, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0667 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 In March 2004, Christopher Duffy entered a guilty plea to partner or family member assault in the Justice Court of Park County. A short time later he filed a motion to withdraw the plea on the ground that it was involuntary. The Justice Court denied his motion. Duffy then filed a petition for postconviction relief, which the District Court denied. In Duffy v. State, 2005 MT 228, 328 Mont. 369, 120 P.3d 398, we affirmed the District Court’s conclusion that Duffy voluntarily entered his guilty plea. ¶3 In July 2015, Duffy filed a petition under M. R. Civ. P. 60(b)(4) to set aside his judgment of conviction as void. He asserted that, at the time he entered his plea, the Justice Court had not advised him that he had the right to a jury trial in district court. The District Court denied Duffy’s petition. The court reasoned first that the Montana Rules of Civil Procedure do not apply in criminal cases. The court also observed that Duffy could challenge only the voluntary nature of his guilty plea—an issue that this Court settled in Duffy. See Hardin v. State, 2006 MT 272, ¶ 23, 334 Mont. 204, 146 P.3d 746 (“Generally, when a criminal defendant voluntarily and knowingly enters a guilty plea, he waives the right to appeal all nonjurisdictional defects which occurred prior to entry of 3 the plea, including claims of constitutional violations.”). The District Court therefore concluded that Duffy could not raise the jury trial issue in a petition to void his criminal judgment. Duffy appeals. ¶4 We review a district court’s interpretation or construction of a statute or procedural rule for correctness. State v. Osborn, 2015 MT 48, ¶ 9, 378 Mont. 244, 343 P.3d 1188. Here, the District Court concluded correctly that Duffy could not rely on M. R. Civ. P. 60(b)(4) to challenge his criminal conviction because “[c]riminal defendants seeking to challenge their sentences must follow the procedures established by the Montana Rules of Criminal Procedure in Title 46, MCA.” Osborn, ¶ 14 (emphasis added); see M. R. Civ. P. 1 (“These rules govern the procedure in all civil actions and proceedings.”). Duffy sought available postconviction remedies more than a decade ago, and he cannot avoid their concomitant procedural bar by invoking rules of civil procedure under the guise of an allegedly “void judgment.” Because the District Court correctly dismissed Duffy’s petition, we decline to address Duffy’s other arguments on appeal. ¶5 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of this Court, the case presents a question controlled by settled law. The District Court’s order denying Duffy’s petition to set aside the 2004 judgment is affirmed. /S/ BETH BAKER 4 We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JIM RICE

October 4, 2016

27de4dc9-4ece-4349-b0d6-b66567e75df1

Terry-Lee v. DOJ

2016 MT 249N

DA 15-0439

Montana

Montana Supreme Court

DA 15-0439 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 249N Terry-Lee, Sovereign Being, State Citizen, Plaintiff and Appellant, v. MONTANA DEPARTMENT OF JUSTICE and GREGORY NOOSE, CHIEF, Defendant and Appellee. APPEAL FROM: District Court of the Seventeenth Judicial District, In and For the County of Valley, Cause No. DV-2014-34 Honorable John C. McKeon, Presiding Judge COUNSEL OF RECORD: For Appellant: Terry-Lee (Self-Represented), Glasgow, Montana For Appellee: Timothy C. Fox, Montana Attorney General, A. Peter Funk, Assistant Attorney General, Helena, Montana Submitted on Briefs: July 27, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0439 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 In 2013 and 2014, Terry-Lee filed three applications with the Montana Department of Justice Motor Vehicle Division (DOJ/MVD) seeking a non-commercial Montana driver’s license. In each application, he professed that he was a “non-resident” inhabitant/citizen of the “Republic of Montana.” He declined to complete the section of the applications regarding United States citizenship but indicated that he was “not a U.S. person.” He claimed a date of “creation” rather than a date of birth and asserted that he was created in the “Washington Republic.” He further asserted that he has no Social Security number and that he is “exempt” from using postal zip codes. The DOJ/MVD rejected each of his applications, explaining that Lee did not complete the form as required and submitted insufficient or non-conforming information. Lee filed a timely appeal of his last denial to the Seventeenth Judicial District Court, Valley County. ¶3 Lee claimed that Gregory Noose, the former Bureau Chief at DOJ/MVD, erroneously denied, or instructed his staff to deny, each of Lee’s applications. The District Court conducted a hearing on May 8, 2015, and subsequently affirmed the DOJ’s denials of Lee’s applications on the grounds that the “confusing and contradictory 3 information” provided by Lee precluded the DOJ/MVD from completing the verification required by § 61-5-105(10), MCA. ¶4 On appeal to this Court, Lee urges us to instruct the DOJ/MVD to issue him a driver’s license with his “true & correct Christian name” spelled “Terry-Lee” in upper and lower case letters (as opposed to all upper case letters) and to include his last known address with “‘no’ MT-zip code on the face of said license.” ¶5 The licensing provisions for Montana’s drivers are set forth at Title 61, chapter 5, part 1, MCA. In order to obtain a Montana driver’s license, an individual must be a Montana resident. Section 61-5-103, MCA, requires that a person who has resided in Montana for more than 60 consecutive days is considered to be a resident and must be licensed by the State before operating a motor vehicle. Exceptions to the residency requirement are listed in § 61-5-104, MCA. Despite Lee’s consistent declaration that he was a “non-resident” inhabitant of Montana, the District Court determined that, under the applicable statutes, he was a Montana resident for purposes of licensing. ¶6 In addition to being a Montana resident, an applicant for a Montana license must be a United States citizen or a lawfully present non-United States citizen. Section 61-5-105, MCA, instructs the DOJ/MVD to verify that a non-United States citizen applicant is lawfully present in the United States before issuing a Montana driver’s license. The statute provides, in relevant part: The department may not issue a license under this chapter to a person: . . . 4 (10) whose presence in the United States is not authorized under federal law. When an applicant who is not a citizen of the United States applies for a driver’s license, the department shall verify that the applicant is lawfully present in the United States by using the federal systematic alien verification for entitlements program. The department may not accept a driver’s license issued by another state as proof that an applicant is lawfully present in the United States under federal law. Section 61-5-105(10), MCA. ¶7 Additionally, Admin. R. M. 23.3.131 sets forth the documents accepted by DOJ/MVD by applicants for driver’s licenses. The 36 identifying documents listed were selected to prove the true identity of applicants and to establish their lawful presence in the United States if they are non-citizens. Lee failed to submit any documents that complied with Admin. R. M. 23.3.131. ¶8 Because Lee consistently denied being a United States citizen, DOJ/MVD attempted to verify Lee’s legal status in the country by utilizing the federal SAVE1 system. However, without a Social Security number and other necessary identifying information, DOJ/MVD was unable to verify Lee’s status. Without such verification, the agency was required to deny Lee’s application for a license. ¶9 The record in this case indicates that for decades Terry-Lee has repeatedly declared that he is not a United States citizen; rather, he claims to be a “sovereign state 1 SAVE is the Systematic Alien Verification for Entitlements Program that assists federal, state and local benefit granting agencies to verify a benefit applicant’s immigration status or naturalized/derived citizenship. https://www.uscis.gov/save (https://perma.cc/V8UH- D6QY). 5 citizen of the Republic of Montana.” In an affidavit that he claims to “annex” to any document on which he “places [his] autograph,” he states: That I have no memory of accepting the dubious status of or acting in the capacity of a “U.S. citizen” or “person” within the meaning of the so-called “14th Amendment” and any purported “evidence” to the contrary is hereby Declared [sic] a deceitful falsehood. ¶10 Montana’s licensing statutes and regulations apply to all Montana residents seeking a driver’s license. The law simply does not provide for alternative or special legal status. ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the District Court’s findings of fact were not clearly erroneous nor were its conclusions of law incorrect. Moreover, this case presents questions clearly controlled by settled law. ¶12 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ LAURIE McKINNON

October 4, 2016

b32091cd-b9b5-4673-95aa-e4afa643d471

In re Estate of McClure

2016 Mt 253

DA 16-0143

Montana

Montana Supreme Court

DA 16-0143 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 253 IN THE MATTER OF THE ESTATE OF JOHN S. McCLURE and the McCLURE TRUST dated July, 19, 1993 __________________________________________ GEORGE E. McCLURE, JOHN W. McCLURE and VERLAYN G. McMANUS, Plaintiffs, Cross-Defendants, and Appellees, v. RUTH ELSIE STILLER MILLER McCLURE, individually and as Trustee of the JOHN S. McCLURE and RUTH ELSIE STILLER MILLER McCLURE TRUST, Defendant, Cross-Complainant, and Appellant. APPEAL FROM: District Court of the Fifth Judicial District, In and For the County of Beaverhead, Cause No. DP 14-5323 Honorable Loren Tucker, Presiding Judge COUNSEL OF RECORD: For Appellant: William E. McCarthy, Jesse C. Kodadek, Worden Thane P.C., Missoula, Montana For Appellees: Mark A. Bryan, Bryan Law Offices, P.C., Bozeman, Montana Bruce M. Jacobs, Law Offices of Bruce M. Jacobs, Bozeman, Montana Submitted on Briefs: August 24, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 16-0143 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Since John S. McClure’s (Jack) death in January 2013, his widow, Ruth Elsie Stiller Miller McClure (Ellie), and his children, George E. McClure, John W. McClure, and Verlayn G. McManus (collectively Siblings), have been involved in contentious litigation regarding the McClure Family Trust (the Trust). Ellie sought to enforce an amendment to the Trust, but the Fifth Judicial District Court concluded that under the Trust’s plain language Ellie has no interest in any Trust assets. The court also rejected Ellie’s attempt to disinherit Siblings for purportedly contesting the Trust’s validity. ¶2 We conclude that Ellie has an interest in Trust assets and that Siblings did not forfeit their interest in the Trust. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In 1993, Jack and his wife Dixie—Siblings’ mother—established the Trust by executing a standard form Revocable Living Trust Agreement (the Trust Agreement) that they obtained from an out-of-state company. Along with the Trust Agreement, the company provided Jack and Dixie with a binder that included various other documents relating to the Trust (Trust Binder). The Trust Agreement states that the Trust’s primary purpose was to “provide for the health, support and maintenance of [Jack and Dixie] during their lifetimes.” The Trust assets initially included real property in Montana and in Oregon, vehicles, and bank and investment accounts. ¶4 The Trust Agreement created a revocable trust that Jack and Dixie could modify or amend while both were living. The Trust Agreement provides that, upon the death of either Jack or Dixie, the living spouse “shall divide the entire Trust Estate into two or 3 more separate trusts to be known . . . as the ‘Survivor’s Trust’ and the ‘Decedent’s Trust.’” The Trust Agreement makes clear that the Decedent’s Trust is irrevocable, “but the Survivor’s trust shall continue to be revocable and subject to amendment and modification by the surviving Trustor.” ¶5 The Trust Agreement specifies that the principal of the Survivor’s Trust “shall consist of all the interest in each and every asset held by the Trustee pursuant to this declaration on or by reason of the death of the deceased Trustor, not allocated to the principal or Trust Estate of the Decedent’s Trust pursuant to Section 3.3.” Section 3.3, in turn, stipulates that the principal of the Decedent’s Trust “shall consist of assets equal in value to the maximum amount, if any, that can pass free of federal estate tax by reason of the unified credit available to the estate of the Trustor.” The surviving spouse has an unlimited right to withdraw “as much of the principal of the Survivor’s Trust as he or she shall request in writing.” Conversely, the surviving spouse’s right to withdraw funds from the principal of the Decedent’s Trust is limited to the greater of $5,000 or five percent of the principal per year. ¶6 The Trust Agreement names Siblings as beneficiaries, with each receiving one-third of the Trust principal upon the surviving spouse’s death. The Trust Agreement appoints John W. McClure or George McClure to serve as successor trustee upon the surviving spouse’s death. The Trust Agreement contains a no contest provision that provides that any beneficiary who contests the Trust’s validity shall forfeit any interest the beneficiary may have under the Trust. 4 ¶7 Dixie died in 2004. The Trust assets at that time were valued low enough to pass free of the federal estate tax by reason of the unified tax credit. Following Dixie’s death, Jack continued to accumulate assets, which became part of the Trust principal. Jack also continued to treat the entire Trust as revocable and he did not divide the Trust assets between a Survivor’s Trust and a Decedent’s Trust. ¶8 Jack married Ellie in 2006. Prior to marrying, Jack granted Ellie a life estate in their marital home in Dillon, Montana. The home is a Trust asset. In September 2012, Jack executed the First Amendment to the Trust (Amendment), which purported to make Ellie his successor trustee. The Amendment specified that upon Jack’s death, Ellie would “become the sole beneficiary for her lifetime of all income and principal of the [Trust]. Such income and principal shall be available to her at her discretion to maintain her comfort, care and general welfare and living expenses, including medical expenses.” (Emphasis in original.) The Amendment specified further that upon Ellie’s death, “all remaining assets of the [Trust] shall be distributed according to the terms of said trust” to Siblings. Finally, the Amendment named George McClure trustee upon Ellie’s “resignation, death or incapacity.” ¶9 Jack died four months after executing the Amendment. Jack’s will, which was included in the Trust Binder, contained a pour-over clause that conveyed all of his property to the Trust to be “held, administered, and distributed in accordance with its provisions, including any amendments made to it before [his] death.” Jack’s will also contained a no contest provision similar to that of the Trust Agreement. 5 ¶10 In June 2014, Siblings sued Ellie for conversion of Trust assets, unjust enrichment, and breach of fiduciary duty. Siblings sought compensatory and punitive damages. Siblings requested also that the court set aside both the Amendment and the life estate Jack conveyed to Ellie in their home. Ellie counterclaimed, seeking a declaratory judgment concerning the construction, validity, and application of the Trust Agreement, the Amendment, and the life estate. In September 2014, unbeknownst to Ellie, George opened a probate action and petitioned to become the personal representative of Jack’s estate, which the District Court granted. Upon learning of this development, Ellie petitioned to have George removed as personal representative of Jack’s estate. ¶11 The parties filed cross-motions for summary judgment in the civil case regarding the construction of the Trust Agreement, the manner in which the trusts should have been funded, and the Amendment’s validity. The District Court issued an order consolidating the civil and probate cases, denying Ellie’s summary judgment motion, and denying her petition to remove George as personal representative. The court concluded that under the Trust Agreement’s plain language, the Decedent’s Trust should have been funded up to the amount that could pass free of federal estate tax under the unified credit, which was $1.5 million at the time of Dixie’s death. Because the Trust’s assets were “substantially less than this amount,” the District Court concluded that “the Survivor’s Trust never came into existence.” Accordingly, the court determined that the Amendment was invalid. ¶12 Ellie appealed the District Court’s order. Before submitting an opening brief on appeal, Ellie filed a motion to stay the appeal and remand to the District Court so the 6 court could consider the “Trustee Instructions,” which were included in the Trust Binder. Ellie asserted that Siblings kept the Trustee Instructions from her. She alleged that the instructions showed that the District Court erroneously interpreted the Trust. Siblings opposed Ellie’s motion and filed a motion to dismiss her appeal. We dismissed the appeal without prejudice. George E. McClure v. Ruth Elsie Stiller Miller McClure, No. DA 15-0311, Or. (Mont., Sept. 08, 2015). ¶13 Upon remand, Ellie filed several motions. She sought to revise the court’s previous order to conclude that the Survivor’s Trust came into existence based on the Trustee Instructions; she moved for partial summary judgment declaring that the Decedent’s Trust became fixed in value upon Dixie’s death in 2004; and she asked the court to forfeit Siblings’ interests under the no contest provisions of the Trust and Jack’s will. The District Court denied the motions, reasoning that: the Trust Agreement was unambiguous and therefore the court did not need to consider the Trustee Instructions, which it concluded were extrinsic evidence; Jack did not create a separate trust with the assets he accumulated following Dixie’s death, and therefore those assets were part of the Decedent’s Trust; and, even if the no contest provisions applied, they would be unenforceable against Siblings. Ellie appeals both the District Court’s initial order interpreting the Trust Agreement and its order denying her motions upon remand. STANDARDS OF REVIEW ¶14 We review summary judgment rulings de novo. Garza v. Forquest Ventures, Inc., 2015 MT 284, ¶ 11, 381 Mont. 189, 358 P.3d 189. Summary judgment is appropriate when the moving party demonstrates the absence of a genuine issue of material fact and 7 entitlement to judgment as a matter of law. M. R. Civ. P. 56(c)(3); Garza, ¶ 11. A district court’s interpretation of a trust agreement presents a question of law, which we review for correctness. In re Charles M. Bair Family Trust, 2008 MT 144, ¶ 32, 343 Mont. 138, 183 P.3d 61 (hereafter Bair Family Trust). Similarly, whether a portion of a written agreement is ambiguous is a question of law, which we review for correctness. In re Marriage of Holloway, 2000 MT 104, ¶ 5, 299 Mont. 291, 999 P.2d 980. DISCUSSION ¶15 As an initial matter, we are unpersuaded by Siblings’ contention that Ellie’s appeal is improper. As Ellie correctly argues, the District Court’s orders are orders “refusing, allowing, or directing the distribution of any estate or part thereof” under M. R. App. P. 6(4)(e). The District Court’s rulings deny Ellie any interest in or claim to Jack’s estate. As such, the orders “are considered final,” M. R. App. P. 6(4), and we may review them on appeal, M. R. App. P. 6(1). ¶16 1. Whether the District Court erred in interpreting the Trust Agreement. ¶17 The District Court concluded that the Trust Agreement’s terms are unambiguous. The court noted that under Section 3.2 of the Trust Agreement, the principal of the Survivor’s Trust consists of only those assets not allocated to the principal of the Decedent’s Trust. The court relied on the directive in Section 3.3 that the principal of the Decedent’s Trust “shall consist of assets equal in value to the maximum amount, if any, that can pass free of federal estate tax by reason of the unified credit.” The court determined that, because the unified credit amount was $1.5 million when Dixie died, “the Decedent’s Trust should have been funded up to that amount.” Because the Trust 8 assets did not exceed $1.5 million when Dixie died, the court determined that “the Survivor’s Trust could not have been funded at all.” Accordingly, it concluded “that the Survivor’s Trust never came into existence.” ¶18 Addressing Section 3.1 of the Trust Agreement, which provides that the trustee “shall divide the entire Trust Estate into” a Survivor’s Trust and a Decedent’s Trust, the court stated: Section 3.1 simply requires the trustee to divide the trust according to the provisions set out in Sections 3.2 and 3.3. When these three provisions are read together, it becomes clear that the word “shall” [in Section 3.1] only clarifies that the trustee has no discretion to refuse to fund the Survivor’s Trust with all funds not allocated to the Decedent’s Trust. Under the plain language of Section 3.3, the Survivor’s Trust is not funded when assets do not exceed the value of the unified credit. The District Court concluded further that “Section 3.1 only generally provides for division of the estate into two trusts,” whereas “Sections 3.2 and 3.3 specifically provide how this division must occur.” ¶19 The court acknowledged that at the time Jack and Dixie created the Trust, “the unified credit was only $600,000.” The court also determined that Jack and Dixie may have anticipated that assets “would be left over to transfer into the Survivor’s Trust” after the Decedent’s Trust had been funded up to the maximum amount allowed by the unified credit. The court concluded, though, that the Trust Agreement “plainly demonstrates that [Jack and Dixie] intended the amount to vary with the unified credit.” So, the court decided, the plain language of Section 3.3 “demonstrates that the primary purpose was to avoid estate taxes, not to fund the Survivor’s Trust.” 9 ¶20 Because the court found no ambiguity in the Trust Agreement, it declined to consider documents from the Trust Binder because they were extrinsic evidence. Based on its determination that the irrevocable Decedent’s Trust came into existence, but that the revocable Survivor’s Trust did not, the court concluded that Jack had no power to amend the Trust Agreement. Consequently, the court determined that “the purported Amendment [was] invalid” and that Ellie had no right to Trust assets. While the court did not speak directly to the issue, its holding that the irrevocable Decedent’s Trust included all the Trust assets necessarily means that Jack did not have authority to convey the life estate to Ellie.1 ¶21 Unquestionably, “[t]he trustor’s intent controls our interpretation of a trust agreement.” Bair Family Trust, ¶ 32 (citing In re Estate of Snyder, 2000 MT 113, ¶ 10, 299 Mont. 421, 2 P.3d 238; Matter of Estate of Bolinger, 284 Mont. 114, 120, 943 P.2d 981, 985 (1997)). To discern intent, we look to “the language of the entire trust agreement, rather than [to] a particular word or phrase.” Bair Family Trust, ¶ 32 (citing Estate of Snyder, ¶ 10; Estate of Bolinger, 284 Mont. at 120, 943 P.2d at 985). Thus, we seek to “give some effect to every expression” in interpreting a trust agreement’s language; we avoid “an interpretation which will render any of the expressions inoperative.” Estate of Snyder, ¶ 10 (quoting Estate of Bolinger, 284 Mont. at 121, 943 P.2d at 985). Further, “we emphasize substance over form, and we construe the [trust 1 The District Court did address the life estate in its second order, concluding that Siblings should be allowed to engage in additional discovery regarding whether Ellie had actual knowledge that Jack did not have authority to grant a life estate in the property. 10 agreement’s] words in their ordinary and grammatical sense, absent a clear opposite intention.” Bair Family Trust, ¶ 32 (citation and internal quotations omitted). ¶22 By focusing on a particular section of the Trust Agreement—Section 3.3—the District Court failed to analyze “the language of the entire [T]rust [A]greement” to discern Jack’s and Dixie’s intent in creating the Trust. Bair Family Trust, ¶ 32. Section 1.1 of the Trust Agreement unequivocally manifests Jack’s and Dixie’s intention that the Trust’s primary purpose “shall be to provide for the health, support and maintenance of [Jack and Dixie] during their lifetimes, in their accustomed manner of living.” The Trust’s expressed secondary purpose, on the other hand, “shall be to permit [Jack and Dixie] to provide funds for the reasonable health, support, and education of” Siblings. By concluding—based on its narrow emphasis on Section 3.3—that Jack’s and Dixie’s “primary purpose was to avoid estate taxes, not to fund the Survivor’s Trust,” the court elevated the Trust Agreement’s stated secondary purpose—to provide for Siblings—over the express primary purpose—to provide for Jack upon Dixie’s death. And the court failed to give “some effect to every expression” in the Trust Agreement when it relied exclusively on Section 3.3. Estate of Snyder, ¶ 10. ¶23 Likewise, the District Court’s interpretation rendered additional sections of the Trust Agreement inoperative. Section 3.1 provides that the trustee “shall divide the entire Trust Estate into” a Survivor’s Trust and a Decedent’s Trust, and Section 1.7 states that upon the first spouse’s death, “the Decedent’s Trust . . . shall become irrevocable but the Survivor’s Trust shall continue to be revocable and subject to amendment and modification by the surviving trustor.” These sections, construed “in their ordinary and 11 grammatical sense,” Bair Family Trust, ¶ 32, required that the Trust be divided into a revocable Survivor’s Trust and an irrevocable Decedent’s Trust upon Dixie’s death so that Jack would have the ability to manage his survivor’s share for his support during the remainder of his lifetime. Contrary to the District Court’s determination, the Trust Agreement’s other provisions do not establish a “clear opposite intention.” Bair Family Trust, ¶ 32. ¶24 Nevertheless, as the District Court concluded, Section 3.3 could be interpreted reasonably to require that the Decedent’s Trust be funded up to the maximum amount of the unified tax credit. Such an interpretation would result in no assets being allocated to the Survivor’s Trust, because Section 3.2 limits the principal of the Survivor’s Trust to those assets “not allocated to the principal . . . of the Decedent’s Trust.” This interpretation, however, conflicts with both the plain language of Sections 1.7 and 3.1 and the stated intent of Jack and Dixie in creating the Trust. The Trust Agreement’s terms are thus susceptible to more than one reasonable interpretation. Consequently, the Trust Agreement is ambiguous. Because the Trust Agreement is ambiguous, “extrinsic evidence is admissible to aid in determining the . . . meaning of the terms and [Jack’s and Dixie’s] intent in distributing their property through the Trust.” In the Matter of the Estate of the Dern Family Trust, 279 Mont. 138, 145, 928 P.2d 123, 127-28 (1996) (hereafter Dern Family Trust). Extrinsic evidence includes documents associated with a trust agreement, such as trustee instructions. Dern Family Trust, 279 Mont. at 147-48, 928 P.2d at 129. 12 ¶25 The Trust Binder includes both the Trustee Instructions and a “Trust Summary.” The Trust Summary “identifies the documents [the company] prepared in accordance with the instructions and preferences [Jack and Dixie] stated in [their] application.” Summarizing “some of the key provisions” of the Trust Agreement, it specifies: Section 3.2 provides that the trust estate will split into two equal trusts, with the decedent’s (or “B”) trust becoming irrevocable. Section 3.3 provides that the surviving spouse will have full authority and control over the survivor’s (or “A”) trust and is entitled to: (1) all income from the assets of the “B” trust; (2) access to the principal of the “B” trust under certain conditions; (3) withdraw up to $5,000 or 5% from principal each year for any purpose.2 The Trust Summary identifies the other documents in the Trust Binder. It states that the Trustee Instructions “provide[ ] your surviving spouse, and/or another successor trustee with guidelines and forms for settling the trust affairs when either of you dies.” ¶26 The Trustee Instructions, in turn, provide, “If a couple have a complex (federal tax planning) A-B Trust, one-half of the Trust (the Decedent’s B Trust) may become irrevocable upon the death of a spouse.” The Trustee Instructions continue: The decedent’s share of community and separate property should be identified and placed in the Decedent’s B Trust, with any excess over $600,000 placed in the “C” Trust, if available. The decedent’s assets consist of the decedent’s separate property and the value of the decedent’s share of the community or common property. One- half of the asset value of the community or common property must flow into Trust B . . . . This does not mean that both the decedent’s and the survivor’s trust need to own half of all assets at death. You may place total 2 The Trust sections identified in the Summary are not entirely accurate or complete. 13 ownership of any asset in either trust as long as you put an equal value of assets into the “A” and the “B” (plus “C”) trusts.3 The Trustee Instructions make clear that “[a] person who has an ‘A-B’ Trust with federal tax planning features . . . must allocate assets among the applicable trusts.” ¶27 Reading the Trust Agreement together with the Trust Summary and the Trustee Instructions “so as to give effect to all,” the documents show that Jack and Dixie intended for the Survivor’s Trust to be funded. Dern Family Trust, 279 Mont. at 148, 928 P.2d at 129. Because Jack’s and Dixie’s “intent controls our interpretation of [the] [T]rust [A]greement,” we hold that the District Court incorrectly interpreted the Trust Agreement. Bair Family Trust, ¶ 32. ¶28 Under the Trust Agreement, the Survivor’s Trust—which is “subject to amendment and modification by” Jack—should have come into existence and been funded. Accordingly, we conclude that the District Court incorrectly determined that the Amendment is invalid. See § 72-38-602(1), MCA (“Unless the terms of a trust expressly provide that the trust is irrevocable, the settlor may . . . amend the trust.”); § 72-38-602(3), MCA (“The settlor may . . . amend a revocable trust: (a) by substantial compliance with a method provided in the terms of the trust; or (b) if the terms of the trust do not provide a method, by a writing delivered to the trustee manifesting clear and convincing evidence of the settlor’s intent.”). 3 There is no “C” trust under the Trust Agreement; just a Survivor’s Trust (“A” trust) and Decedent’s Trust (“B” trust). 14 ¶29 Finally, Section 1.5 of the Trust Agreement provides: All property now or hereafter conveyed or transferred to the Trustee(s) pursuant to this Declaration, which was . . . separate property at the time of such conveyance or transfer, shall retain its character [as] . . . the separate property of the Trustor transferring such property to the Trust, during Trustors’ lifetimes. Section 1.5 provides plainly that the assets Jack accumulated after Dixie’s death are considered Jack’s separate property. Pursuant to the Trustee Instructions, those assets cannot be included in the Decedent’s Trust because they cannot comprise Dixie’s separate property, nor can they comprise Dixie’s share of the community or common property. Consequently, Jack’s assets accumulated after Dixie’s death are part of the Survivor’s Trust and are subject to the Amendment. See § 72-38-602(2), MCA (“If a revocable trust is created or funded by more than one settlor . . . each settlor may . . . amend the trust with regard the portion of the trust property attributable to that settlor’s contribution.”). ¶30 Upon remand, the District Court must calculate the Trust assets at the time of Dixie’s death, and it must divide the value of those assets equally between the Decedent’s Trust and the Survivor’s Trust. The court also must calculate the value of the assets Jack accrued after Dixie’s death and apportion them to the Survivor’s Trust. Additionally, in light of our conclusion that the revocable Survivor’s Trust—which Jack had the authority to amend—came into existence, the District Court must revisit its consideration of the life estate that Jack conveyed to Ellie in their marital home. 15 ¶31 2. Whether the District Court incorrectly determined that Siblings did not forfeit their interests in the Trust pursuant to the no contest provisions of the Trust Agreement and Jack’s will. ¶32 The Trust Agreement’s no contest provision provides that if any beneficiary hereunder asserts any claim (except a legally enforceable debt), statutory election, or other right or interest against or in Trustor’s estate, Trustor’s Will, or any properties of this trust, other than pursuant to the express terms hereof or of said Will, or directly or indirectly contests, disputes, or calls into question, before any court, the validity of this instrument or of said Will, then . . . [that person] shall thereby absolutely forfeit any and all beneficial interests of whatsoever kind and nature which such beneficiary might otherwise have under this instrument. The no contest provision of Jack’s will in like fashion provides that if any beneficiary of Jack’s estate “seeks through any court proceeding to prevent the admission to probate or to contest the validity of this Will or any of its provisions, any share or interest in [Jack’s] estate given to that beneficiary under this will is hereby revoked.” ¶33 The District Court concluded that the no contest provisions did not proscribe Siblings’ actions. It determined that in the probate proceeding, “George sought to admit [Jack’s] Will to probate and to force Ellie to account for her conduct as purported trustee.” In the civil proceeding, the court determined that Siblings “sought damages from Ellie for conversion of trust assets and breach of fiduciary duties while she acted as trustee.” Based on its analysis of the two proceedings, the court concluded that Siblings “never attacked the Trust Agreement.” Furthermore, the court concluded, Siblings’ “actions do not ‘contest’ or ‘dispute’ the trust’s validity or assert an interest other than the one conveyed by the terms of the Trust.” Accordingly, the District Court held that the plain language of the Trust Agreement’s no contest provision “does not apply to such 16 conduct.” The District Court concluded similarly that the no contest provision of Jack’s will did not apply to Siblings’ conduct. ¶34 We agree with the District Court. A review of Siblings’ complaint in the civil proceeding and George’s petition in the probate proceeding establishes that they—similar to Ellie—simply were trying to ascertain the meaning of the Trust’s language. Our conclusion that the Trust Agreement is ambiguous establishes further that Siblings acted within reason in trying to determine the Trust’s construction. Accordingly, we conclude that the District Court correctly determined that Siblings did not forfeit their interests in the Trust. CONCLUSION ¶35 We reverse the District Court’s holding that the Amendment was invalid and remand for further proceedings consistent with this Opinion. We affirm the District Court’s conclusion that Siblings did not forfeit their interest in the Trust. /S/ BETH BAKER We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

October 11, 2016

e69f9863-664d-4c32-819f-6c7201f0444b

Krakauer v. Comm’n of Higher Educ.

2016 MT 230

DA 15-0502

Montana

Montana Supreme Court

DA 15-0502 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 230 JON KRAKAUER, Petitioner and Appellee, v. STATE OF MONTANA, by and through its COMMISSIONER OF HIGHER EDUCATION, Clayton T. Christian, Respondent and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDV-2014-117 Honorable Kathy Seeley, Presiding Judge COUNSEL OF RECORD: For Appellant: Vivian V. Hammill (argued), Jessica M. Brubaker, Special Assistant Attorneys General, Helena, Montana For Appellee: Peter Michael Meloy (argued), Meloy Law Firm, Helena, Montana For Amici Student Press Law Center, et al.: David K. W. Wilson, Jr., Morrison, Sherwood, Wilson & Deola, PLLP, Helena, Montana For Amicus United States: Phillip H. Rosenfelt, Deborah Friendly, Rahul Reddy, U.S. Department of Education, Washington, DC Joyce R. Branda, Alisa B. Klein, Tara S. Morrissey, U.S. Department of Justice, Washington, DC Michael Cotter, Victoria Francis, U.S. Attorney’s Office, Billings, Montana 09/19/2016 Case Number: DA 15-0502 2 Argued: April 27, 2016 Submitted: May 18, 2016 Decided: September 19, 2016 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 The Commissioner of Higher Education, Clayton Christian (Commissioner), challenges the summary judgment order entered by the First Judicial District Court, Lewis and Clark County, in favor of Petitioner Jon Krakauer (Krakauer), which ordered the release/inspection of certain student disciplinary records. We affirm in part, reverse in part, and remand for further proceedings. The Commissioner raises several issues, which we restate as follows: 1. Does Krakauer, a Colorado resident, have standing to avail himself of the right to know granted under Article II, Section 9 of the Montana Constitution? 2. Is the release of records responsive to Krakauer’s request prohibited by the Family Educational Rights and Privacy Act of 1974 (FERPA), as amended, and/or by § 20-25-515, MCA? 3. How does Article II, Section 9 of the Montana Constitution apply to the request for release of the subject student records? 4. Did the District Court abuse its discretion when it awarded attorney fees and costs to Krakauer? Because we remand for further proceedings, we do not address the merits of the attorney fee issue. We vacate the fee award so that the matter may be reconsidered upon conclusion of the proceeding. PROCEDURAL AND FACTUAL BACKGROUND ¶2 This is a dispute over release of student records related to allegations of sexual assault occurring near the Missoula campus of the University of Montana (University). The underlying allegations of the case were part of a broader campus cultural concern that garnered local and national media attention. Krakauer, a journalist and resident of 4 Colorado, conducted an investigation and published a book chronicling instances of alleged sexual misconduct on or near the University campus. This case involves one of those instances. When Krakauer’s request for release of certain student records related to the matter was denied by the Commissioner, Krakauer initiated this action by filing a petition in the First Judicial District Court. ¶3 In support of his petition, Krakauer submitted documents that the United States District Court for the District of Montana had previously unsealed and released. Doe v. Univ. of Mont., No. CV 12-77-M-DLC, 2012 U.S. Dist. LEXIS 88519 (D. Mont. June 26, 2012), available at https://perma.cc/3RRE-ETXB.1 There, a student (Doe) initiated the action under seal, seeking a preliminary injunction halting the University’s disciplinary proceedings against him. The documents, now part of the record here, indicate that after a female student made an allegation that Doe had raped her in an off-campus apartment, the University initiated an investigation into a possible violation of the Student Conduct Code. Dean of Students Charles Couture determined that Doe committed sexual intercourse without consent, and as sanctions, recommended Doe’s immediate expulsion from the University and restriction from all University property and University-sponsored events. Doe, represented by counsel, appealed the Dean’s determination to the University Court, a body made up of faculty, staff, and students appointed to hear disciplinary matters. 1 The United States District Court ordered that the documents, including the letters and findings of the Dean, the University Court, and University President Royce Engstrom, would have students’ names, personal information, and pertinent dates redacted. 5 ¶4 The University Court conducted a hearing and concluded by a 5-2 vote that Doe had committed sexual intercourse without consent, and further concluded by a unanimous vote of 7-0 that he should be sanctioned by expulsion from the University. Pursuant to the Student Conduct Code, Doe requested that the University Court’s determination be reviewed by President Engstrom. President Engstrom’s review considered whether the evidence provided a reasonable basis for the findings and disciplinary sanction, and whether procedural errors were so substantial as to deny a fair hearing to either party. President Engstrom upheld the University Court’s findings and proposed sanction, and found no procedural error that denied a fair hearing. ¶5 As the final step in the disciplinary appeal process, Doe appealed President Engstrom’s decision to the Commissioner, whose office acknowledged receipt of the appeal. This is the last step in the process documented in the records released by the U.S. District Court in Doe. Nothing more is documented there or in the record here about the Commissioner’s subsequent actions in the case. ¶6 Krakauer filed a request with the Commissioner’s office on January 17, 2014, naming a particular student and asking for “the opportunity to inspect or obtain copies of public records that concern the actions of the Office of the Commissioner of Higher Education in July and August 2012 regarding the ruling by the University Court of the University of Montana in which student . . . was found guilty of rape and was ordered expelled from the University.” Krakauer asserted factual connections between the federal Doe case and a highly-publicized state criminal proceeding that had been initiated against the then-starting quarterback of the University’s football team. He maintained that the 6 student Doe and the quarterback were the same person, and his request to the Commissioner named the student specifically. Krakauer postulated that the Commissioner must have overturned the University Court’s and President Engstrom’s decision and sanction of expulsion, noting that the student had “remained in school and continued to participate as the Grizzly quarterback.” ¶7 The Commissioner refused to acknowledge that such records existed, and further refused to permit inspection or release of any such documents, asserting that federal and state law prevent him from doing so. Krakauer initiated this action on February 12, 2014, citing the right to know under the Montana Constitution. Upon cross-motions for summary judgment, and after holding a hearing, the District Court granted summary judgment to Krakauer, and ordered the Commissioner to “make available for inspection and/or copying within 21 days” the requested records, with students’ names, birthdates, social security numbers, and other identifying information redacted. ¶8 The Commissioner appealed and we initially dismissed the case without prejudice, as the District Court had not yet entered an order addressing the attorney fee issue. The District Court awarded fees to Krakauer on June 19, 2015, and the Commissioner again undertook an appeal. STANDARDS OF REVIEW ¶9 “We conduct de novo review of summary-judgment orders, performing the same analysis as does a district court pursuant to Rule 56 of the Montana Rules of Civil Procedure.” Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186 (citing LaTray v. City of Havre, 2000 MT 119, ¶ 14, 299 Mont. 449, 999 P.2d 1010). 7 ¶10 Substantively, Krakauer’s Petition was based upon the constitutional right to know, and the Commissioner likewise raises constitutional issues. “Our review of questions involving constitutional law is plenary. A district court’s resolution of an issue involving a question of constitutional law is a conclusion of law which we review to determine whether the conclusion is correct.” Bryan v. Yellowstone Cnty. Elementary Sch. Dist. No. 2, 2002 MT 264, ¶ 16, 312 Mont. 257, 60 P.3d 381 (internal citation omitted) (citing Schuff v. A.T. Klemens & Son, 2000 MT 357, ¶ 28, 303 Mont. 274, 16 P.3d 1002). DISCUSSION ¶11 1. Does Krakauer, a Colorado resident, have standing to avail himself of the right to know granted under Article II, Section 9 of the Montana Constitution? ¶12 The Commissioner argues that Krakauer, as a resident of Colorado, does not have standing to pursue his Petition, because he is not a party intended to benefit from the Montana Constitutional right to know provision, and related statutes. The Commissioner argues this privilege was created and enacted for the sole benefit of Montana citizens, to allow them access to the workings of their own government. ¶13 In Schoof v. Nesbit, 2014 MT 6, 373 Mont. 226, 316 P.3d 831, we clarified the standing requirements, and more specifically the required showing for injury, under Article II, Section 9 of the Montana Constitution. After doing so for purposes of that case, we noted, “It is not appropriate in this case to address the parameters of standing for right to know and right of participation claims that may arise in other contexts.” Schoof, ¶ 25. Later the same year, we addressed another standing argument related to Article II, 8 Section 9 of the Montana Constitution, in Shockley v. Cascade Cnty., 2014 MT 281, 376 Mont. 493, 336 P.3d 375. There, we held that the Montana Constitution does not prohibit a citizen of one Montana county from requesting public documents from a public body in another county. Shockley, ¶ 22. We declined to address “the question of whether standing extends beyond Montana citizens[.]” Shockley, ¶ 23. That question arises here. ¶14 Article II, Section 9 of the Montana Constitution is short and clear. “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 Commissioner asks this Court to consider that, while the actual constitutional language uses the word “person,” the enabling statutes use the word “citizen” in describing the persons having the right to inspect public documents. Compare § 2-6-102, MCA (2013) (“Every citizen has a right to inspect and take a copy of any public writings of this state . . . .”) (repealed 2015), and 2015 Mont. Laws 1484, 1486 (effective date Oct. 1, 2015) (“Except as provided in subsections (2) and (3), every person has a right to examine and obtain a copy of any public information of this state.”). The Commissioner also cites to the use of the word “citizen” in transcripts of debates about the issue during the Montana Constitutional Convention. ¶15 As we have previously stated, Article II, Section 9 of the Montana Constitution is “unambiguous and capable of interpretation from the language of the provision alone.” Great Falls Tribune Co. v. Day, 1998 MT 133, ¶ 30, 289 Mont. 155, 959 P.2d 508 (citing Great Falls Tribune v. District Court of Eighth Judicial Dist., 186 Mont. 433, 437, 608 9 P.2d 116, 119 (1980)). We have also stated that the provision is “unique, clear and unequivocal,” and that “[w]e are precluded, by general principles of constitutional construction, from resorting to extrinsic methods of interpretation.”2 Associated Press v. Bd. of Pub. Educ., 246 Mont. 386, 391, 804 P.2d 376, 379 (1991). We thus rely on the language of the provision itself, which expressly provides that “no person” shall be deprived of the right to examine documents or observe the deliberations of public bodies, except when required by the demands of individual privacy. ¶16 “Since the alleged injury is premised on the violation of constitutional and statutory rights, standing depends on ‘whether the constitutional or statutory provision . . . can be understood as granting persons in the plaintiff’s position a right to judicial relief.’” Schoof, ¶ 21 (citing Warth v. Seldin, 422 U.S. 490, 500, 95 S. Ct. 2197, 2206 (1975)). Therefore, under the plain language of the provision, we hold that Krakauer, though an out-of-state resident, has standing to invoke the right to know guarantees under Article II, Section 9 of the Montana Constitution.3 2 The Commissioner correctly points out that we noted the language of the Constitutional Convention in Shockley, ¶ 20. However, we cited to the Verbatim Transcript in order to illustrate the general goal of Article II, Section 9 of the Montana Constitution—namely, government transparency and accountability. While the quotes we cited were illustrative of the general purpose of the provision, resorting to these extrinsic sources was unnecessary for interpretation. Because the constitutional convention delegates ultimately used the word “person” when describing the right to know, and in light of the amended wording of the open record statutory scheme (referenced above), which now also uses the term “person,” we are not persuaded by the Commissioner’s argument. 3 The standing of an out-of-state resident has not previously been presented to the Court as a contested legal issue, but, as a practical matter, out-of-state corporate residents have often availed themselves of the rights under Article II, Section 9 of the Montana Constitution. See, e.g., Associated Press, Inc., a New York not-for-profit corporation registered to do business in Montana v. Mont. Dep’t of Revenue, 2000 MT 160, 300 Mont. 233, 4 P.3d 5. 10 ¶17 2. Is the release of records responsive to Krakauer’s request prohibited by the Family Educational Rights and Privacy Act of 1974 (FERPA), as amended, and/or by § 20-25-515, MCA? ¶18 The Commissioner contends that because Krakauer’s records request referenced a student by name, FERPA prohibits his office from releasing any records responsive to Krakauer’s request. The Commissioner argues that § 20-25-515, MCA, likewise prohibits him from releasing the requested records. Krakauer responds that FERPA is essentially spending clause legislation that does not actually prohibit the University or the Commissioner from releasing records, that one of the explicit exceptions to FERPA’s general prohibition on the release of student records applies in this context, and that § 20-25-515, MCA, actually permits the release of the requested records. a. General Applicability of FERPA ¶19 Krakauer argues that FERPA “simply does not prohibit anything”; it merely conditions federal funding on confidentiality compliance. He cites to Bd. of Trs. v. Cut Bank Pioneer Press, 2007 MT 115, ¶ 24, 337 Mont. 229, 160 P.3d 482, where we stated that FERPA has been described as “spending legislation.” Krakauer contends that the Commissioner’s fear of losing federal funding is “wholly speculative,” and points out that, in its amicus brief, the United States has conspicuously refrained from “any claim or assertion that . . . the [Montana University System] will suffer any penalty” if it releases the requested documents. Krakauer asserts that “FERPA’s spending legislation merely sets conditions on the receipt of federal funds and cannot forbid or prohibit any state action.” 11 ¶20 Congress enacted FERPA to “protect the privacy of students and their parents.” Pioneer Press, ¶ 24; see also 34 C.F.R. § 99.2 (“The purpose of this part is to set out requirements for the protection of privacy of parents and students . . . .”). FERPA prohibits educational institutions and agencies from having a policy or practice of releasing education records or personally identifiable information contained in education records, and conditions receipt of federal monies on those institutions’ compliance with its directives. See 20 U.S.C. § 1232g. The University, as a recipient of federal funds, agreed in its Program Participation Agreement to comply with “The Family Educational Rights and Privacy Act of 1974 and the implementing regulations . . . [,]” and thereby assumed the risk the Secretary of Education would withhold future funds in the event of substantial non-compliance. See 20 U.S.C. § 1234c(a)(1). ¶21 Krakauer is seeking records related to a specific student’s disciplinary proceedings, and the Commissioner argues that Krakauer’s particular request fell squarely under FERPA’s prohibitions. The Commissioner offers that another kind of request would have been handled differently by his office: “If Krakauer had wanted an understanding of how the Commissioner’s office handles appeals related to student conduct code complaints . . . , he could have requested all decisions resolving complaints for some appropriate specified period of time, and he would have received the Commissioner’s decisions for a variety of cases with the names, dates and any other personally identifiable information redacted.” ¶22 Title 20, Section 1232g(a)(4)(A) of U.S. Code provides: “For the purposes of this section, the term ‘education records’ means, . . . , those records, files, documents, and 12 other materials which—(i) contain information directly related to a student; and (ii) are maintained by an educational agency or institution or by a person acting for such agency or institution.” (Emphasis added.) In Pioneer Press, ¶ 27, we noted that several jurisdictions had interpreted the term “education records” to exclude disciplinary records. However, since that decision, as the Commissioner and amicus United States point out, not only have FERPA regulations been broadened, but courts have recognized that disciplinary records constitute “education records” under FERPA. See State ex rel. ESPN, Inc. v. Ohio State Univ., 970 N.E.2d 939, 946-47 (Ohio 2012) (“we agree with the Sixth Circuit and hold that the [student disciplinary] records here generally constitute ‘education records’ subject to FERPA . . . . The records here—insofar as they contain information identifying student-athletes—are directly related to the students”).4 FERPA regulations also now confirm that disciplinary records fall within the purview of the Act, authorizing limited, non-consensual release of student disciplinary records in certain circumstances. See, e.g., 34 C.F.R. § 99.31(a)(13) & (14). Based upon the understanding that the term “education records” encompasses disciplinary records, the Commissioner correctly asserted that the records at issue here fall under the application of FERPA. ¶23 It is also apparent to us that the Commissioner, as Chief Executive Officer of the Montana University System (MUS), was properly cognizant of the heavy strings that FERPA attached to the MUS’ federal funding. Although FERPA has been characterized 4 We distinguished such holdings in Pioneer Press on the ground that releasing records with all personally identifiable information redacted would not violate FERPA. Pioneer Press, ¶ 31. However, Krakauer’s request listed a specific student by name, thus requiring the Commissioner’s office to necessarily release personally identifying information regarding the student. See 34 C.F.R. § 99.3 (see “Personally Identifiable Information” at (g)). 13 as “spending legislation,” we find Krakauer’s argument that it “prohibits nothing” delusive. FERPA is more than mere words in the wind. As outlined above, the University, a unit of the MUS, promised to abide by FERPA’s directives in exchange for federal funding. By signing the Program Participation Agreement, the University acknowledged the potential consequence of loss of federal funding in the event that it violated FERPA. See United States v. Miami Univ., 294 F.3d 797, 808 (6th Cir. 2002) (“Even in the absence of statutory authority, the United States has the inherent power to sue to enforce conditions imposed on the recipients of federal grants. ‘Legislation enacted pursuant to the spending power [, like the FERPA,] is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions.’”) (citing Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 101 S. Ct. 1531 (1981)). Whether or not FERPA explicitly prohibits state action, the financial risk it imposes upon MUS for violation of the statute is a real one. As the Commissioner stated, “The MUS should not be put in the position of predicting what decisions might be made by the federal government.” b. Applicability of FERPA to the Subject Documents ¶24 FERPA prohibits institutions from having a “‘policy or practice of permitting the release of education records (or personally identifiable information contained therein . . .) of students without the written consent of the students or their parents.’” Miami Univ., 294 F.3d at 806 (internal brackets omitted) (citing 20 U.S.C. § 1232g(b)(1)). The regulation defines “Personally Identifiable Information” to include information such as a student’s name, family names, date of birth, or “other information that, alone or in 14 combination, is linked or linkable to a specific student that would allow a reasonable person . . . to identify the student with reasonable certainty[.]” 34 C.F.R. § 99.3 (see “Personally Identifiable Information” at (a)–(f)). Since our decision in Pioneer Press, this definition has been expanded to include “[i]nformation requested by a person who the educational agency or institution reasonably believes knows the identity of the student to whom the education record relates.” 34 C.F.R. § 99.3 (see “Personally Identifiable Information” at (g)). The records in question facially fall within the restrictions of FERPA, and the Commissioner rightly considered FERPA’s requirements in determining whether to release them. As noted by amicus United States, “[W]here a request targets education records relating to a particular student, identified by name, FERPA’s protections unquestionably apply.” Under these provisions, had the Commissioner released the documents that Krakauer originally requested, using the specific student’s name, he would have violated the statute. FERPA and its accompanying regulatory scheme, including its expanded definition of “Personally Identifiable Information,” prohibited the unilateral release of the requested documents by the Commissioner, as Krakauer clearly knew the identity of the student that he named specifically in his request. c. Exceptions Permitting Release Under FERPA ¶25 While FERPA generally prohibits the release of student educational records and personally identifiable information in those records, the records do not necessarily recede into the recesses of Chateau d’If, never to see the light of day. FERPA contains several 15 non-consensual exceptions that permit an institution to release educational records. See, e.g., 20 U.S.C. § 1232g(b)(1)(c); 20 U.S.C. § 1232g(b)(3). ¶26 Krakauer argues that the requested records must be made available under the exception that provides for release of the final results of a disciplinary proceeding “if the institution determines as a result of that disciplinary proceeding that the student committed a violation of the institution’s rules or policies with respect to such crime or offense.” 20 U.S.C. § 1232g(b)(6)(B).5 He argues that the exception “explicitly authorizes disclosure of records related to the Commissioner’s decision since it is, undisputedly, the ‘final result’ of the [MUS]’s disciplinary proceeding against [the named student].” The information permitted to be released under this exception is limited, as “final results” include “only the name of the student, the violation committed, and any sanction imposed by the institution on that student[,]” and other information, including “the name of any other student, such as a victim or witness,” can only be released upon the written consent of those other persons. 20 U.S.C. § 1232g(b)(6)(C)(i)-(ii). As noted by the Commissioner, this narrow exception permits release of limited information about “a violation” of certain University rules, and the sanction imposed. Thus, if no violation was found to have occurred, this exception, by its own terms, would not apply. The record before us here does not indicate whether the Commissioner ultimately held that a violation occurred, and thus, we are unable to now determine whether this exception authorized release of limited information related to Krakauer’s request. However, upon remand and after conducting an in camera review of the records, the District Court may 5 The District Court did not rule on the applicability of this exception. 16 consider the applicability of this exception along with the other considerations set forth below. ¶27 Additionally, FERPA authorizes release of personally identifiable information in education records when “such information is furnished in compliance with judicial order, or pursuant to any lawfully issued subpoena, upon condition that parents and the students are notified6 of all such orders or subpoenas . . . .” 20 U.S.C. § 1232g(b)(2)(B); 34 C.F.R. § 99.31(a)(9)(i). This exception broadly permits release of personally identifiable information pursuant to a “judicial order, or pursuant to any lawfully issued subpoena,” neither restricting the orders to those issued by particular, such as federal, courts nor limiting the legal basis or grounds for release of the records. 20 U.S.C. § 1232g(b)(2)(B). FERPA thus generally authorizes the release of records upon orders from courts acting properly within their jurisdiction. Krakauer’s petition sought an order pursuant to this exception. d. Section 20-25-515, MCA ¶28 Notably, Montana law operates similarly to FERPA. Chapter 357, Laws of Montana (1973), was entitled “An Act Requiring Montana Colleges and Universities to Develop Procedures to Protect a Student’s Right to Privacy Concerning . . . His College or University Records,” and stated it was “the legislature’s intent that an institution of the 6 The federal statute and corresponding regulation both require that such notice would be given to the student or parent in advance of the issuance of any subpoena or court order that might release such documents. Even if, as in this case, the subject student is not a party to the lawsuit, an opportunity is provided for the student (or parents) to be heard before such records are released. “The educational agency or institution may disclose information . . . only if the agency or institution makes a reasonable effort to notify the parent or eligible student of the order or subpoena in advance of compliance, so that the parent or eligible student may seek protective action . . . .” 34 C.F.R. § 99.31(a)(9)(ii). 17 university system of Montana is obligated to respect a student’s right to privacy” in the student’s records. 1973 Mont. Laws 706. As codified from that 1973 Act, § 20-25-515, MCA, states: A university or college shall release a student’s academic record only when requested by the student or by a subpoena issued by a court or tribunal of competent jurisdiction. A student’s written permission must be obtained before the university or college may release any other kind of record unless such record shall have been subpoenaed by a court or tribunal of competent jurisdiction.7 State law thus also prohibits disclosure of student records, but, similar to FERPA, permits release when “subpoenaed by a court or tribunal of competent jurisdiction.” Section 20- 25-515, MCA. ¶29 Krakauer argues that § 20-25-515, MCA, “does not condition a university’s disclosure of student records on a court order. It merely requires a subpoena, which in Montana can be effectuated at any time by an issuing party’s counsel of record.” The Commissioner replies that, under Krakauer’s interpretation, the statute would have no meaning because “a party would only need to file a lawsuit and request the records through subpoena,” and, in any event, the District Court did not issue a subpoena here. ¶30 The District Court ordered the records be made available for inspection in its Memorandum and Order, not by a subpoena. Answering the Commissioner’s argument, a reading of the statute as enacted in 1973 makes it clear that the Legislature intended student records would be subject to release following legal process conducted “by a court or tribunal of competent jurisdiction,” and did not intend to restrict that legal process 7 Section 20-25-516(1), MCA, also requires that academic records “be kept separate from disciplinary and all other records.” 18 exclusively to the issuance of a “subpoena,” the purpose of which is to compel a person’s attendance in a court or proceeding. See § 26-2-102, MCA. The statute is satisfied by the issuance of a court order upon completion of that legal process. Answering Krakauer’s argument, merely filing a lawsuit and requesting a records subpoena without a court’s consideration of a student’s privacy interests would fail to satisfy the statute’s requirements that student privacy be protected and that release of records be prohibited until a court or tribunal conducts that legal process. In Montana, the law regarding a student’s privacy is governed by the Montana Constitution, by which a student’s right to privacy in his or her records is balanced against the public’s right to know and obtain the records. That process must be completed before requested records can be released pursuant to the applicable judicial exceptions in FERPA and § 20-25-515, MCA. ¶31 3. How does Article II, Section 9 of the Montana Constitution apply to the request for release of the subject student records? ¶32 The Commissioner challenges the District Court’s determination that the student records at issue should be released, arguing that the court “incorrectly shifted the balance between the right to privacy and the right to know in favor of Krakauer and his book deal and against the well-established privacy rights of the student named in his request[.]” In response, Krakauer argues that the public’s right to know outweighs the privacy expectation in the records here because the specific student at issue has a diminished expectation of privacy, which the District Court correctly determined. ¶33 The District Court emphasized the public exposure of the events in question, noting that “the entire incident, from the initial administrative investigation to the 19 conclusion of the criminal trial, is a matter of public record. The only aspect of the lengthy process that is not a matter of public record is the action taken by the Commissioner.” Citing approvingly of the U.S. District Court’s reasoning in Doe that “while there may be good reasons to keep secret the names of students involved in a University disciplinary proceeding, the Court can conceive of no compelling justification to keep secret the manner in which the University deals with those students,” the District Court determined that the subject student “does not have a reasonable expectation of privacy regarding the redacted records of the Commissioner,” and therefore ruled that the merits of public disclosure outweighed “the individual privacy rights of the student in this case.” The court did not conduct an in camera review of the records, but broadly ordered the Commissioner “to make available for inspection and/or copying” to Krakauer the records responsive to his request, subject to redaction of student identification information, presumably to be accomplished by the Commissioner. ¶34 Our concerns over the principles applied by the District Court in the constitutional balancing process, as well as the unique considerations under the federal and state law applicable to student records, compel us to reverse the District Court’s order and to remand this matter with instructions to the District Court to conduct an in camera review of the requested records, and to re-apply the constitutional balancing test to those records in accordance with the following analysis of the interests here at issue. ¶35 Article II, Section 9 of the Montana Constitution provides that “[n]o person shall be deprived of the right to examine documents . . . of all public bodies or agencies of state government and its subdivisions, except in cases in which the demand of individual 20 privacy clearly exceeds the merits of public disclosure.” As we have explained, “[t]his constitutional provision generally requires information regarding state government to be disclosed to the public, except in cases where the demand of individual privacy clearly exceeds the merits of public disclosure.” Associated Press, Inc., ¶ 24. Indeed, “our constitution gives a high priority to the public’s right to know.” Lence v. Hagadone Inv. Co., 258 Mont. 433, 447, 853 P.2d 1230, 1239 (1993), overruled on separate grounds by Sacco v. High Country Indep. Press, 271 Mont. 209, 896 P.2d 411 (1995). Krakauer asserts an interest in the process that the Commissioner employed in reviewing the student’s appeal and points out: “It cannot be denied that the entire rape culture at the University, and universities in general, has become one of increasing public import and concern[,]” and “The University’s compliance with its Title IX obligations is also one of public import and interest.” We acknowledge that Krakauer’s interest in the MUS’ policies in responding to and handling complaints of alleged sexual assault are important matters of concern to the public. ¶36 However, as the District Court correctly noted, “[T]he right to know is not absolute. It requires a balancing of the competing constitutional interests in the context of the facts of each case, to determine whether the demands of individual privacy clearly exceed the merits of public disclosure.” Associated Press, Inc., ¶ 24 (bold in original) (citations and internal quotation marks omitted). Pursuant to the Montana Constitution, we have established a two-part test in order to strike a balance between the needs for government transparency and individual privacy: (1) “whether the person involved had a subjective or actual expectation of privacy[,]” and (2) “whether society is willing to 21 recognize that expectation as reasonable.” Great Falls Tribune Co. v. Day, 1998 MT 133, ¶ 20, 289 Mont. 155, 959 P.2d 508 (citation omitted). ¶37 In the context of this particular case, as discussed above, the national and state legislatures have taken the affirmative action of enacting legislation establishing the privacy interests of students in their records, as a matter of law. This action sets this case apart from others involving general privacy interests, and courts must honor the unique privacy protection legislatively cloaked around the subject records by factoring that enhanced privacy interest into the balancing test.8 We have implicitly recognized this interest in the past, Pioneer Press, ¶ 36, and since then, as noted above, stricter FERPA regulations have been adopted. We cite, merely for illustrative purposes because it does not contemplate Montana law, the phrasing of the increased burden that must be shown by a petitioner in order to access protected student records, provided by the United States District Court for the Middle District of Pennsylvania: When a third-party seeks disclosure of education records covered by FERPA, the trial judge, in exercise of discretion, must conduct a balancing test in which the privacy interests of the students are weighed against the genuine need of the party requesting the information. While FERPA does not create a privilege, it does represent the strong public policy of 8 We have previously recognized enhanced or reduced privacy interests as part of the determination of whether society would recognize the privacy interest as reasonable, depending on the circumstances. See Great Falls Tribune Co. v. Cascade Cnty. Sheriff, 238 Mont. 103, 107, 775 P.2d 1267, 1269 (1989) (“[L]aw enforcement officers occupy positions of great public trust. Whatever privacy interest the officers have in the release of their names as having been disciplined, it is not one which society recognizes as a strong right.”); Billings Gazette v. City of Billings, 2013 MT 334, ¶ 49, 372 Mont. 409, 313 P.3d 129 (“Where the status of the employee necessitates a high level of public trust, such as an elected official or high level employee, the expectation of privacy in misconduct may be found to be significantly lower than for an administrative employee. Similarly, an employee may have a lower expectation of privacy in misconduct related to a duty of public trust, such as responsibility for spending public money or educating children.”). 22 protecting the privacy of student records. Courts balance the potential harm to the privacy interests of students with the importance and relevance of the sought information to resolving the claims before the court. Moeck v. Pleasant Valley Sch. Dist., No. 3:13-CV-1305, 2014 U.S. Dist. LEXIS 142431, at *6-7 (M.D. Pa. Oct. 7, 2014) (internal citations omitted) (emphasis added). This enhanced privacy interest must be considered and factored into the constitutional balancing test on remand. ¶38 The District Court should not have concluded, without noting the unique facts here, that the student at issue “does not have a reasonable expectation of privacy regarding the redacted records of the Commissioner,” in reliance on Doe. The U.S. District Court in Doe was not presented, as here, with a records request explicitly identifying a particular student. Rather, the Doe case involved an unnamed litigant. While redaction may have served to protect the privacy interest of the unnamed litigant in Doe, and may well provide a privacy safety net in many situations, redaction of records provided in response to a request about a particular student may well be completely futile. As amicus United States points out, “when an educational institution is asked to disclose education records about a particular person, then no amount of redaction in [the] records themselves will protect the person’s identity, because the requestor knows exactly whom the records are about.” Obviously, records provided in response to a request naming a particular student will be about that student, whether redacted or not, and thus, there is more of machination than of cooperation in Krakauer’s offer, repeated at oral argument, to accept redacted records in response to his request. Consequently, on remand, the District Court must consider whether the futility of redaction affects the 23 privacy analysis and the ultimate determination about what records can be released, if any. ¶39 We have recognized the efficacy of an in camera review of requested records by a district court to ensure that privacy interests are protected. Billings Gazette, ¶ 42; Jefferson Cnty. v. Mont. Standard, 2003 MT 304, ¶ 19, 318 Mont. 173, 79 P.3d 805 (“it is proper for a district court to conduct such an in camera inspection in order to balance the privacy rights of all of the individuals involved in the case against the public’s right to know.”). As these cases note, in camera review is particularly appropriate when the interests of third parties are involved. As the Commissioner stated at oral argument, the requested records could also include information pertaining to student members of the University Court, the victim, and other University students who acted as witnesses in the multiple-step process, and counsel hinted that the records are extensive. On remand, the District Court should review the requested documents in camera, and in the event it determines to release any document after conducting the balancing test, every precaution should be taken to protect the personal information about other persons contained in the documents. ¶40 We have stated that, when conducting the balancing test, a district court must consider all of the relevant facts of each case. See Associated Press, Inc., ¶ 24 (“It requires a balancing of the competing constitutional interests in the context of the facts of each case, to determine whether the demands of individual privacy clearly exceed the merits of public disclosure.”). Both parties argue at great length about various factors at issue here, such as the publicity that has followed this case, the source of the original 24 request, the reasons behind the request, the named student’s status as an athlete at a publicly-funded university, and the prior litigation, all of which may be considered and weighted by the District Court when conducting the balancing test. We decline to address these issues individually in favor of the District Court’s application of the balancing test on remand. ¶41 Finally, the Commissioner argues that an order by the District Court requiring release of documents pursuant to Krakauer’s request would “create binding precedent” establishing a “policy or practice” of the MUS to release personally identifiable information, in violation of FERPA. However, we disagree. As noted in Miami University, “Once the conditions and the funds are accepted, the school is indeed prohibited from systematically releasing education records without consent.” 294 F.3d at 809 (emphasis added). A court order for release entered in one case does not require MUS to commence systematically releasing student records. Each case turns on its individual facts and circumstances, assessed and weighed through the balancing test. While court decisions do set precedent, MUS will nonetheless still evaluate each request on the basis of its individual facts, assessing the request in light of the precedent that has been created by litigation. This review is not a systematic policy or practice of releasing student records in violation of FERPA, which provides an exception for the release of such information “in compliance with judicial order, or pursuant to any lawfully issued subpoena[.]” 20 U.S.C. § 1232g(b)(2)(B). If the MUS believes a request cannot be fulfilled without violating FERPA and state protections, that decision can be reviewed by the courts following the filing of a petition by either MUS or the requestor. 25 CONCLUSION ¶42 Having concluded that the records in question in this case appear to fall under the “Personally Identifiable Information” protection granted by FERPA, and also having concluded that FERPA and state statute provide an exception for release of information pursuant to a lawfully issued court order, we remand this case to the District Court for an in camera review of the documents in question. After giving due consideration to the unique interests at issue in this case, as discussed herein, the District Court will re-conduct the constitutional balancing test and determine what, if any, documents may be released and what redactions may be appropriate. As noted above, the exception to FERPA that allows for release of documents pursuant to a court order requires advance notice to the affected student or parents, and a district court must comply with this directive before releasing protected information. See Opinion, ¶ 27 n. 6. Because we remand this case for further proceedings, the award of attorney fees is vacated. ¶43 Reversed and remanded for further proceedings consistent with this Opinion. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ JOHN C. BROWN District Court Judge John C. Brown sitting for Justice Patricia Cotter 26 Justice Laurie McKinnon, dissenting. ¶44 Preliminarily, I disagree with the Court’s resolution of two smaller issues: our decision to remand for an in camera review to determine if an exception to nondisclosure applies pursuant to 20 U.S.C. § 1232g(b)(6)(B) and our failure to rule on the Commissioner’s request regarding attorney fees. ¶45 With respect to these issues, I agree with the Court that had the Commissioner released documents pursuant to Krakauer’s request for a specific student’s records, the Commissioner would have violated FERPA and its accompanying regulatory scheme. Opinion, ¶ 24. I depart from the Court, however, in our decision to remand for a determination of whether 20 U.S.C. § 1232g(b)(6)(B) applies, which is part of FERPA and the regulatory scheme. Pursuant to this provision of FERPA, a university may disclose to the public the final results of disciplinary proceedings against an alleged perpetrator of a crime of violence or nonforcible sex offense, but only if the university determines that the student violated the university’s rules or policies with respect to the offense. The Commissioner has stated on several occasions that this provision is inapplicable. As the Court states, “if no violation was found to have occurred, this exception, by its own terms, would not apply.” Opinion, ¶ 26. I therefore would not remand for the District Court to consider the applicability of this exception when counsel for the Commissioner has represented, following acknowledgment of the specific exception, the inapplicability of the subsection. Indeed, it is apparent that the reason Krakauer is interested in obtaining all of the student’s records is that the Commissioner found no violation. Further, as the Court properly notes, this narrow exception would 27 only permit release of limited information related to the name of the student, the violation committed, and any sanction imposed by the institution. Opinion, ¶ 26. The record already establishes that no sanctions were imposed; the Commissioner has represented, through counsel, that the specific exception is inapplicable; and Krakauer’s request identifies the student by name. It is therefore pointless to remand for an in camera review to determine whether the exception applies. ¶46 Montana law also prohibits the Commissioner from releasing the student’s academic records in response to Krakauer’s request. Section 20-25-515, MCA, prohibits the release of a student’s records absent consent of the student or “subpoena [issued] by a court or tribunal of competent jurisdiction.” At the time the Commissioner denied Krakauer’s request, the student had not consented to the release of his records and a subpoena or court order had not issued. Therefore, the Commissioner correctly refused to disclose the student’s academic records in response to Krakauer’s request. The Court nonetheless fails to find that the Commissioner’s actions in following both federal and state law within the context of a discretionary award of attorney fees pursuant to § 2-3-221, MCA, does not warrant a conclusion that Krakauer be responsible for his own fees and costs. Given the conclusion reached by the Court—that the Commissioner was required to follow FERPA and § 20-25-515, MCA—I would hold that the Commissioner is not responsible for Krakauer’s fees and costs since Krakauer has pursued an exception to FERPA and Montana law. Given the context of FERPA, the federal regulatory scheme, and Montana law, it would be unreasonable to conclude that the Commissioner should be held responsible for Krakauer’s fees and costs. 28 ¶47 A larger concern, however, is the Court’s decision to remand these proceedings for an in camera review by the District Court and our abbreviated analysis of the balancing test to be employed.1 In the context of this particular case, we have left unanswered many of the questions raised by the parties which, in my opinion, were incorrectly resolved as a matter of law by the District Court. Our guidance to the District Court is essentially that, “[t]his enhanced privacy interest must be considered and factored into the constitutional balancing test on remand.” Opinion, ¶ 37. In an attempt to describe “this enhanced privacy interest,” we cite “phrasing” from another jurisdiction, “merely for illustrative purposes,” but are unwilling to a set forth a standard, rule, or appropriate analysis regarding a statutorily protected enhanced privacy interest. In my opinion, we have failed to address the parties’ arguments. If correct legal principles and analyses are applied by this Court while considering the specificity of Krakauer’s request, it is not necessary to remand these proceedings to the District Court for an in camera review and balancing of privacy interests and the right to know. ¶48 When considering the disclosure of confidential information, the constitutional right to know granted by Article II, Section 9 of the Montana Constitution, must be balanced with the constitutional right of privacy granted by Article II, Section 10 of the Montana Constitution. We have stated that when balancing these competing interests, a court must perform a two-part test: (1) whether the individual has a subjective or actual expectation of privacy; and (2) whether society is willing to recognize that expectation as 1 Krakauer arguably foreclosed his opportunity for an in camera review of the records when he represented to the District Court and this Court that an in camera review was not necessary. 29 reasonable. Bozeman Daily Chronicle v. City of Bozeman Police Dep’t., 260 Mont 218, 225, 859 P.2d 435, 439 (1993). We have on many occasions determined that society is not willing to recognize as reasonable the privacy interest of individuals who hold positions of public trust when the information sought bears on that individual's ability to perform public duties. See Great Falls Tribune v. Cascade Cnty. Sheriff, 238 Mont. 103, 107, 775 P.2d 1267, 1269 (1989) (the public’s right to know outweighed the privacy interests of three disciplined police officers in the public release of their names because police officers hold positions of “great public trust”); Bozeman Daily Chronicle, 260 Mont. at 227, 859 P.2d at 440–41 (investigative documents associated with allegations of sexual intercourse without consent by an off-duty police officer were proper matters for public scrutiny because “such alleged misconduct went directly to the police officer’s breach of his position of public trust . . .”); Svaldi v. Anaconda-Deer Lodge Cnty., 2005 MT 17, ¶ 31, 325 Mont. 365, 106 P.3d 548, (a public school teacher entrusted with the care and instruction of children held a position of public trust and therefore the public had a right to view records from an investigation into the teacher’s abuse of students); and Billings Gazette v. City of Billings, 2013 MT 334, ¶ 49, 372 Mont. 409, 313 P.3d 129 (“an employee may have a lower expectation of privacy in misconduct related to a duty of public trust, such as responsibility for spending public money or educating children.”). ¶49 These cases, referred to by the Court in the Opinion, ¶ 37, n.8, are examples of a reduced expectation of privacy—reduced because the privacy interest is unreasonable and therefore not one that society is willing to recognize. They are examples of how a reduced expectation of privacy is balanced against the right of the public to know how its 30 public monies are spent or its public institutions are managed. Undisputedly public employees have no statutory protection for their privacy rights when the information relates to the ability of the individual to perform his public duties. Bozeman Daily Chronicle, 260 Mont. at 226–27, 859 P.2d at 440–41. Here, in contrast, we are applying an enhanced privacy interest, with significant protections afforded that interest by the Montana Legislature in Title 20, Chapter 25. In addition to § 20-25-515, MCA, prohibiting the release of student records unless there is consent or a lawfully issued subpoena, universities are prohibited from requiring students to waive privacy rights, § 20-25-512, MCA; students must be given written notice before university officials may enter their rooms, § 20-25-513, MCA; and academic transcripts may only contain information of an academic nature, § 20-25-516, MCA. The existence of these student privacy protections and the absence of any applicable exception establish both the actual expectation of privacy and the reasonableness of that expectation. Accordingly, when the privacy rights of the student may not be protected by redacting “personally identifiable information” the student’s right of privacy in school records outweighs the public’s right to know because that privacy interest has been statutorily determined to be reasonable. Once we have found an actual expectation of privacy that is reasonable, we must protect that privacy interest. See Bozeman Daily Chronicle, 260 Mont. at 228, 859 P.2d at 441. (“In this case . . . the victim of the alleged sexual assault and the witnesses involved in the investigation have a subjective or actual expectation of privacy which society is willing to recognize as reasonable. Accordingly, the privacy rights of the alleged victim and of the witnesses outweigh the public’s right to know and must be accorded adequate 31 protection in the release of any of the investigative documents at issue.”) Thus, whenever we cannot adequately protect a recognized reasonable expectation of privacy, the records may not be disclosed. The Court has presented no authority to the contrary. ¶50 Montana law does not distinguish between types of students. The protected interest a student has in his education records is not diminished if the information is already public or if there has been publicity about an event involving the student. Information in a student disciplinary proceeding is broader than that presented in a criminal proceeding, where a defendant receives numerous constitutional and statutory protections. Student education records exist primarily to assist the university in the education of its students. The fact that information revealed through the evolution of a criminal proceeding may also be duplicated within the broader student disciplinary file is irrelevant to whether the student maintains his privacy rights in his education records. The occurrence of a criminal proceeding, which must be public, does not serve to strip a student’s privacy interests from his confidential education files. The purposes and objectives underlying these separate proceedings are distinct and we should articulate as much for the trial courts. The laws protecting a student’s education records are neither limited nor lessened because a student has been charged with a criminal offense or is being scrutinized by the media. This remains true even though that student may be a star quarterback for a Montana university, a redshirt freshman from a small, rural Montana town, or any other student in whom the public may have a particular interest. ¶51 In agreeing with the Court that a student’s education records enjoy “the unique privacy protection [that is] legislatively cloaked around the subject records,” Opinion, 32 ¶ 37, I do not contend that a student’s privacy right is absolute. Many proceedings in other jurisdictions have balanced FERPA, state statutory provisions protecting the confidentiality of student records, and countervailing interests in disclosure See Ragusa v. Malverne Union Free Sch. Dist., 549 F. Supp. 2d 288, 293–94 (E.D.N.Y. 2008) (ordering the production of relevant education records in a discrimination case); Catrone v. Miles, 160 P.3d 1204, 1210–12 (Ariz. Ct. App. 2007) (holding that education records could be ordered to be produced in a medical malpractice case and noting “the protections afforded to educational records by statute do not prohibit, but rather permit, disclosure pursuant to court order”); Gaumond v. Trinity Repertory Co., 909 A.2d 512, 518 (R.I. 2006) (holding that FERPA does not bar the production of relevant education records pursuant to court order in a personal injury case). In many of these instances, the records were relevant to litigation that did not involve the records themselves. See Gaumond, 909 A.2d at 518 (distinguishing prior cases where public disclosure was sought by newspapers and was not granted). ¶52 In the context of Krakauer’s request for the specific student’s records, the student’s enhanced privacy interest would receive no protection. As the Court observes, “[o]bviously, records provided in response to a request naming a particular student will be about that student . . . .” Opinion, ¶ 38. Here, Krakauer requested a specific student’s records by name, because he wanted the specific student’s records. Had he been interested in the process by which the Commissioner handled complaints of sexual assault, his request would not have been specific as to the student. Krakauer’s request of the Commissioner was to “inspect or obtain copies of public records that concern the 33 actions of the Office of the Commissioner of Higher Education in July and August 2012, regarding the ruling by the University Court of the University of Montana in which student [name redacted] was found guilty of rape and expelled from the University.” With the exception of 20 U.S.C. § 1232g(b)(6)(B), which the Commissioner indicated was inapplicable, state and federal privacy laws clearly prohibited the Commissioner from disclosing the records based upon the specificity of the request. Significant to the resolution of these proceedings, Krakauer did not make his request in a manner which would allow the student’s “unique” privacy right—cloaked with legislative protection, Opinion, ¶ 37—to receive any semblance of protection through, for example, redaction of personally identifiable information. If Krakauer had wanted an understanding of how the Commissioner’s office handles appeals related to the student conduct code and, in particular, sexual assaults, he could have requested all decisions resolving complaints for an appropriate specified period of time. Such an interest is substantial and appropriately protected by our constitutional and statutory provisions concerning the public’s right to know. It is undisputed that the Commissioner would have responded to such a request by supplying the student education records with personally identifiable information redacted in a manner which would have also protected the student’s substantial privacy interest in his education records. Thus, given the manner in which Krakauer has made his request, any “balancing” of interests that could include protection of the student’s enhanced privacy interest is unobtainable. It is clear that what Krakauer sought were particular student records for the publication of his book. Although this Court has precedent for the disclosure of confidential records of a particular person, those cases exist in the context 34 of a reduced expectation of privacy of public employees. The student here is not a public employee, but a student—and Montana law does not distinguish between types of students and their expectation of privacy. Their records are uniformly private. Disclosure here violates not just the federal protections provided by FERPA, but also our own law in Montana. ¶53 I would reverse the judgment of the District Court. I would conclusively decide the issue of attorney fees and costs in favor of the Commissioner. Remand for in camera review is not necessary given the manner in which the request for records was made and that, as a result, no protection can be accorded the student’s substantial and weighty privacy interests. I would affirm on issue one. /S/ LAURIE McKINNON

September 19, 2016

25b9c3d1-07ce-4c32-a037-8eb321e14915

Pearson v. McPhillips

2016 MT 257

DA 16-0100

Montana

Montana Supreme Court

DA 16-0100 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 257 GABRIEL PEARSON, Plaintiff and Appellant, v. BERNICE MCPHILLIPS and JAMES RAULSTON, Defendants and Appellees. APPEAL FROM: District Court of the Ninth Judicial District, In and For the County of Toole, Cause No. DV-14-035 Honorable Robert G. Olson, Presiding Judge COUNSEL OF RECORD: For Appellant: Kirk D. Evenson, Marra, Evenson & Bell, P.C., Great Falls, Montana For Appellee: Joseph M. Sullivan, Sullivan Law, Great Falls, Montana Submitted on Briefs: August 24, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 16-0100 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Gabriel Pearson appeals an order of the Ninth Judicial District Court, Toole County, granting summary judgment to Bernice McPhillips and relieving her of liability for a fire James Raulston started while cutting scrap metal on McPhillips’ property. We address: 1. Whether the District Court erred in finding that McPhillips and Raulston were not engaged in a joint venture. 2. Whether the District Court erred in finding that using a cutting torch is not an inherently dangerous activity. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 In early 2012, Raulston started a scrap metal business, whereby he collected scrap metal from landowners in Toole County, Montana, and sold it. Raulston approached several landowners to discuss removing scrap metal from their property; some permitted him to do so and others did not. In February 2012, Raulston approached Scott O’Brien, McPhillips’ son-in-law, who helps McPhillips manage her property. Raulston asked O’Brien if he could remove scrap metal from McPhillips’ property and sell it. On behalf of McPhillips, O’Brien gave Raulston permission to remove the scrap metal, in addition to several “old junk vehicles” from McPhillips’ property that Raulston claimed were previously owned by one of his relatives. O’Brien agreed on the condition that Raulston give him thirty-five percent of the proceeds from the sale of the scrap metal. O’Brien provided Raulston with a map of the property and wrote the basic terms of the parties’ agreement on the map, including: “Jim Ra[u]lston in a white flatbed truck has permission to pick up scrap in the yellow areas only;” and “[t]he split for the scrap is 65% Jim 35% Scott on Gross Sales + Receipts provided.” (Emphasis in original.) Two areas on the map are highlighted in yellow. ¶4 According to his affidavit, Raulston chose the days and hours he worked; who, if anyone, worked with him; and the method and manner of removing the scrap metal. He did not seek McPhillips’ approval or permission for these actions. Raulston did not contract with O’Brien or McPhillips for any compensation other than sixty-five percent of the proceeds from the sale of the scrap metal. He used his own equipment and tools. Both Raulston and O’Brien testified via affidavit that they never considered Raulston to be an employee of McPhillips or O’Brien. Raulston operated in a similar manner with other landowners in the area who, according to their affidavits, understood Raulston “to be an independent business person agreeing . . . to perform work of removal of scrap” from their property. ¶5 In March 2012, Raulston was using a cutting torch to cut scrap metal on McPhillips’ property when an errant spark from the torch started a grass fire that he was unable to immediately contain. The fire spread, burning several structures and a variety of equipment on Pearson’s property. Pearson filed a complaint against both Raulston and McPhillips, alleging that Raulston was “acting as an agent, servant, or employee” of McPhillips when he started the fire. McPhillips filed a motion for summary judgment, contending that she should be dismissed from the case because Pearson was unable to show that McPhillips was vicariously liable for Raulston’s actions. The District Court agreed and granted summary judgment to McPhillips, holding that McPhillips was not vicariously liable for Raulston’s actions because: (1) McPhillips and Raulston did not enter into a joint venture; (2) Raulston was an independent contractor; and (3) Raulston’s use of a cutting torch on the scrap metal was not an inherently dangerous activity. Pearson appeals the District Court’s decision, contending that the agreement between Raulston and O’Brien created a joint venture and that Raulston’s use of a torch was an inherently dangerous activity. STANDARDS OF REVIEW ¶6 We review summary judgment orders de novo, applying the same criteria as the district court, set forth in M. R. Civ. P. 56. Rich v. Ellingson, 2007 MT 346, ¶ 12, 340 Mont. 285, 174 P.3d 491. Summary judgment is appropriate if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). The moving party has the initial burden of establishing these requirements. Rich, ¶ 12. Once the moving party has met this burden, “the opposing party must present substantial evidence essential to one or more elements of its case in order to raise a genuine issue of material fact.” Rich, ¶ 12. A district court’s interpretation of a contract is a matter of law, which we review for correctness. Eschenbacher v. Anderson, 2001 MT 206, ¶ 21, 306 Mont. 321, 34 P.3d 87. DISCUSSION ¶7 1. Whether the District Court erred in finding that McPhillips and Raulston were not engaged in a joint venture. ¶8 “A joint venture is an ‘association of two or more persons to carry on a single business enterprise for profit.’” Brookins v. Mote, 2012 MT 283, ¶ 43, 367 Mont. 193, 292 P.3d 347 (quoting Sunbird Aviation, Inc. v. Anderson, 200 Mont. 438, 444, 651 P.2d 622, 625 (1982)). To qualify as joint venturers, the parties must have: (1) an express or implied agreement or contract creating a joint venture; (2) a common purpose; (3) community of interest; and (4) an equal right to control the venture. Brookins, ¶ 43. Under the first element, the parties’ intent is crucial to determining whether a joint venture exists. See Rae v. Cameron, 112 Mont. 159, 168, 114 P.2d 1060, 1064 (1941) (“As between the parties themselves, the relationship of joint adventurers is a matter of intent, and arises only where they intend to associate themselves as such.”) (citation omitted). ¶9 We determine whether parties to an agreement intended to create a joint venture “in accordance with the ordinary rules governing the interpretation and construction of contracts.” Rae, 112 Mont. at 168, 114 P.2d at 1064 (citation omitted). “A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting . . . .” Section 28-3-301, MCA. When a contract is in writing, “the intention of the parties is to be ascertained from the writing alone if possible.” Section 28-3-303, MCA. However, “where intent cannot be directly ascertained, it must be established from all the facts, circumstances, actions, and conduct of the parties.” MacArthur Co. v. Stein, 282 Mont. 85, 90, 934 P.2d 214, 217 (1997) (citation omitted); accord Bender v. Bender, 144 Mont. 470, 480, 397 P.2d 957, 962 (1965) (holding that, to establish a joint venture or partnership, “[t]he intention of the parties has to be clearly manifested, and must be ascertained from all the facts and circumstances and the actions and conduct of the parties”) (citations omitted). ¶10 The District Court noted, and Pearson concedes on appeal, that Raulston and McPhillips did not expressly create a joint venture. The District Court thus considered the “facts, circumstances, actions, and conduct of the parties.” MacArthur Co., 282 Mont. at 90, 934 P.2d at 217. The Court found that, while McPhillips dictated where on her property Raulston could go, Raulston used his own equipment and chose the days and hours he worked; who, if anyone, worked with him; and the methods he used. The District Court also considered affidavits submitted by Raulston, O’Brien, and several other landowners who entered into similar agreements with Raulston, all of whom believed Raulston was an “independent business person” removing scrap metal from the landowners’ property in exchange for a portion of the proceeds. Based on these facts, and the lack of evidence to rebut them, the District Court found: “There is no evidence . . . suggesting intention on either the part of McPhillips or Raulston to create a joint venture.” ¶11 In his opening brief, Pearson states that “an agreement can be implied,” suggesting that the District Court erred in not finding an implied agreement to create a joint venture. Pearson cites no evidence and provides no argument that the parties in this case implicitly agreed to enter into a joint venture. In his opposition to McPhillips’ motion for summary judgment, Pearson argued that McPhillips and Raulston entered into a joint venture because: McPhillips obviously contributed the real property and the scrap metal to the joint venture and in exchange therefore, was to receive 35% of the proceeds from salvaging the metal. Specifically, McPhillips stated in her brief, “[t]o the contrary, Raulston came to Bernice McPhillips, via Scott O’Brien, and sought permission to remove scrap metal from her property in exchange for his payment to her of a fee.” (Emphasis in original.) By this logic, a customer who removes an item from a store after providing payment to the store is entering into a joint venture with the store-owner. The only difference between the store scenario and the parties’ agreement in this case is that Raulston’s payment for the items in question was derived via a percentage of the proceeds from the scrap metal. Notably, Pearson does not expressly contend that the parties’ shared profit in itself was sufficient to establish intent; nonetheless, we note that while profit sharing may be persuasive evidence of a joint venture, it does not conclusively establish one. See Antonick v. Jones, 236 Mont. 279, 287, 769 P.2d 1240, 1244 (1989) (“[E]ven if the parties were sharing profits, this is not conclusive evidence of a partnership relationship.”); Decker Coal Co. v. Commonwealth Edison Co., 220 Mont. 251, 253-54, 714 P.2d 155, 156 (1986) (“[U]nder Montana law a joint venture . . . is treated like a partnership.”) (citation omitted). ¶12 The parties do not dispute the material facts regarding their relationship. Although the Dissent cites our statement in Murphy v. Redland, 178 Mont. 296, 303, 583 P.2d 1049, 1053 (1978), that a joint venture is “a quasi-partnership in a single adventure undertaken for mutual gain,” Dissent, ¶ 21, we further stated in Murphy that each joint venturer must have “the right of control over the others and an equal right to a voice in performing the joint venture as well as in controlling the agencies used in its performance,” Murphy, 178 Mont. at 304, 583 P.2d at 1053. McPhillips dictated the areas of her property from which Raulston could collect scrap metal but had no control over the equipment he used, the days and hours he worked, or the methods he used. Thus, McPhillips did not have an equal right to a voice in controlling the agencies Raulston used in his performance. ¶13 We agree with the District Court that Pearson failed to present evidence to establish a genuine issue of material fact as to whether McPhillips and Raulston intended to enter into a joint venture. Given that intent is crucial to the determination of whether a joint venture exists, Rae, 112 Mont. at 168, 114 P.2d at 1064, McPhillips demonstrated entitlement to judgment as a matter of law on this issue. ¶14 2. Whether the District Court erred in finding that using a cutting torch is not an inherently dangerous activity. ¶15 As a general rule, a person who hires an independent contractor is not liable for the contractor’s torts.1 Beckman v. Butte-Silver Bow Cnty., 2000 MT 112, ¶ 12, 299 Mont. 389, 1 P.3d 348. However, an exception to this rule occurs when the independent contractor is engaged in an inherently dangerous activity. Beckman, ¶ 12. In such cases, the employer is vicariously liable for injuries to others caused by the contractor’s failure to take precautions to reduce the unreasonable risks associated with engaging in the inherently dangerous activity. See Beckman, ¶ 24. ¶16 Pearson contends that McPhillips is vicariously liable because Raulston engaged in an inherently dangerous activity when he used a torch to cut the scrap metal on a dry and windy day. In rejecting this argument, the District Court cited Woodward v. Metille, 1 The parties dispute Raulston’s status as an independent contractor; however, his status is irrelevant to our resolution of this issue because the undisputed facts do not support a conclusion that Raulston was engaged in an inherently dangerous activity. 81 Ill. App. 3d 168 (1980). In Woodward, as in this case, an independent contractor was using a cutting torch to remove scrap metal from another person’s property when he started a fire that spread to the plaintiffs’ property. The plaintiffs sought to impute the contractor’s negligence to the property owner, alleging that using a cutting torch on scrap metal is inherently dangerous. The Illinois Court of Appeals rejected this argument, holding: “The use of a cutting torch is an activity which, if carried on properly and by competent and careful operators, is not in itself inherently dangerous.” Woodward, 81 Ill. App. 3d at 176. In reaching this decision, the court noted that, when the danger and likelihood of injury do not inhere in the nature of the activity, “but rather in the manner of its particular use at the time and at the place of occurrence,” the activity is not inherently dangerous. Woodward, 81 Ill. App. 3d at 176. We used similar reasoning in Beckman. We compared the inherently dangerous activity of people working in trenches, “where a cave-in can cause death or serious bodily injury,” with “[m]uch of the activity that occurs on a construction site [which], although potentially dangerous, is quite safe when simple, easy to follow safety precautions are taken,” and thus not inherently dangerous. Beckman, ¶¶ 24-25. ¶17 Pearson contends that it is not simply Raulston’s use of a cutting torch itself, but his use of a cutting torch on a dry and windy day that made it inherently dangerous. Under Pearson’s argument, the manner of Raulston’s use of the torch at the time and place of occurrence is what made the activity inherently dangerous. This argument contradicts our reasoning in Beckman that an activity is not inherently dangerous if simple, easy-to-follow safety precautions may be taken. Pearson cites no evidence that the use of a cutting torch in and of itself, separate from the manner of use and place of occurrence, is inherently dangerous. Therefore, Pearson has not alleged facts to contradict McPhillips’ assertion and the District Court’s finding that Raulston’s use of a cutting torch was not inherently dangerous. CONCLUSION ¶18 We affirm the District Court’s decision and order. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ BETH BAKER Justice Patricia Cotter, dissenting. ¶19 I dissent from the Court’s Opinion. I would conclude that a joint venture was established as a matter of law, and reverse under Issue One. I would therefore not reach Issue Two. ¶20 In his affidavit, Scott O’Brien affirmatively states that “[o]n behalf of Mrs. McPhillips, I gave permission to Mr. Raulston to remove scrap metal in exchange for a percentage of the value recovered.” O’Brien drew a map for Raulston upon which he set forth those areas of the property from which scrap metal could be taken as well as the basic terms of the parties’ agreement. A bargain was struck whereby Raulston benefited by gaining access to the property to remove scrap metal for profit, and McPhillips benefited by having unwanted scrap metal removed from her property at no cost while receiving 35% of the proceeds from the sale of the scrap. It is difficult for me to comprehend under these facts how the Court can conclude as a matter of law that the parties did not intend to accomplish a joint venture. ¶21 As we stated in Murphy: “Broadly speaking, a joint adventure may be characterized as a quasi-partnership in a single adventure undertaken for mutual gain. The terms joint adventure and joint venture are synonymous.” Murphy, 178 Mont. at 303, 583 P.2d at 1053 (citing 48 C.J.S. Joint Adventurers § 1, p. 803). Rae, too, characterizes a joint adventure as being a single business enterprise “for which purpose they [the joint adventurers] combine their property, money, effects, skill, and knowledge.” Rae, 112 Mont. at 167, 114 P.2d at 1064. Further, the court observed that “[t]he contributions of the respective parties need not be equal or of the same character, but there must be some contribution by each coadventurer of something promotive of the enterprise.” Rae, 112 Mont. at 169, 114 P.2d at 1065. This is precisely what we have here: a single venture undertaken for mutual gain with each party contributing something promotive of the enterprise. I don’t know how we can characterize the parties’ one-time agreement entered for mutual gain as anything other than a joint venture under the foregoing cases. ¶22 The Court cites Murphy for the proposition that each joint venturer must have “‘the right of control over the others and an equal right to a voice in performing the joint venture, as well as in controlling the agencies used in its performance.’” Opinion, ¶ 12 (quoting Murphy, 178 Mont. at 304, 583 P.2d at 1053). The Court neglects to add this sentence that immediately follows the Court’s quoted Murphy excerpt: “However, one or more members of the joint adventure may entrust certain performances of the enterprise to one or more of the other members.” Murphy, 178 Mont. at 304, 583 P.2d at 1053 (citing 48 C.J.S. Joint Adventures § 5c, p. 828). The fact that McPhillips entrusted performance of the removal of the scrap to Raulston instead of dictating how the removal should be accomplished does not signify the lack of an equal voice in the performance of the enterprise; it simply establishes that—through O’Brien—she left the details to Raulston. ¶23 For the foregoing reasons, I would conclude that the undisputed material facts support the legal conclusion that the parties entered into a joint venture. I therefore dissent. /S/ PATRICIA COTTER

October 11, 2016

1c2ed64f-3bf5-46e9-936e-7dac87974fa5

State v. Colburn

2016 MT 246

DA 14-0491

Montana

Montana Supreme Court

DA 14-0491 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 246 STATE OF MONTANA, Plaintiff and Appellee, v. JAMES MORRIS COLBURN, Defendant and Appellant. APPEAL FROM: District Court of the Twenty-First Judicial District, In and For the County of Ravalli, Cause No. DC 13-198 Honorable James A. Haynes, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Natalie Wicklund, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana William Fulbright, Ravalli County Attorney, Hamilton, Montana Submitted on Briefs: August 17, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 14-0491 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Defendant James Morris Colburn (Colburn) was charged with four counts of Sexual Abuse of Children (referred to herein as “possession of child pornography”), and five counts of Attempted Sexual Abuse of Children (referred to herein as “attempted possession of child pornography”). After a jury trial, Colburn was convicted of two counts of attempted possession of child pornography. On appeal, he challenges his convictions and we affirm, addressing the following issue: Was there sufficient evidence to support Colburn’s convictions of attempted sexual abuse of children? PROCEDURAL AND FACTUAL BACKGROUND ¶2 In July of 2010, Colburn was a houseguest of his supervisor, at the youth center/video store where he volunteered, staying in her converted garage. His supervisor first became concerned when she noticed that, on the computer at the video store, someone had entered the term “preteen pussy” in an internet search engine. To investigate further, she asked Colburn via text message if she could use his personal computer in the converted garage. Colburn consented, and the supervisor discovered similar search terms on Colburn’s personal computer. She reported these details to the Stevensville Chief of Police, who applied for, obtained, and executed a search warrant of the garage, removing Colburn’s personal computer. ¶3 A forensic examiner for the State of Montana, Agent Jimmy Weg, examined Colburn’s personal computer and found eleven photographs that had been downloaded to the computer’s hard drive. The pictures depicted young-appearing females, some naked 3 and some in various stages of undress, in sexually provocative poses. Agent Weg testified at trial that these images had been downloaded to Colburn’s desktop computer on four separate occasions, based on the internal timestamp the computer had assigned to downloaded files. ¶4 Agent Weg also recovered the searching and browsing history from internet search engines, discovering five separate searches from Colburn’s computer that indicated, in his view, the user was seeking child pornography. On the respective dates of the charges, for which the jury found Colburn guilty of attempted possession of child pornography, Colburn had entered the search terms “preteen tube,” “preteen + tube + xxx,” “preteentube.com,” “preteen pussy,” and “preteen pussy stores.” ¶5 Trial on the nine charged counts proceeded in April 2014. The State called Colburn’s supervisor, the Stevensville Chief of Police, and Agent Weg as witnesses. Agent Weg testified that the computer files revealed that the first of the eleven recovered images was initially downloaded onto Colburn’s computer on January 23, 2010. Agent Weg further testified that search terms suggestive of child pornography were entered into internet search engines via Colburn’s computer, and child images were downloaded onto his computer’s hard drive, on alternating dates over the next six months. Agent Weg testified as an expert witness, stating that, based on his training and experience, the images recovered from Colburn’s computer constituted child pornography. One image featured a young-appearing female wearing a headband with the term “Club 17.” Agent Weg testified that “Club 17” is a reference to a pornography company based in the 4 Netherlands, and the company’s name serves to communicate that subjects used in the company’s images and videos are under the age of 17. He also testified that several of the search terms, such as “preteen tube,” were terms of art within child pornography culture that would be expected to obtain search results containing child pornography. ¶6 After the State rested its case-in-chief, Colburn moved as a matter of law for “a finding of not guilty with regard to all nine counts[,]” based in part on insufficiency of the evidence. The District Court denied the motion. The jury deadlocked on the counts of actual possession, entering “[u]ndecided/[h]ung” on the verdict form rather than selecting either “[g]uilty or [n]ot [g]uilty” for those charges. The jury acquitted Colburn of three of the counts of attempted possession of child pornography, and found him guilty on two of those counts. After the jury returned its verdict, the State moved to dismiss the four counts of actual possession of child pornography, and the District Court granted the motion. Colburn was sentenced in June 2014 on the two counts of attempted possession. He appeals. STANDARD OF REVIEW ¶7 “The standard of review for sufficiency of the evidence to support a jury verdict is ‘to determine whether, after viewing the evidence in light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.’” State v. Gardner, 2003 MT 338, ¶ 29, 318 Mont. 436, 80 P.3d 1262 (quoting State v. Bauer, 2002 MT 7, ¶ 15, 308 Mont. 99, 39 P.3d 689). “Whether sufficient evidence exists to convict a defendant is ultimately an analysis and 5 application of the law to the facts and, as such, is properly reviewed de novo.” State v. Gunderson, 2010 MT 166, ¶ 58, 357 Mont. 142, 237 P.3d 74 (citing State v. Swan, 2007 MT 126, ¶ 19, 337 Mont. 326, 160 P.3d 511). DISCUSSION ¶8 Was there sufficient evidence to support Colburn’s convictions of attempted sexual abuse of children? ¶9 Section 45-5-625(1)(e), MCA (2013), provides: “A person commits the offense of sexual abuse of children if the person . . . knowingly possesses any visual or print medium, including a medium by use of electronic communication in which a child is engaged in sexual conduct, actual or simulated.” The statute defines “[s]exual conduct” as: (i) (F) lewd exhibition of the genitals, breasts, pubic or rectal area, or other intimate parts of any person; or . . . (ii) depiction of a child in the nude or in a state of partial undress with the purpose to abuse, humiliate, harass, or degrade the child or to arouse or gratify the person’s own sexual response or desire or the sexual response or desire of any person. Section 45-5-625(5)(b)(i)(F), (ii), MCA (2013). ¶10 Section 45-4-103(1), MCA, addresses the inchoate offense of attempt: “A person commits the offense of attempt when, with the purpose to commit a specific offense, the person does any act toward the commission of the offense.” ¶11 We have stated that “not all acts towards the commission of a crime are sufficient [to qualify as an attempt]. There must be an ‘overt act’ that reaches ‘far enough towards the accomplishment of the desired result to amount to the commencement of the 6 consummation.’” Gunderson, ¶ 59 (quoting State v. Mahoney, 264 Mont. 89, 97, 870 P.2d 65, 70 (1994); State v. Ribera, 183 Mont. 1, 11, 597 P.2d 1164, 1170 (1979)). We have also stated that “‘there must be at least some appreciable fragment of the crime committed, and it must be in such progress that it will be consummated unless interrupted by circumstances independent of the will of the attempter.’” Mahoney, 264 Mont. at 97, 870 P.2d at 70 (quoting Ribera, 183 Mont at 11, 597 P.2d at 1170; State v. Rains, 53 Mont. 424, 426, 164 P. 540, 541, (1917)). These principles were included in the instructions given to the jury by the District Court. ¶12 Colburn argues that the State failed to meet its evidentiary burden at trial to prove beyond a reasonable doubt that an appreciable fragment of the crime was, to paraphrase Mahoney, “in such progress” that Mr. Colburn would have knowingly possessed child pornography unless “interrupted by circumstances independent” of his own will. Colburn’s argument focuses only on the evidence of the search terms, which he argues is insufficient because “it only shows the fact that Mr. Colburn entered words.” ¶13 At trial, the State produced evidence that eleven images of youthful appearing females in sexually provocative poses had been downloaded onto Colburn’s computer. The State provided expert forensic testimony that these images were child pornography. One of the images contained a reference to “Club 17,” a known pornography producer that advertises the subjects in its images are no more than 17 years old. Even though the jury did not convict Colburn of actual possession based upon these images, the evidence was nonetheless properly before the jury, which could consider and make proper 7 inferences from the images. See State v. Meredith, 2010 MT 27, ¶ 45, 355 Mont. 148, 226 P.3d 571 (“Montana law clearly permits a jury to draw inferences from circumstantial evidence presented at trial.”) (internal citations omitted). ¶14 The State also produced evidence of various search terms entered on Colburn’s computer, such as “preteen tube” and “preteen pussy.”1 Agent Weg testified that, “a person who would search for preteen tube, from what I’ve seen, invariably is looking to find child pornography.” During cross-examination, Colburn’s defense counsel challenged Agent Weg about the significance of these search terms, which Agent Weg resisted: Q. And so it follows, doesn’t it, that those search terms used by an unsophisticated computer user could actually be used to find lawful adult pornography? A. I haven’t seen that. And that takes into consideration what else I find on a computer. I would say, absent finding any child pornography, that would be the case. Agent Weg explained that Colburn’s search terms suggested he was seeking images or videos of underage subjects, and explained that the purpose behind those search terms was corroborated by the multiple images of youthful-appearing females in sexual poses actually found on Colburn’s computer, which had been downloaded after multiple searches. ¶15 While it is correct the State introduced no direct evidence that Colburn had accessed or downloaded child pornography on the same dates as he entered the search 1 The jury necessarily accepted the State’s position that Colburn had entered the search terms and downloaded the images onto his computer, a finding that Colburn does not challenge on appeal. 8 terms, it is not correct that the State’s case demonstrated merely that “Colburn entered words.” The particular “words” used by Colburn as search terms included terms of art within child pornography culture. Further, the State established that Colburn was actually successful in accessing and downloading images of provocative youthful subjects on other dates, some of which were interspersed among the dates on which the charges were based. Taken as a whole, sufficient evidence was presented for the jury to determine that Colburn had not just entered “mere words” into his internet search engine. ¶16 The State argues that “[t]he proper focus here is on all of the affirmative acts Colburn took towards completion of [possession of child pornography], not whether his plan was ultimately successful on the search dates in question.” Considering the evidence as a whole, we agree that Colburn committed an overt act “far enough towards the accomplishment of the desired result to amount to the commencement of the consummation.” Gunderson, ¶ 59. The evidence allowed the jury to permissibly find Colburn had committed an overt act “far enough towards the accomplishment” of possessing child pornography that the crime would be consummated. Mahoney, 264 Mont. at 97, 870 P.2d at 70; Gunderson, ¶ 59.2 2 Colburn relies on State v. Fuller, 266 Mont. 420, 880 P.2d 1340 (1994), where we reversed the defendant’s conviction on three counts of sexual assault on grounds of insufficient evidence. There, the defendant made sexually provocative comments and gestures to three young girls, which Colburn argues bears “marked similarity” to his actions here. However, the Fuller case was tried before a judge, who stated, in contradiction to the ultimate guilty verdicts, that “the evidence does not show beyond a reasonable doubt that the defendant actually intended to touch the victims.” Fuller, 266 Mont. at 423, 880 P.2d at 1342. We reversed based upon this single finding, and not upon the sufficiency of the evidence, as a whole, to support the verdict. Fuller, 266 Mont. at 423, 880 P.2d at 1343. The posture of Fuller is anomalous to the usual sufficiency of the evidence inquiry. 9 ¶17 Colburn offers as an issue of law that evidence of “a second, dispositive step” on his part “showing an attempt to access illegal content” was necessary for conviction, arguing that, “[w]ithout a second step to indicate what content was actually sought, those words remain plain speech – merely words.” However, the law has never required a distinct “second step” in order for an “appreciable fragment of the crime” to be completed for purposes of attempt. Mahoney, 264 Mont. at 97, 870 P.2d at 70. The statute provides the crime of attempt can be based upon “any act” toward the commission of the offense. Section 45-4-103(1), MCA. As discussed above, the jury was presented with sufficient evidence to permit it to find the commission of an “overt act” that went far enough to the accomplishment of obtaining child pornography to satisfy the statute, and thus support the conviction. Gunderson, ¶ 59. ¶18 Affirmed.3 /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT 3 In his reply brief, Colburn makes a brief constitutional argument regarding content-based bans on speech, claiming the State is unilaterally prohibiting speech, such as his search terms. This issue was neither presented at, nor ruled on at the District Court, and we decline to address it for the first time on appeal. See In re A.N.W., 2006 MT 42, ¶ 41, 331 Mont. 208, 130 P.3d 619 (“This Court does not consider an issue presented for the first time on appeal.”). 10 Justice Laurie McKinnon, dissenting. ¶19 The issue presented in this appeal is whether the State produced sufficient evidence of an overt act indicating that Colburn, absent an intervening circumstance independent of Colburn’s will, would have consummated the crime of possession of child pornography. The only evidence of an overt act produced in support of counts six and nine, attempted possession of child pornography on the specific dates of May 30, 2010, and July 17, 2010, was that Colburn entered words into the search field of an Internet search engine. An expert witness indicated these were search terms that could lead to child pornography cites. While this, together with other circumstantial evidence, may be enough for a jury to find Colburn harbored the requisite criminal mens rea to commit the offense, it is insufficient proof for a “rational trier of fact [to find] the elements of the offense beyond a reasonable doubt.” State v. Fuller, 266 Mont. 420, 422, 880 P.2d 1340 (1994). As in Fuller, reviewing an attempt conviction presents an issue “relating to the fundamental principle subsumed in this standard: that the prosecution must establish each and every element of the charged offense by proof beyond a reasonable doubt.” Fuller, 266 Mont. at 422 (citing Jackson v. Virginia, 443 U.S. 307, 316, 99 S. Ct. 2781 (1979)). ¶20 Montana’s attempt statute provides: “[a] person commits the offense of attempt when, with the purpose to commit a specific offense, the person does any act toward the commission of the offense.” Section 45-4-103(1), MCA. The criminal offense of possessing child pornography occurs when a person “knowingly possesses any visual or print medium . . . in which a child is engaged in sexual conduct, actual or simulated.” Section 45–5–625(1)(e), MCA. The elements of the offense thus clearly provide that the state must prove beyond a reasonable doubt that (1) the person acted knowingly; (2) the person possessed the image; (3) the image was that of a child; and (4) the image involved the child in sexual conduct, actual or simulated. The State may 11 not be relieved of its burden of proving each and every element of the offense merely by charging an attempt to commit the crime. The State must prove that the image Colburn would have possessed on May 30, 2010, and July 17, 2010, was that of a child involved in sexual conduct. ¶21 An overt act is not simply an affirmative act or an act in preparation; it is an act towards consummation of the offense: This Court has stated that an overt act ‘must reach far enough towards the accomplishment of the desired result to amount to the commencement of the consummation.’ In addition, the Court stated that ‘there must be at least some appreciable fragment of the crime committed, and it must be in such progress that it will be consummated unless interrupted by circumstances independent of the will of the attempter.’ State v. Ribera, 183 Mont. 1, 11, 597 P.2d 1164, 1170 (1979) (citing State v. Rains, 53 Mont. 424, 164 P. 540 (1917)); see also State v. Mahoney, 264 Mont. 89, 97, 870 P.2d 65 (1994). This requirement in the law exists in order to ensure that the State, by charging only an attempt, is not relieved of its burden of proving each element of the offense. A criminal penalty may be based only upon the defendant’s actions which, absent an interruption independent of the defendant, would have resulted in the commission of an offense. ¶22 Here, the State failed to prove that Colburn completed an appreciable fragment of the crime or that the crime would have been completed had an intervening circumstance not occurred beyond Colburn’s control. Importantly, the jury was unable to decide whether images downloaded by Colburn on other dates constituted child pornography and, as a result, the State dismissed counts one through four. Of the remaining five attempt charges, the jury found the State had not proven three of the counts. While evidence offered in support of these other counts may be circumstantial evidence of Colburn’s intent on the two counts for which he was convicted, the State is not relieved of its burden of proving the remaining elements of the offense 12 for the specific dates charged on May 30 and July 17. There was no evidence presented of what the image would have been—that the image would have been that of a child—or that the child would have been engaged in sexual conduct. At most, there was only speculation, based on the evidence presented on other counts found insufficient by the jury, that Colburn would have eventually possessed a pornographic image of a child on the dates charged. ¶23 As much as we dislike child pornography and want to protect children, it is impermissible to impose a criminal penalty on the basis of an act which is only speculative as to the offense that would have been committed. I dissent from the Court’s conclusion that there was sufficient evidence of an overt act by Colburn upon which the jury could find an attempt to possess child pornography. /S/ LAURIE McKINNON Justice Patricia Cotter joins in the foregoing dissent. /S/ PATRICIA COTTER

October 4, 2016

0dedfa57-8ace-4cab-b5f8-16d814c433ab

Schweitzer v. City of Whitefish

2016 MT 254

DA 16-0018

Montana

Montana Supreme Court

DA 16-0018 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 254 T. WARREN SCHWEITZER and INGELA SCHNITTGER, Plaintiffs and Appellants, v. CITY OF WHITEFISH, Defendant and Appellee. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 14-1117 Honorable Robert B. Allison, Presiding Judge COUNSEL OF RECORD: For Appellants: Sharon M. Morrison, Morrison & Frampton, PLLP, Whitefish, Montana For Appellee: Tammy Wyatt-Shaw, Marcel A. Quinn, Hammer, Quinn & Shaw PLLC, Kalispell, Montana Submitted on Briefs: August 31, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 16-0018 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 T. Warren Schweitzer and Ingela Schnittger (Appellants) appeal the order of the Eleventh Judicial District Court, Flathead County, granting the City of Whitefish’s (City) cross-motion for summary judgment. We restate the issue on appeal as follows: Did the District Court err by granting summary judgment on the basis of claim preclusion? ¶2 We affirm. FACTUAL AND PROCEDURAL BACKGROUND ¶3 Appellants own Lots 28 and 29 of the Houston Lake Shore Tracts located, at 2154 Houston Drive, in Whitefish. This property is adjacent to Whitefish Lake, which the City has annexed. Appellants have owned this property for several years. ¶4 In 2005, Appellants decided to tear down their home and build a new house on the property. The building plans called for replacing the existing septic tank and leach field. Contractors and architects on the project advised Appellants they could hook up to the City’s water and sewer services if the property was annexed into the City. Consequently, Appellants petitioned the City for annexation of their property, and their petition was granted, in November 2005. Later, Appellants learned they would be required to pay for the extension of water and sewer lines to the property. Finding the cost to be prohibitive, Appellants abandoned this option. ¶5 In 2010, Appellants petitioned to have their property de-annexed, citing their nonuse of city services and the higher property taxes in the City. Their petition was denied by the City Council, and they commenced a declaratory action in the District 3 Court, challenging the decision. The Appellants did not serve their complaint within three years as required by M. R. Civ. P. 4. The District Court dismissed the 2010 complaint on the basis of lack of service under Rule 4 and on the ground the statute of limitations for Appellants’ claims, set forth in § 27-2-209(5), MCA, would bar any re-filed action. The dismissal was entered in August 2014, with prejudice, and was not appealed. ¶6 A month later, Appellants filed another petition with the City for de-annexation of their property, citing: 1) their nonuse of city services; 2) the higher taxes in the City; 3) the purported lack of contiguous city property; and 4) the termination of an interlocal agreement between the City and Flathead County. In 2005, the City and County had entered an interlocal agreement regarding City planning and zoning authority over land near Whitefish Lake where the Appellants’ and their neighbors’ properties were located. See Phillips v. City of Whitefish, 2014 MT 186, ¶¶ 8-12, 375 Mont. 456, 330 P.3d 442. Flathead County passed a resolution to withdraw from the agreement in 2008, leading to negotiation of a new agreement in 2010. Phillips, ¶¶ 10-11. Litigation ultimately ensued, resulting in termination of the agreement and the loss of city planning and zoning jurisdiction over the area not within the City. The City’s jurisdiction over the Appellants’ property did not change because it had been annexed by the City. ¶7 The City Council denied Appellants’ second petition for de-annexation, noting Appellants’ property was within an area that was the City’s “first priority for annexation” 4 and finding it would be in the City’s best interests to deny the request.1 Appellants then filed another declaratory action in the District Court challenging the denial of their second petition, and served their complaint upon the City, who raised claim preclusion as a defense. The District Court held the Appellants’ action was barred by claim preclusion and entered summary judgment, reasoning: The relevant facts in the first lawsuit are the same as those in this lawsuit. The issue continues to be whether the City Council proceeded contrary to [§] 7-2-4805, MCA. The substantive facts remain the same even though Plaintiffs pled the legal claims slightly differently. Reframing issues or raising novel contentions does not avoid res judicata preclusion. The facts must differ substantially. [(Internal citations omitted).] ¶8 Appellants appeal. STANDARD OF REVIEW ¶9 We conduct a de novo review of summary judgment orders and conduct the same analysis as does a district court under Rule 56, M. R. Civ. P. Lorang v. Fortis Ins. Co., 2008 MT 252, ¶ 36, 345 Mont. 12, 192 P.3d 186. Summary judgment is granted when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56; Lorang, ¶ 37. “A material fact is a fact that involves the elements of the cause of action or defense at issue to an extent that necessitates resolution of the issue by a trier of fact.” Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200. “The party moving for summary judgment has the initial burden of establishing both the absence of genuine issues of material fact and entitlement to judgment as a matter of law.” Roe, ¶ 14. If the moving party has met its burden then the 1 The City has acted to annex the Houston Lake Shore Tracts area, where Appellants’ property is located, and a legal challenge to that annexation action is pending before the courts. 5 burden shifts to the non-moving party and “the non-moving party must set forth specific facts” to establish the existence of a genuine issue of material fact. Thomas v. Hale, 246 Mont. 64, 67, 802 P.2d 1255, 1257 (1990) (emphasis in original); Roe, ¶ 14. The non-moving party “cannot simply rely upon . . . [its] pleadings, nor upon speculative, fanciful, or conclusory statements” to establish a genuine issue of material fact. Thomas, 246 Mont. at 67, 802 P.2d at 1257. If no genuine issue of material fact exists, then we, like a district court, determine if the moving party is entitled to judgment as a matter of law. Roe, ¶ 14. ¶10 A district court’s application of the “doctrine of res judicata [or claim preclusion] is a question of law.” Thornton v. Alpine Home Ctr., 2001 MT 310, ¶ 10, 307 Mont. 529, 38 P.3d 855. We review this question of law de novo and examine a district court’s interpretation and application of the doctrine as it has been established by this Court. We examine a district court’s application of claim preclusion for correctness. Brilz v. Metro Gen. Ins. Co., 2012 MT 184, ¶ 13, 366 Mont. 78, 285 P.3d 494. DISCUSSION ¶11 Did the District Court err by granting summary judgment on the basis of claim preclusion? ¶12 Claim preclusion provides finality and “embodies ‘a judicial policy that favors a definite end to litigation.’” Asarco LLC v. Atl. Richfield Co., 2016 MT 90, ¶ 15, 383 Mont. 174, 369 P.3d 1019 (quoting Baltrusch v. Baltrusch, 2006 MT 51, ¶ 15, 331 Mont. 281, 130 P.3d 1267). Historically, we have analyzed claim preclusion under a four-part test requiring: 1) the parties or their privies are the same; 2) the subject matter of the 6 present and past actions is the same; 3) the issues are the same and relate to the same subject matter; and 4) the capacities of the persons are the same in reference to the subject matter and to the issues between them. Brilz, ¶ 22; Berlin v. Boedecker, 268 Mont. 444, 451, 887 P.2d 1180, 1185 (1994); Brannon v. Lewis & Clark Cnty., 143 Mont. 200, 207-08, 387 P.2d 706, 711 (1963); State ex rel. Sullivan v. School Dist., 100 Mont. 468, 472, 50 P.2d 252, 253 (1935). The third element contains a nuance—that preclusion extends to an issue that could have been raised, and the parties had an opportunity to litigate, in the first action. See Fisher v. State Farm Gen. Ins. Co., 1999 MT 308, ¶ 10, 297 Mont. 201, 991 P.2d 452; First Bank v. Dist. Ct. for Fourth Judicial Dist., 226 Mont. 515, 737 P.2d 1132 (1987). ¶13 Implicitly, this test also requires the first action end with a final judgment on the merits. Meagher Cnty. Newlan Creek Water Dist. v. Walter, 169 Mont. 358, 361, 547 P.2d 850, 852 (1976) (“The doctrine of res judicata states that a final judgment on the merits by a court of competent jurisdiction is conclusive as to causes of action or issues thereby litigated.”); Sullivan 100 Mont. at 473, 50 P.2d at 253 (“[T]he judgment there rendered on the merits is binding between the same parties or their privies as to all matters there decided.”). See also Touris v. Flathead Cnty., 2011 MT 165, ¶ 15, 361 Mont. 172, 258 P.3d 1 (dismissal of an action with prejudice “was a final judgment on the merits for purposes of res judicata.”); Hawkes v. Mont. State Dep’t of Corr., 2008 MT 446, ¶ 19, 348 Mont. 7, 199 P.3d 260 (“An order of dismissal with prejudice is a final judgment on the merits.”); Phoenix Mut. Life Ins. Co. v. Brainard, 82 Mont. 39, 44, 265 P. 10, 12 (1928) (res judicata applies when “the same point was in issue upon the former 7 trial.”). In Brilz, we stated the requirement of a final judgment on the merits as a fifth element of the test. Brilz, ¶ 22 (“and (5) a valid final judgment has been entered on the merits in the first action by a court of competent jurisdiction.”). ¶14 Neither party contests the satisfaction of elements one and four. The parties agree they are the same litigants, and their capacities are the same in reference to the subject matter and the issues between them. We have no reason to disagree. We also concur with the District Court’s conclusion that the “dismissal of the earlier action . . . with prejudice on the basis of the running of the statute of limitations was a judgment.” As noted above, “[a]n order of dismissal with prejudice is a final judgment on the merits.” Hawkes, ¶ 19. Therefore, the fifth element is satisfied. ¶15 Under the second element (same subject matter), Appellants argue their 2010 complaint sought a declaration that the annexation was void because the City failed to furnish water and sewer services, and that § 76-3-510, MCA, which assesses costs for the extension of local services, applies only to subdividers, not to private individuals. Appellants contend their 2014 complaint not only challenged the City’s failure to provide water and sewer services, but also arose from a change in the zoning jurisdiction over the surrounding properties. The City responds that both claims arose from the denial of Appellants’ de-annexation petitions, which is the key fact. ¶16 We have explained the subject matter element is focused on the underlying factual basis and whether the two cases arose from the same set of material facts. Touris, ¶ 17; State ex rel. Harlem Irrigation Dist. v. Mont. Seventeenth Judicial Dist. Ct., 271 Mont. 129, 133-34, 894 P.2d 943, 945 (1995). Harlem Irrigation is illustrative. There, the 8 plaintiffs filed an action against the irrigation district alleging damages caused by the district’s termination of their water supply. Harlem Irrigation, 271 Mont. at 130-131; 894 P.2d. at 943. After dismissal of that action, the plaintiffs filed another action against the district alleging wrongful denial of water on later occasions over a period of years. Harlem Irrigation, 271 Mont. at 131; 894 P.2d at 944. Despite the differing occasions, we found the subject matter element was satisfied because the claims boiled down to the same key fact, which we described as “the District’s failure to provide water.” Harlem Irrigation, 271 Mont. at 134; 894 P.2d at 945. Similarly, in the action before us, both cases arose from the City’s denial of the Appellants’ petitions for exclusion. Both of the Appellants’ declaratory complaints have the same basic factual underpinnings: 1) the Appellants’ voluntary petition for annexation; 2) the City’s annexation of the property; 3) the Appellants’ decision not to pay for the extension of services to their property; 4) the Appellants’ petition for exclusion; and 5) the City’s denial of the petition. We conclude the subject matter element is satisfied because the same substantial facts underlie both proceedings initiated by the Appellants. ¶17 Under the third element, the issue must likewise be the same and be related to the same subject matter. We begin with Appellants’ de-annexation requests. Appellants’ 2010 and 2014 petitions to the City listed similar issues and reasons for their requests, including: 1) an objection to the cost of extending water and sewer lines to the property; 2) a complaint about a change in property value; 3) the level of the City’s taxes; and 4) a statement that Appellants had not received any city services in exchange for taxes they had paid. Likewise, Appellants’ 2010 and 2014 declaratory complaints were also similar. 9 The primary claim in the 2010 complaint sought declaratory judgment and was titled: “DECLARATORY JUDGMENT THAT CITY’S REJECTION OF PLAINTIFFS’ PETITION FOR DE-ANNEXATION IS VOID FOR FAILURE TO CONFORM TO STATUTORY REQUISITES.” The primary claim in the 2014 complaint sought declaratory judgment and was titled: “DECLARATORY JUDGMENT THAT PLAINTIFFS’ PETITION FOR EXCLUSION MET THE STATUTORY REQUISITES OF § 7-2-4805, MCA, TO SUPPORT A RESOLUTION OF INTENT TO EXCLUDE LAND.” The gravamen of both complaints was that the City failed to follow the requirements of § 7-2-4805, MCA, which governs the process of excluding land from a municipality. Additional claims in each of the two declaratory complaints were directly premised on this initial claim. ¶18 Appellants’ second de-annexation petition and second declaratory complaint also raised the issue of the termination of the interlocal agreement between the City and Flathead County. Appellants argue this new issue demonstrates the third element is lacking, and that claim preclusion cannot occur. Under the interlocal agreement, the area surrounding the Appellants’ annexed property was likewise placed under the City’s zoning authority. Appellants assert that, after the interlocal agreement was terminated, their property became “an island” of City property, surrounded by land under Flathead County jurisdiction.2 However, we conclude this was not a material fact for purposes of 2 The City contests this factual issue, and notes that the City Council’s Resolution denying the second de-annexation petition stated that Appellants’ lots “are currently within the corporate limits, not on the border and wholly surrounded by the City of Whitefish.” However, for purposes of summary judgment review, we accept Appellants’ factual assertion. 10 either issue similarity or summary judgment. Since 2005, when Appellants’ property was annexed, the jurisdiction of the City over their property has not changed. On each occasion when Appellants sought de-annexation, the City expressed its continuing objective to annex the area in which Appellants’ property was located, describing the area as its “first priority for annexation” in response to the second petition, and noting that granting Appellants’ request would be contrary to the City’s goals.3 While termination of the interlocal agreement may have given Appellants another argument to make in support of their petition, it did not materially alter the issue before the District Court, which was the same issue raised in the first action: that the City had failed to comply with § 7-2- 4805, MCA. ¶19 We conclude the issues presented in both cases were the same and related to the same subject matter. All elements of our claim preclusion test are thus satisfied, barring Appellants’ claim. Summary judgment was appropriately entered by the District Court, and we affirm. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA 3 The City Manager stated, in response to the first petition, “[w]e should try to annex more properties in this vicinity and other areas of Whitefish rather than exclude these properties already inside city limits.”

October 11, 2016

d22291bc-b167-4813-b4f6-01e111e0ca8a

State v. Sayler

2016 MT 226

DA 14-0553

Montana

Montana Supreme Court

DA 14-0553 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 226 STATE OF MONTANA, Plaintiff and Appellee, v. WILLIAM ALAN SAYLER, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-13-526 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad W. Wright, Chief Appellate Defender, Chad R. Vanisko, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Pamela P. Collins, Assistant Attorney General, Helena, Montana Kirsten H. Pabst, Missoula County Attorney, Jordan Kilby, Deputy County Attorney, Missoula, Montana Submitted on Briefs: August 10, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 14-0553 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 William Alan Sayler (“Sayler”) appeals from his March 12, 2014 conviction by a jury of the offense of Partner or Family Member Assault, Third or Subsequent Offense, § 45-5-206, MCA, in the Fourth Judicial District Court, Missoula County. We affirm. ¶2 We restate the issues on appeal as follows: Issue One: Did the District Court abuse its discretion when it admitted evidence of Sayler’s other crimes or acts under the transaction rule, § 26-1-103, MCA? Issue Two: Did the District Court abuse its discretion when it allowed the State to ask leading questions of Fawna Rainforth? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On October 18, 2013, the State charged Sayler with two counts of Partner or Family Member Assault, Third or Subsequent Offense, both felonies. These charges arise from allegations that on or about September 25, 2013, and on or about September 30, 2013, Sayler purposely or knowingly caused bodily injury to Fawna Rainforth (“Fawna”), a partner or family member. The State alleges that during an altercation between Fawna and Sayler, Sayler yelled at Fawna, pushed her down repeatedly, grabbed her throat so tightly she could not breathe, and took her car. ¶4 Fawna is a disabled adult who had a sexual and dating relationship with Sayler. In September 2013, Fawna allowed Sayler to stay at her home and use her car. On September 30, 2013, Fawna and Sayler fought and yelled after she asked him to stop using her car and to give her the keys. Sayler refused to give Fawna the keys and pushed her down, where she fell over some boxes. Fawna got up and again asked for the keys 3 and Sayler pushed Fawna down again. As she got up and asked for her keys a third time, Sayler grabbed her by the throat with his hands so tightly that she could not talk or breathe. Fawna had bruising on her chin, chest and arm as well as a cut on her hand. After the assault, Sayler took Fawna’s car. ¶5 Fawna’s friend and neighbor noticed Fawna’s bruising and reported it to the police. During the police interview Fawna also informed the officer that on or about September 25, 2013, Sayler assaulted her by hitting her twice which resulted in some of her bruises. ¶6 When interviewed by the officer, Sayler stated that on September 30, 2013, Fawna had been upset and had taken his cell phone; when he asked for it back she came at him, grabbing his arm. Sayler admitted to pushing Fawna in self-defense, which caused her to fall over a set of boxes. Sayler asserted Fawna gave him permission to take her car after the incident. Sayler was charged with two counts of partner or family member assault and arraigned on October 29, 2013. ¶7 Prior to trial, Sayler filed a Motion in Limine to exclude his criminal history, including all convictions and all charges excluding the present one; allegations of uncharged criminal or bad acts by Sayler; any other ‘prior bad acts’ evidence not specifically identified but intended to be introduced by the State; and any evidence not produced in discovery. Sayler argued the evidence of him yelling at Fawna and taking her car was evidence of prior bad acts and therefore barred by M. R. Evid. 404(b). Further, Sayler argued the probative value of the evidence was substantially outweighed by the risk of unfair prejudice to him. M. R. Evid. 403. The State argued it was 4 admissible transaction evidence necessary to understand the nature of the parties’ relationship and was inextricably linked to the charged offense. Section 26-1-103, MCA. ¶8 On March 10, 2014, the District Court concluded Sayler’s criminal history would be excluded unless he opened the door to warrant admission as rebuttal evidence. However, under M. R. Evid. 404(b) and the related § 26-1-103, MCA (transaction rule), the District Court also held the State could introduce evidence of other or prior bad acts, specifically that Sayler was yelling at Fawna during either assault and that after one of the assaults he took Fawna’s car. The District Court concluded these acts were evidence of motive and intent; thus, they were admissible under M. R. Evid. 404(b) relevant to Sayler’s justifiable use of force defense and admissible under § 26-1-103, MCA, as transaction evidence. ¶9 At trial, Sayler’s defense counsel objected to the State’s direct questioning of Fawna, asserting the State was leading Fawna regarding how she received bruising on her chin. The District Court overruled the objection indicating that “under the circumstances, I’m going to permit some mild leading in this case.” ¶10 Sayler’s jury trial took place on March 12, 2014, and he was found guilty on count one for conduct occurring on September 30, 2013, and not guilty on count two for conduct occurring on September 25, 2013. STANDARD OF REVIEW ¶11 “A district court has broad discretion when determining the relevance and admissibility of evidence,” and this Court reviews district court evidentiary rulings for an abuse of discretion. State v. Given, 2015 MT 273, ¶ 23, 381 Mont. 115, 359 P.3d 90. A 5 district court “abuses its discretion if it acts arbitrarily or unreasonably, and a substantial injustice results.” City of Kalispell v. Miller, 2010 MT 62, ¶ 9, 355 Mont. 379, 230 P.3d 792. Where the district court’s ruling is based on an interpretation of an evidentiary rule or statute, this Court reviews the ruling de novo. See State v. Lamarr, 2014 MT 222, ¶ 10, 376 Mont. 232, 332 P.3d 258. DISCUSSION ¶12 Issue One: Did the District Court abuse its discretion when it admitted evidence of Sayler’s other crimes or acts under the transaction rule, § 26-1-103, MCA? ¶13 Sayler contends the District Court abused its discretion when it admitted evidence that he yelled at Fawna and took her car after the September 30, 2013 altercation. Generally, “all relevant evidence is admissible” unless otherwise provided by law. M. R. Evid. 402. Section 26-1-103, MCA, provides “where the declaration, act, or omission forms part of a transaction which is itself the fact in dispute or evidence of that fact, such declaration, act, or omission is evidence as part of the transaction.” ¶14 This court has held that § 26-1-103, MCA, allows transaction evidence when acts are inextricably linked and explanatory of the charges. State v. Guill, 2010 MT 69, ¶ 36, 355 Mont. 490, 228 P.3d 1152; see also State v. Bauer, 2002 MT 7, ¶ 22, 308 Mont. 99, 39 P.3d 689 (“It is well established that evidence which tends to explain circumstances surrounding the charged offense is relevant, probative and competent.”). This Court determined that the transaction rule “is most legitimately used to admit uncharged misconduct when such conduct arises from a continuing series of events.” Guill, ¶ 45. Moreover, this Court has been careful in limiting the transaction rule’s application and 6 subjecting it to fact-specific balancing under M. R. Evid. 403. See Lamarr, ¶ 14. M. R. Evid. 403 allows the court to exclude otherwise admissible and relevant evidence when its prejudicial effect substantially outweighs its probative value. Lamarr, ¶ 14 (citing State v. Hardman, 2012 MT 70, ¶ 16, 364 Mont. 361, 276 P.3d 839). It is within the trial court’s discretion to decide whether the danger of unfair prejudice substantially outweighs the probative value of the evidence. State v. Hicks, 2013 MT 50, ¶ 24, 369 Mont. 165, 296 P.3d 1149. ¶15 In this case, the facts that Sayler was yelling at Fawna and took her car after the altercation are inextricably linked to and explanatory of the facts regarding the nature and power dynamic of the relationship. Guill, ¶ 36. Moreover, the altercation which resulted in the charges, and taking the car were all part of a “continuing series of events,” which explained the circumstances of the charges. Guill, ¶ 45. The District Court properly admitted evidence that Sayler yelled and then took Fawna’s car under the Montana transaction rule. ¶16 Sayler failed to follow the proper procedure for precluding evidence. State v. Eighteenth Jud. Dist., 2010 MT 263, ¶ 49, 358 Mont. 325, 246 P.3d 415. However, the District Court analyzed this evidence and determined it was relevant to Sayler’s justifiable use of force claim and the probative value did not substantially outweigh the danger of unfair prejudice. The District Court did not abuse its discretion when it found that the probative value of the evidence was not substantially outweighed by the danger of unfair prejudice. 7 ¶17 Issue Two: Did the District Court abuse its discretion when it allowed the State to ask leading questions of Fawna Rainforth? ¶18 Sayler contends the District Court abused its discretion when it allowed the State to ask leading questions of Fawna on direct examination. “Leading questions should not be used on the direct examination of a witness except as may be necessary to develop the witness’ testimony.” M. R. Evid. 611(c); State v. Eiler, 234 Mont. 38, 45, 762 P.2d 210, 215 (1988). The well-established exception to using leading questions is within M. R. Evid. 611(c). This exception recognizes the use of leading questions on direct examination with a “child witness or an adult with communication problems.” Commissions Comments to M. R. Evid. 611, (quoting Advisory Committee’s Note to Federal Rule 611(c), 56 F.R.D. 183, 275 (1972), citing 3 Wingmore on Evidence, §§ 774-78 (Chadbourn Rev. 1970)). Most importantly, “leading questions may be asked if necessary to develop testimony . . . and whether or not they will be allowed is a matter for the trial court’s discretion.” Bailey v. Bailey, 184 Mont. 418, 421, 603 P.2d 259, 261 (1979); see also State v. Spotted Hawk, 22 Mont. 33, 64-65, 55 P. 1026, 1035 (1899); Hefferlin v. Karlman, 29 Mont. 139, 145, 74 P. 201, 202 (1903) (“[E]xamination of a witness . . . is a matter within the sound discretion of the trial court, who may, in the exercise of that judicial discretion, allow or disallow leading questions.”). ¶19 In this case, the District Court properly allowed the State to use leading questions to elicit testimony from Fawna. The exception in M. R. Evid. 611(c) allowed the State to use leading questions because there was ample evidence at trial that Fawna was an adult with communication problems, including her developmental disability, mild mental 8 handicap, and confusion about time and place. The District Court did not abuse its discretion. CONCLUSION ¶20 For the foregoing reasons, the defendant’s conviction is affirmed. /S/ MIKE McGRATH We Concur: /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ LAURIE McKINNON

September 6, 2016

0b570710-112d-49b9-a69b-0a1723ece8de

State v. Hoff

2016 MT 244

DA 14-0417

Montana

Montana Supreme Court

DA 14-0417 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 244 STATE OF MONTANA, Plaintiff and Appellee, v. JORY ROBERT HOFF, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDC 2013-247 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Kristen L. Peterson, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Melissa Broch, Deputy County Attorney, Helena, Montana Submitted on Briefs: August 17, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 14-0417 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Jory Robert Hoff (Hoff) appeals from final judgment entered in the First Judicial District Court, Lewis and Clark County, after a jury found him guilty of sexual assault and sexual intercourse without consent. We affirm. ISSUES ¶2 Hoff raises three issues on appeal: 1. Did the District Court violate Hoff’s constitutional right to a public trial when it closed to the public a hearing on the admissibility of the victim’s prior allegations of sexual abuse? 2. Did the District Court err in preventing Hoff from questioning the victim about prior allegations of sexual abuse? 3. Did the District Court err by not disclosing information contained in confidential records after conducting an in camera review? BACKGROUND ¶3 I.L. was born in 2002, and her parents separated soon thereafter. I.L. lived with her mother, except for a period between 2008 and 2010, when I.L. lived on and off with her father, her father’s sister, and her maternal grandparents. In 2011, I.L.’s mother began dating and living with Hoff. I.L.’s mother worked evenings twice a week and left I.L. in the care of Hoff or I.L.’s maternal grandfather on those nights. ¶4 In July 2013, when I.L. was 11 years old, she had an argument with her mother and said she wanted to live with her father. I.L.’s parents arranged for her father to take I.L. to his house, where he lived with his new wife. Because I.L.’s father traveled for work, I.L. was often left in her stepmother’s care. This living arrangement lasted for about two weeks, until I.L’s father and stepmother were both scheduled to travel out of 3 state. I.L.’s stepmother offered to take I.L. with her, but I.L.’s mother refused to give permission to take I.L. out of state. ¶5 Because both her father and stepmother would be away, I.L.’s stepmother told I.L. she would have to go back to her mother’s house. I.L. became upset and started crying. When her stepmother asked what was wrong, I.L. said Hoff had sexually assaulted her when she was staying with Hoff and her mother. I.L.’s stepmother then called the police and relayed what I.L. had said. I.L. underwent a forensic interview two days later, during which she said Hoff had been touching her inappropriately almost every night for two years. Hoff was arrested the day of I.L.’s forensic interview. He has denied that he touched I.L. inappropriately. ¶6 During pretrial discovery, the State and Hoff jointly moved for an in camera review of certain records maintained by the Department of Public Health and Human Services (DPHHS) pertaining to I.L.’s accusations against Hoff. The District Court conducted its in camera review and released relevant records. These records contained references to statements I.L. made when she was four, which accused two other men of sexual assault. Hoff then filed a second motion for in camera inspection of additional DPHHS records regarding these prior accusations. The District Court reviewed and released four more pages of DPHHS records, with redactions. ¶7 Before trial, Hoff requested a preliminary hearing on the admissibility of the prior accusations made by I.L. Hoff maintained those accusations were false and therefore relevant to the veracity of I.L.’s present accusations against Hoff. In State ex rel. Mazurek v. Dist. Court of the Mont. Fourth Judicial Dist., 277 Mont. 349, 357–58, 922 4 P.2d 474, 479–80 (1996), we adopted a three-part test governing the admissibility of prior accusations of sexual assault. That test requires a district court to determine, among other things, that the prior accusations were in fact false. Mazurek, 277 Mont. at 358, 922 P.2d at 480. Hoff requested the Mazurek hearing to give him the opportunity to show the prior accusations were false and therefore admissible at trial. ¶8 On the day of the Mazurek hearing, the State asked the District Court to close the hearing to the public. The State reasoned that the hearing would involve confidential and sensitive records detailing the prior accusations, which necessitated closure to maintain confidentiality. Hoff objected to closing the hearing, arguing that no statute or precedent supported closing the hearing simply because it dealt with sensitive material. Because the whole trial concerned sensitive material, Hoff maintained that the hearing should remain open. Ultimately, the District Court closed the hearing to the public, although witnesses slated to testify at the hearing remained in the courtroom throughout the hearing. ¶9 After the hearing, the District Court issued a written order denying the admission of the prior accusations. The District Court stated: [T]he evidence does not show, as required by Mazurek, that the accusations were in fact false. Further, while the accusations are certainly suspicious and raise question in the Court’s mind, it has not been shown to the satisfaction of this Court that the prior accusations were in fact false. Here, the Court is focusing on Mazurek’s requirement that the accusations be “in fact false.” In the view of this Court, this requirement was fleshed out by the Supreme Court’s holding that the prior assault allegations need to be adjudicated to be false or admitted to be false. Here, there has been no such adjudication or admission. 5 (emphasis in original). Because the District Court found the second condition of Mazurek was not satisfied, it prohibited Hoff from cross-examining I.L. about the prior accusations at trial. ¶10 Following a four-day trial, the jury found Hoff guilty on both counts. STANDARDS OF REVIEW ¶11 This Court’s review of constitutional questions is plenary. State v. Johnson, 2015 MT 221, ¶ 10, 380 Mont. 198, 356 P.3d 438. We review a district court’s evidentiary ruling for an abuse of discretion. State v. MacKinnon, 1998 MT 78, ¶ 12, 288 Mont. 329, 957 P.2d 23. A court abuses its discretion if it “acts arbitrarily without conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice.” State v. Henson, 2010 MT 136, ¶ 19, 356 Mont. 458, 235 P.3d 1274. To the extent a court’s evidentiary ruling is based on an interpretation of a constitutional right, our review is de novo. State v. Patterson, 2012 MT 282, ¶ 10, 367 Mont. 186, 291 P.3d 556. DISCUSSION ¶12 1. Did the District Court violate Hoff’s constitutional right to a public trial when it closed to the public a hearing on the admissibility of the victim’s prior allegations of sexual abuse? ¶13 The Sixth Amendment to the U.S. Constitution provides criminal defendants the “right to a speedy and public trial.” U.S. Const. amend. VI. The public trial right benefits the accused to the extent “the presence of interested spectators may keep his triers keenly alive to a sense of their responsibility and to the importance of their functions.” Waller v. Ga., 467 U.S. 39, 46, 104 S. Ct. 2210, 2215 (1984) (internal 6 quotation omitted). Open proceedings are particularly important in pretrial suppression hearings. Waller, 467 U.S. at 47, 104 S. Ct. at 2216. ¶14 Nevertheless, the right to a public trial may yield to “‘an overriding interest based on findings that closure is essential to preserve higher values and is narrowly tailored to serve that interest.’” Waller, 467 U.S. at 45, 104 S. Ct. at 2215 (quoting Press-Enter. Co. v. Super. Court of Cal., 464 U.S. 501, 510, 104 S. Ct. 819, 824 (1984)). Following Waller, the right to a public trial may give way if: (1) the party seeking to close the hearing advances an overriding interest that is likely to be prejudiced; (2) the closure is no broader than necessary to protect that interest; (3) the court considers alternatives to closing the proceeding that would still protect the interest; and (4) the court makes findings adequate to support the closure. Waller, 467 U.S. at 48, 104 S. Ct. at 2216. ¶15 Preventing the disclosure of sensitive information is a sufficiently strong interest to override the general presumption of openness in trials. Waller, 467 U.S. at 45, 104 S. Ct. at 2215. Few cases present that interest more starkly than the sexual assault of a minor. In Globe Newspaper Co. v. Super. Court, 457 U.S. 596, 102 S. Ct. 2613 (1982), the U.S. Supreme Court noted that “safeguarding the physical and psychological well-being of a minor” is a compelling interest, but held unconstitutional a law that required automatic closure during a minor victim’s testimony. Globe Newspaper Co., 457 U.S. at 607–08, 102 S. Ct. at 2620–21. Instead, courts should consider the nature of the crime, the age and maturity of the victim, and the victim’s wishes before making a case-by-case decision to close the trial for the victim’s testimony. Globe Newspaper Co., 457 U.S. at 608, 102 S. Ct. at 2621. No one factor is determinative, and the decision to 7 close a hearing is ultimately left to the trial court’s discretion. Bell v. Jarvis, 236 F.3d 149, 171 (4th Cir. 2000) (citing Globe Newspaper Co., 457 U.S. at 609, 102 S. Ct. at 2621). ¶16 While the final element of the Waller test requires findings that support closure, the findings do not need to be exceptionally detailed. Rather, the trial court’s findings need only be “specific enough that a reviewing court can determine whether the closure order was properly entered.” Press-Enter. Co., 464 U.S. at 510, 104 S. Ct. at 824; accord Waller, 467 U.S. at 45; Bell, 236 F.3d at 172. ¶17 Hoff argues the District Court’s closure of the Mazurek hearing violated his right to a public trial. Specifically, Hoff contends the State’s interest—protecting the confidentiality of sensitive information that could further injure I.L.—is not substantial enough to justify closure. Even if the interest was substantial, Hoff maintains that the State failed to show, and the District Court failed to find, that the interest was likely to be prejudiced and that there were no reasonable alternatives to closing the hearing. Hoff reasons that leaving the Mazurek hearing open would not jeopardize the State’s interest for two primary reasons. First, significant portions of the hearing concerned topics that did not implicate I.L.’s private information, like the procedures used in DPHHS investigations. Second, those portions of the hearing that did touch I.L.’s private information could be redacted or otherwise anonymized for her protection. ¶18 The right to a public trial clearly attaches to pretrial suppression hearings, including a Mazurek hearing. Thus, Hoff’s right to a public Mazurek hearing will only yield to an overriding interest that satisfies the Waller analysis. Although the District 8 Court’s decision to close the hearing did not set forth detailed findings, we conclude for the reasons set forth below that the District Court did not err in closing the Mazurek hearing. ¶19 The Montana Legislature has created two distinct statutory safeguards against the disclosure of information that could cause further emotional injury to a minor victim of sexual assault. First, DPHHS records and reports concerning child abuse and neglect are deemed confidential by § 41-3-205(1), MCA. These records may be disclosed if, after an in camera review, a court “finds disclosure to be necessary for the fair resolution of an issue before it.” Section 41-3-205(2), MCA. Second, to avoid putting a victim of sexual assault on trial for his or her past conduct, evidence of a victim’s prior sexual conduct is generally inadmissible under the “rape shield statute,” § 45-5-511(2), MCA. Because Mazurek hearings involve evidence of prior sexual conduct that may be protected by the rape shield statute, we anticipated in Mazurek that these hearings would be conducted in camera. Mazurek, 277 Mont. at 358, 922 P.2d at 480. ¶20 In the present case, the State cites both of these statutory provisions as grounds for closing the Mazurek hearing. As made clear in Globe Newspaper Co., shielding I.L. from further psychological injury is a sufficiently compelling interest to justify closure. While Hoff contends the hearing could have remained public with some redactions of the documents to be presented, the District Court had already reviewed the documents in camera and was aware of their contents. We have also reviewed the contents of the confidential documents. We are unconvinced that the records could have been anonymized to protect I.L., as the documents were rife with identifying information. 9 Simply initializing I.L.’s name would not have protected her privacy because her mother testified at the hearing. To go a step further and redact all references to I.L. or her statements would hardly serve Hoff’s purpose of showing I.L. lied in making the prior accusations. We therefore conclude that there were no reasonable alternatives for protecting I.L. ¶21 Hoff requested the Mazurek hearing to explore in detail the facts and circumstances surrounding the prior accusations. At the hearing, Hoff presented DPHHS records and questioned witnesses involved in the investigation of the prior accusations. Invariably, some of Hoff’s evidence focused on the procedures used to investigate the prior accusations. To the extent this foundational evidence addressed investigation procedures in general, the interest in protecting I.L. was not in great jeopardy. Still, the fact that Hoff was required to lay some foundation before exploring the accusations does not mean the District Court should have opened and closed the hearing every time a witness’s testimony shifted in purpose. We do not read Waller to impose such an impractical burden on trial courts. Thus, we conclude the closure was no broader than necessary to protect I.L. ¶22 The District Court closed the hearing after brief oral arguments from both parties. Because the District Court’s decision was not made in writing, the record does not contain many detailed findings. Nevertheless, the record provides sufficient context to show why the District Court closed the hearing. I.L. was four at the time of the prior accusations and eleven at the time of Hoff’s trial. The prior accusations concerned sexual assault of a minor, a crime that demonstrates contempt for the physical and psychological 10 wellbeing of the most vulnerable members of our communities. The record gives no indication of I.L.’s wishes regarding public disclosure of the prior accusations, but Globe Newspaper Co. does not require the court to ascertain a victim’s wishes in every case. The victim’s wishes are one of several factors to be considered, and no single factor is dispositive. Globe Newspaper Co., 457 U.S. at 608, 102 S. Ct. at 2621. In this case, the nature of the crime, the age and maturity of I.L., and the need to safeguard her physical and psychological wellbeing are all factors that favor closing the Mazurek hearing. Because the weight of these factors was apparent when the District Court orally closed the hearing, we see no reason to fault the District Court for not explaining them in detail. As in Bell, the trial judge here “possessed a great deal of information concerning the case before him, and certainly knowledge sufficient to exercise the discretion afforded him under both federal and state law.” Bell, 236 F.3d at 171–72. We therefore conclude the District Court did not err in closing the Mazurek hearing. ¶23 2. Did the District Court err in preventing Hoff from questioning the victim about prior allegations of sexual abuse? ¶24 Criminal defendants have the right to confront witnesses against them. U.S. Const. amend. VI. “‘[L]imiting or barring a defendant’s cross-examination of a complaining witness in a sex crime case where there is evidence of prior false accusations restricts defendant’s enjoyment of the worth of his constitutional rights to confront witnesses.’” Mazurek, 277 Mont. at 358, 922 P.2d at 479 (emphasis added) (quoting State v. Anderson, 211 Mont. 272, 284, 686 P.2d 193, 200 (1984)). If the prior accusations were true, evidence of the accusations would be irrelevant, highly prejudicial, 11 and inadmissible. Mazurek, 277 Mont. at 356, 922 P.2d at 479 (citing Anderson, 211 Mont. at 284, 686 P.2d at 200). A court may only admit evidence of prior accusations if the court first determines: (1) the accusations were in fact made; (2) the accusations were in fact false; and (3) the evidence is more probative than prejudicial. Mazurek, 277 Mont. at 358, 922 P.2d at 480 (citing Miller v. State, 779 P.2d 87, 90 (Nev. 1989)). We have explained the “in fact false” caveat as meaning the accusations must be adjudicated or admitted to be false. Mazurek, 277 Mont. at 359, 922 P.2d at 480. For the purposes of a Mazurek hearing, “adjudicated” does not necessarily mean a court has previously heard evidence and rendered a final judgment on the accusation. Instead, the court conducting the Mazurek hearing may, after hearing sufficient evidence, adjudicate the falsehood of a previous accusation in the Mazurek hearing. Mazurek, 277 Mont. at 357, 922 P.2d at 479. ¶25 I.L.’s prior accusations of sexual assault made when she was four years old were referred to DPHHS. The agency’s reports on the prior accusations indicate a child protection team reviewed the claims. At the Mazurek hearing, a representative from Child Protective Services testified that her department did not investigate the accusations because they did not implicate a parent in the abuse. Instead, the DPHHS reports indicate the accusations were referred to law enforcement for investigation. The record does not show any further action taken by law enforcement. ¶26 Hoff argues the District Court misconstrued the “in fact false” requirement as a strict burden to show a formal adjudication or admission. Hoff calls our attention to language from the District Court’s order, which bears repeating: 12 Here, the Court is focusing on Mazurek’s requirement that the accusations be “in fact false.” In the view of this Court, this requirement was fleshed out by the Supreme Court’s holding that the prior assault allegations need to be adjudicated to be false or admitted to be false. Here, there has been no such adjudication or admission. Hoff asserts that this language shows the District Court expected a formal adjudication or admission. However, full context shows the District Court considered Hoff’s evidence and found it insufficient to conclude the accusations were false. ¶27 If the District Court believed that only formal adjudication or admission could show the prior accusations were in fact false, only two pieces of evidence would be relevant: proof of an adjudication or proof that I.L. admitted the prior allegations were false. Hoff presented no evidence of an admission of falsehood at the hearing, but he did put on evidence from investigators and others in an attempt show the accusations could not be true. Hoff did not argue, nor could he credibly argue, that the actions of DPHHS and law enforcement in investigating allegations of childhood sexual assault constituted an adjudication of the allegations’ truth. Consequently, Hoff’s evidence would be irrelevant and inadmissible if the District Court erroneously believed only a formal adjudication could demonstrate the falsity of the allegations. In fact, the District Court considered Hoff’s evidence. Ultimately, the District Court found the accusations “certainly suspicious,” but concluded this suspicion was not substantial enough to show the accusations were in fact false. ¶28 Because the District Court evaluated Hoff’s evidence in accord with Mazurek, we will overturn its decision to exclude the prior accusations only if we find an abuse of discretion. Hoff presents an array of facts which he believes shows the prior accusations 13 could not be true. We cannot agree that these seven-year-old claims were established to be false, nor does the record before us demonstrate that the District Court exceeded the bounds of reason or acted without conscientious judgment. We therefore conclude that the District Court did not abuse its discretion in denying admission of the prior accusations. ¶29 3. Did the District Court err by not disclosing information contained in sealed records after conducting an in camera review? ¶30 Criminal defendants have a due process right to information that is favorable to their defense and material to guilt or punishment. State v. Johnston, 2014 MT 329, ¶¶ 6-9, 337 Mont. 291, 339 P.3d 829 (citing Pa. v. Ritchie, 480 U.S. 39, 57, 107 S. Ct. 989, 1001 (1987)). In cases involving alleged sexual assault of a minor, this right extends to confidential files compiled by DPHHS. Johnston, ¶¶ 6–9. Evidence “is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different.” Ritchie, 480 U.S. at 57, 107 S. Ct. at 1001. ¶31 After an in camera review of the DPHHS files regarding I.L.’s prior allegations, the District Court withheld certain portions of the files from the parties. Hoff has asked this Court to review the files the District Court kept sealed to determine if they contain information that could be material to Hoff’s defense. We have reviewed the sealed files in camera and determined that they do not contain any new, material information that the parties lacked at trial. The only redactions were for the protection of personally identifiable information. Because there is no reasonable probability that the outcome of 14 Hoff’s trial would have been different with the release of the files, Hoff’s due process right was not violated. See Ritchie, 480 U.S. at 57, 107 S. Ct. at 1001. We therefore conclude that the District Court did not err in keeping the records sealed. CONCLUSION ¶32 For the foregoing reasons, we affirm the judgment of the District Court. /S/ PATRICIA COTTER We Concur: /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

October 4, 2016

dd1b2ebe-a89c-407f-be80-d83c4f15574c

Northwestern Corp. v. Dep’t of Pub. Serv. Regulation

2016 MT 239

DA 15-0612

Montana

Montana Supreme Court

DA 15-0612 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 239 NORTHWESTERN CORPORATION, doing business as NORTHWESTERN ENERGY, Petitioner and Appellant, v. THE MONTANA DEPARTMENT OF PUBLIC SERVICE REGULATION, MONTANA PUBLIC SERVICE COMMISSION, Respondent and Appellee, NATURAL RESOURCES DEFENSE COUNCIL, HUMAN RESOURCE COUNCIL, DISTRICT XI, and MONTANA CONSUMER COUNSEL, Intervenors. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DV-13-399 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Al Brogan, NorthWestern Corporation d/b/a/ NorthWestern Energy, Helena, Montana For Appellee: Jason Brown, Jeremiah Langston, Justin Kraske, Montana Public Service Commission, Helena, Montana For Intervenors: Robert A. Nelson, Montana Consumer Counsel, Helena, Montana 09/27/2016 Case Number: DA 15-0612 2 Charles Magraw, Human Resource Council, District XI, Natural Resources Defense Council, Helena Montana Submitted on Briefs: August 10, 2016 Decided: September 27, 2016 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 Appellants NorthWestern Corporation, doing business as NorthWestern Energy (NorthWestern), the Natural Resources Defense Council (NRDC), and Human Resources Council, District XI (HRC), appeal the decision of the Second Judicial District Court affirming the Final Order of the Montana Public Service Commission (Commission), which disallowed $1,419,427 in claimed excess electric regulation costs and adjusted energy efficiency savings calculations. We affirm, considering the following issues: 1. Did the Commission apply the correct legal standard in reviewing NorthWestern’s claim for excess outage costs? 2. Were the “free ridership” and “spillover” calculations adopted by the Commission supported by substantial evidence? FACTUAL AND PROCEDURAL BACKGROUND ¶2 This matter involves a challenge to the Commission’s Final Order in NorthWestern’s 2011–2012 annual tracker filing.1 Therein, NorthWestern requested, inter alia, a $1,419,427 increase in rates for unexpected electricity supply costs due to an outage at its Dave Gates Generating Station (DGGS), located near Anaconda.2 As part of the proceeding, the Commission also ordered NorthWestern to present evidence for purposes of conducting a “true-up” to actual costs for lost revenues that had been previously estimated in NorthWestern’s demand-side management (DSM) programs. Ultimately, the Commission (1) denied NorthWestern’s request to include the DGGS 1 In re NorthWestern Energy’s 2011–2012 Electricity Supply Tracker, Mont. Pub. Serv. Comm’n, Dkt. D2012.5.49, Order No. 7219h (Oct. 28, 2013). 2 The DGGS was formerly called the Mill Creek Generating Station. 4 outage costs in customer rates, and (2) rejected NorthWestern’s expert’s conclusion that the “free ridership” and “spillover” values of its DSM programs were perfectly offsetting, adopting instead the same expert’s actual calculations used in a draft report. DGGS Outage Costs ¶3 In 2008, NorthWestern sought Commission approval to build the DGGS. The DGGS was intended to provide regulation and frequency response service in NorthWestern’s service area. The Commission approved the project in 2009, and the DGGS commenced commercial operation on January 1, 2011. ¶4 The DGGS was a first-of-its-kind facility that NorthWestern presented as having “the potential to be a model facility for the supply of regulation service.” It consisted of three generation units made by Pratt & Whitney Power Systems, Inc. (PWPS) and was an application of a simple cycle natural gas turbine generator designed to increase or decrease generation (ramp) in response to variations in NorthWestern’s load, “on a moment-by-moment basis.” NorthWestern’s General Manager of Generation testified that the plant had a “very unique” control mechanism and “early on we knew that the plant was going to have a very unique control application.” ¶5 NorthWestern was aware that the ramp capabilities of the DGGS were critical to its operation and that the DGGS was a first-of-its-kind application, stating: [The DGGS] is one of the first power plant installations to be built specifically for electrical transmission grid regulation duty. The design requirements for grid regulation are stringent since they require the plant to continually change load in a short time frame (seconds to minutes). 5 This load requirement was necessary because NorthWestern “anticipated variable operating conditions,” largely due to wind generation variations, and the DGGS needed to be able to ramp up or down by at least 15 mega-watts (MW) per minute per unit to “offset the continuous variation between system generation and system load.” ¶6 The contract between NorthWestern and PWPS included a waiver of consequential damages, but NorthWestern purchased, with customer revenue, an extended warranty to cover the innovative technology. NorthWestern did not purchase or evaluate the feasibility of outage insurance in case the DGGS had an operational failure. ¶7 On January 31, 2012, thirteen months after NorthWestern brought the DGGS online, it suffered a complete outage. Unit cycling had caused “thermal stresses” by going from a cold state to a very high temperature, damaging the rotating equipment. PWPS concluded the outage resulted from ramp rates “much greater” than anticipated, excessive temperatures, and cycle-related hardware failures. The Commission was unable to precisely examine the ramp data because NorthWestern failed to maintain minute-by-minute records. ¶8 Pursuant to the extended warranty, PWPS repaired the damaged turbines at its cost, including removal, installation, and shipping costs. However, due to the waiver of consequential damages in the contract, PWPS was not obligated to cover the costs associated with purchasing replacement regulation service during the outage. On February 3, 2012, NorthWestern began purchasing replacement service from Powerex Corp. (Powerex) and Avista Corp. (Avista). PWPS took “extraordinary measures” to 6 repair the DGGS as soon as possible. Individual generators were put back online as PWPS restored them and NorthWestern proportionally decreased its regulation service purchases accordingly. The DGGS was fully back online on May 1, 2012. ¶9 During the outage, NorthWestern customers continued to pay the fixed costs for the operation of the DGGS ($6,742,625), including NorthWestern’s usual rate of return, as well as the variable costs ($1,527,714) NorthWestern did not actually incur, but would have incurred had the plant been operational. However, the outage caused NorthWestern to incur an additional $1,419,427 in charges to Powerex and Avista for regulation service. NorthWestern requested reimbursement of these costs, arguing they were reasonably incurred because it obtained an extended warranty that covered all repairs, it purchased regulation service on the competitive market at 2011 rates, it structured its regulation market purchases to enable it to incrementally reduce the purchases as generators were repaired, and it had worked quickly to get the DGGS back online. ¶10 The Montana Consumer Counsel (MCC) opposed reimbursement of the replacement service costs, contending that NorthWestern failed to undertake risk mitigation by failing to investigate whether outage insurance was available. The MCC offered the testimony of Dr. John Wilson: No. I don’t fault the company for not procuring it [outage insurance]. What I think was imprudent was not looking into it, not evaluating it, not finding out whether it was available and what the cost would be for a plan like this. I think you have to do that before you make a determination as to whether you acquire it or not. 7 The MCC argued that evaluation of insurance was fundamental to risk management where the contract contained an exclusion for consequential damages: [T]he most imprudent thing that occurred here, is the failure of the company to take steps to protect itself against the outage, given the fact that they had this exclusion under the warranty, given the fact that they knew . . . that there were unknowns about this plant and where it was going to go and how it was going to operate. ¶11 NorthWestern responded by providing evidence that in its experience it had never purchased replacement power insurance and, instead, always relied on the market for replacement power. NorthWestern’s General Manager of Generation testified that after receiving inquiry from the Commission and the MCC regarding insurance, he “went and solicited input from other utilities . . . [a]nd they indicated that they simply do not get outage insurance because it is not economical to do so.” NorthWestern put on evidence that outage insurance could be $1 million per year, thus potentially costing more than the replacement power itself, but acknowledged it did not “investigate or purchase insurance that might have covered the additional electricity supply costs.” ¶12 The Commission inquired into NorthWestern’s operation of the DGGS through data requests and found that NorthWestern was aware the units needed to change load quickly, that quick response was critical, and that the units could experience unique thermal stresses due to ramping up and down. The outage was directly tied to “ramp rates ‘much greater’ than anticipated, excessive temperatures and cycle-related hardware failures,” yet NorthWestern used software allowing excessive ramping and did not retain precise ramp rate data. 8 ¶13 The Commission determined that NorthWestern’s management of the DGGS was not reasonable and that the excess regulation costs were not prudently incurred because NorthWestern (1) failed to prudently manage risks; and (2) did not “exhibit the level of situational awareness that the Commission would expect from a utility managing a one-of-its-kind power plant.” The Commission reasoned: Given the warranty’s exclusion of consequential damages and the uniqueness of DGGS, NorthWestern should have identified the risk of incurring replacement costs in the event of an outage. . . . [NorthWestern’s] failure to identify risk ensured that incremental costs of replacement service would be incurred in the event of an outage. The Commission found that outage insurance was available and, even though it may not have been cost-effective, because NorthWestern failed to “evaluate the availability, price and terms of outage insurance,” it “guaranteed that any incremental replacement costs would be unavoidable in the event of an outage.” Citing both NorthWestern’s failure to manage risk and reasonably operate the DGGS, the Commission denied NorthWestern’s request to include the outage costs in customer rates. DSM Program ¶14 Fixed costs are those the utility will incur regardless of how much energy it actually sells to consumers. Utilities typically recover fixed costs through volume based charges built into customer rates. Consequently, there is no financial incentive for a utility to encourage energy efficiency because decreases in consumption would hamper the utility’s recovery of its fixed costs. A lost revenue adjustment mechanism (LRAM) is designed to compensate a utility for the revenue lost due to the utility’s energy efficiency 9 efforts. In essence, it allows the utility to estimate and recover the revenue it lost due to energy efficiency efforts directly attributable to the utility, such as by DSM programs. ¶15 In 2005, the Commission approved the use of a LRAM to account for revenue losses incurred as a result of NorthWestern’s energy efficiency efforts, finding that “the lost revenue disincentive is real and puts at risk a full and complete ramp-up of cost-effective energy efficiency resource acquisition programs in the near-term.” It authorized NorthWestern to include in rates an estimate of the income lost due to DSM programs with a requirement that, after the programs had been implemented, the “estimated lost . . . revenue amount must be trued-up based on actual program activity in [the given years] and again following a comprehensive program evaluation and independent verification of actual savings.” This “true-up” ensures that NorthWestern is only including in rates the revenue lost from its DSM programs, and not from independent causes. ¶16 Analysis of a DSM program includes examination of “free ridership” and “spillover.” Free ridership occurs when a consumer takes advantage of a program incentive to install an energy efficient device, but would have installed the device with or without the incentive. As such, the utility did not effectuate the customer’s usage reduction and is not entitled to recover the associated lost revenue. On the other side of the ledger, spillover occurs when a consumer does not respond to a DSM program incentive, but later chooses energy efficient products or practices as a result of the 10 utility’s general advocacy. As such, the utility is credited with the energy reduction it only indirectly induced, and can include those lost revenues in its LRAM. ¶17 NorthWestern selected Nexant Energy Management Group (Nexant) to evaluate its DSM programs for its first true-up process in 2006–2007. Nexant measured free ridership and spillover and included them in its final assessment. The Commission adopted the Nexant assessment, concluding that it “satisfies the DSM program evaluation and savings verification requirements” the Commission had established. ¶18 The next true-up of NorthWestern’s DSM programs was presented in the subject proceeding. NorthWestern hired SBW Consulting (SBW), who partnered with Research into Action (RIA), to conduct the required independent, comprehensive true-up for the periods 2006-2007 to 2010-2011. In its draft report to NorthWestern, SBW included the values for free ridership and spillover it had calculated. The draft report concluded that NorthWestern was responsible for 79% of the energy efficiency savings it had estimated and included in customer rates through the LRAM. ¶19 However, in its final report, SBW came to the conclusion that the values calculated for free ridership and spillover should not be used in the assessment of NorthWestern’s DSM programs. The final report assumed that the two values, since they work in contradiction to each other, offset each other equally. In statistical terms, this offset was considered a 1.0 net-to-gross (NTG), meaning the net is no different than the gross savings. By completely offsetting spillover and free ridership values, SBW’s final report concluded that NorthWestern was responsible for 87% of the energy efficiency 11 savings it had previously estimated in the LRAM.3 NorthWestern agreed that this difference in over-collected revenues ought to be refunded to NorthWestern ratepayers. ¶20 During her testimony before the Commission, Dr. Marjorie McRae (Dr. McRae), the RIA researcher responsible for free ridership and spillover calculations, explained that when she met with NorthWestern to discuss the draft report, she had informed NorthWestern that she believed “we are not able, as a profession, to measure these accurately, and that the effects are offsetting.” Dr. McRae testified that NorthWestern had advised her to revise the draft “according to [her] professional opinion.” Thus, the final report utilized a 1.0 NTG value for comparison between the two values instead of using the actual values derived from the research. Dr. McRae affirmed that she had conducted the free ridership and spillover research using “national common practices, and best practices,” and the actual data was “comparable to those found for similar programs conducted by other respected program evaluators.” However, the SBW final report stated that there were problems with using the calculated free ridership and spillover calculations: [T]he economic analysis [should] use the value 1.0 for the net-to-gross ratio . . . [due to] known limitations to standard practices for the estimation of free ridership and spillover estimation—limitations that confound their effects and result in the overestimation of free ridership and the underestimation of spillover—and on current net-to-gross practices in 31 3 NorthWestern had projected 309,336 megawatt-hours (MWh) of total energy savings. In its final report, SBW was able to verify 270,564 MWh in savings. 12 jurisdictions with active energy efficiency programs, many of which recognize that free ridership and spillover are offsetting phenomena.4 ¶21 Dr. McRae concluded that researchers cannot truly ascertain free ridership and spillover values, and opined the Commission should use a 1.0 NTG ratio that treats the numbers as if they perfectly offset each other. To support her conclusion, Dr. McRae cited various studies, one notably finding that thirteen regulatory jurisdictions used a 1.0 NTG, while two jurisdictions, Michigan and New York, used a 0.9 NTG. ¶22 Under cross-examination, Dr. McRae admitted she cannot know what the actual values are due to the state of the science. “I would say that’s [(measuring spillover and free ridership)] not possible with any methods that I know to know what they are.” In response to questions from Commissioner Kavulla about whether there was data to support her conclusion that free ridership and spillover perfectly offset in a 1.0 NTG relationship, Dr. McRae admitted: If you take 1.0 as the null hypothesis that these effects are offsetting, then, I think the burden is—especially if you’re going to be in a lost revenue calculation or something like that, I think the burden of proof is to say, no, these aren’t offsetting. These savings would have happened anyway. . . . I don’t think we have a way of saying that the null hypothesis is rejected, that it’s anything other than what 1.0. And if you want to say for argument’s sake it’s [0].9, well, then for argument’s sake why don’t we say it’s 1.1. 4 Specifically, Dr. McRae opined that while the free ridership and spillover numbers were reliable (they consistently returned similar results from similar data sets), the numbers were not valid because researchers are unsure what the research was actually measuring. For free ridership, Dr. McRae stated various biases were the core of the problem, notably asymmetric perceptions of gains versus losses, attribution errors, cognitive dissonance, and the inability to accurately report events and predict participants’ behavior. For spillover, McRae noted difficulty identifying non-incentivized efficiency actions, estimating baseline energy usage, and showing a causal relation to an efficiency program. 13 Commissioner Kavulla’s asked: “why is the 1.0 rather than a [0].09 or a 1.1 the null hypothesis?” Dr. McRae concluded: “I think in the absence of any other information, you just assume that one is positive and one is a negative; they’re offsetting. That’s how I think of it.” ¶23 The Commission rejected Dr. McRae’s conclusion that free ridership and spillover perfectly offset each other in a 1.0 NTG ratio and, instead, adopted the values she provided in her draft report. The Commission held that “[a]lthough free ridership and spillover may be difficult to estimate, the remedy is not to discard the only empirical data that attempts to ascertain those values.” The Commission disagreed with Dr. McRae’s conclusion that offsetting meant equal offsetting: Offsetting does not imply perfectly offsetting, and NorthWestern has not demonstrated that an NTG of 1.0 is more reasonable as a null hypothesis than an NTG of 0.9 or any other fixed relation of the effects of free ridership and spillover. Because SBW did not test the null hypothesis proposed by [Dr.] McRae, it cannot be supported. Noting the Commission’s duty to “approve an accurate level of savings and associated lost revenues,” the Commission reasoned that Dr. McRae’s conclusions were problematic because they forced the Commission to assume both that: (1) a fixed ratio (1.0 NTG) between free ridership and spillover was more accurate than actual measured numbers; and (2) 1.0 NTG was a better assumption than any other fixed value, for example, 0.9 NTG. Using the data from the draft report indicating a 0.908 NTG correlation between free ridership and spillover, the Commission lowered NorthWestern’s true-up realization rate from 87% to 79%. 14 Procedural History ¶24 NorthWestern appealed the Commission’s order on both issues to the Montana Second Judicial District Court, Silver Bow County. The District Court affirmed the Commission’s Final Order. NorthWestern, NRDC, and HRC appeal. STANDARD OF REVIEW ¶25 In an administrative appeal, we apply the same standards of review that the district court applies. Whitehall Wind, LLC v. Mont. Pub. Serv. Comm’n, 2015 MT 119, ¶ 8, 379 Mont. 119, 347 P.3d 1273 (Whitehall Wind II); Molnar v. Fox, 2013 MT 132, ¶ 17, 370 Mont. 238, 301 P.3d 824. Administrative appeals are governed by § 2-4-704, MCA. “A district court reviews an administrative decision in a contested case to determine whether the agency’s findings of fact are clearly erroneous and whether its interpretation of the law is correct.” Whitehall Wind, LLC v. Mont. PSC, 2010 MT 2, ¶ 15, 355 Mont. 15, 223 P.3d 907 (Whitehall Wind I); accord Molnar, ¶ 17 (conclusions of law are reviewed de novo). Judicial review of a final agency decision “must be confined to the record.” Section 2-4-704(1), MCA; Molnar, ¶ 17. ¶26 “The court may not substitute its judgment for that of the agency as to the weight of the evidence on questions of fact.” Section 2-4-704(2), MCA; accord Whitehall Wind II, ¶ 7. “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. PSC, 2012 MT 32, ¶ 25, 364 Mont. 128, 272 P.3d 15 71. “In reviewing findings of fact, the question is not whether there is evidence to support different findings, but whether competent substantial evidence supports the findings actually made.” Mayer v. Bd. of Psychologists, 2014 MT 85, ¶ 27, 374 Mont. 364, 321 P.3d 819. The court may reverse or modify the agency decision if the “substantial rights” of the appellant were prejudiced because the administrative findings are “in excess of the statutory authority of the agency,” “affected by error of other law,” “clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record,” or “arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.” Section 2-4-704(2)(ii), (iv), (v), (vi), MCA. ¶27 “Except as otherwise provided by statute relating directly to an agency, agencies shall be bound by common law and statutory rules of evidence.” Section 2-4-612(2), MCA. “The agency’s experience, technical competence, and specialized knowledge may be utilized in the evaluation of evidence.” Section 2-4-612(7), MCA. “Substantial evidence is evidence that a reasonable mind could accept as adequate to support a conclusion; evidence beyond a scintilla.” Mayer, ¶ 27 (internal quotations omitted). “Moreover, the court should give deference to an agency’s evaluation of evidence insofar as the agency utilized its experience, technical competence, and specialized knowledge in making that evaluation.” Knowles v. State ex rel. Lindeen, 2009 MT 415, ¶ 21, 353 Mont. 507, 222 P.3d 595 (citing § 2-4-612(7), MCA; Johansen v. Dept. of Natural Res. and Conservation, 1998 MT 51, ¶ 29, 288 Mont. 39, 955 P.2d 653). 16 DISCUSSION ¶28 1. Did the Commission use the correct legal standard in reviewing NorthWestern’s claim for excess outage costs? ¶29 NorthWestern argues that the Commission used the incorrect legal standard when reviewing the outage costs associated with purchasing replacement regulation service during the DGGS outage. NorthWestern contends that “prudently incurred electricity supply costs,” § 69-8-210(1), MCA, is an objective, reasonable person standard, which in the context of utilities, is a “reasonable utility standard.” NorthWestern notes that other jurisdictions consider such costs under a reasonable utility standard. Under this standard, NorthWestern argues that “prudently incurred” costs are those that a reasonable utility in NorthWestern’s similar situation would have incurred, and argues that it acted as any other reasonable utility would have in the same situation. ¶30 The Commission argues that “prudent” must be interpreted in light of the statutes and Commission rules referenced by the statute. The Commission does not dispute that the reasonable utility test is one factor to be considered, but argues that it is not the complete definition of “prudent.” The Commission offers that it reviewed NorthWestern’s actions to determine whether the electricity supply costs were prudent pursuant to § 69-8-210(1), MCA, whether the assets purchased and owned by NorthWestern were managed reasonably under §§ 69-8-419 and -421, MCA, and whether rates that included the outage charges would be excessive or confiscatory pursuant to § 69-3-201, MCA. The Commission argues it applied the appropriate review and, under the facts in this case, made an appropriate determination that the costs were not prudently 17 incurred because the plant was not reasonably managed, and that any rates that included those costs would not be reasonable. ¶31 At issue in this case is the meaning of the word “prudent” in § 69-8-210(1), MCA, which, as the parties note, is not defined by the Legislature. Section 69-8-210(1), MCA, reads in full: The commission shall establish an electricity cost recovery mechanism that allows a public utility to fully recover prudently incurred electricity supply costs, subject to the provisions of 69-8-419, 69-8-420, and commission rules. The commission may include other utility costs and expenses in the cost recovery mechanism if it determines that including additional costs and expenses is reasonable and in the public interest. The cost recovery mechanism must provide for prospective rate adjustments for cost differences resulting from cost changes, load changes, and the time value of money on the differences. ¶32 Section 69-8-210(1), MCA reflects the full authority the Legislature granted to the Commission to review electricity supply costs. The Commission is an administrative agency created by statute. Section 69-1-102, MCA; Schuster v. Northwestern Energy Co., 2013 MT 364, ¶ 9, 373 Mont. 54, 314 P.3d 650. The Commission does not have judicial powers, Schuster, ¶ 9, Williamson, ¶ 31, and its jurisdiction is “limited to the regulation of rates and service as provided by the Montana statutes.” Billings v. Pub. Serv. Comm’n, 193 Mont. 358, 370, 631 P.2d 1295, 1303 (1981); accord Great N. Utils. Co. v. Pub. Serv. Comm’n, 88 Mont. 180, 203, 293 P. 294, 298 (1930) (“[T]he Commission is a creature of, owes its being to, and is clothed with such powers as are clearly conferred upon it by the statute.”); Mont. Power Co. v. Pub. Serv. Comm’n, 206 Mont. 359, 371, 671 P.2d 604, 611 (1983). As we noted in the cases following the 18 deregulation of the Montana electrical industry, see, e.g., Mont. Power Co. v Mont. PSC, 2001 MT 102, ¶ 46, 305 Mont. 260, 26 P.3d 91 (“[W]e observe that the Commission is statutorily charged with applying and enforcing the [deregulation] Act.”), the Commission was specifically charged with carrying out the statutes in question: “[t]he commission shall establish an electricity cost recovery mechanism.” Section 69-8- 210(1), MCA (emphasis added). As such, the statute in question clearly confers authority on the Commission for this purpose. ¶33 The meaning of “prudent” is largely self-evident. “Absent statutory definitions, the plain meaning of the words used controls.” City of Great Falls v. Mont. Dept. of Pub. Serv. Regulation, 2011 MT 144, ¶ 18, 361 Mont. 69, 254 P.3d 595; accord Williamson, ¶ 36. The word has been applied in prior Commission decisions, which have used such terms for “prudent” as “marked by wisdom or judiciousness” or “circumspect or judicious in one’s dealings” and its synonyms are “‘careful,’ cautious,’ ‘sensible,’ ‘practical,’ ‘discreet,’ ‘wise,’ and ‘farsighted.’” In re Mont. Power Co., Mont. Pub. Serv. Comm’n, Docket D2001.10.144, Order No. 6382d 12 (June 21, 2002) (internal citations omitted). The Montana Legislature gave the Commission express latitude to determine if the given costs were prudent—careful, sensible, practical, discreet, wise, or farsighted or, more apt in the regulatory environment, avoiding unnecessary risks— through its own fact finding and administrative authority. Further, this analysis is undertaken in light of the statutory requirement that “prudently incurred electricity supply 19 costs” must be determined “subject to the provisions of 69-8-419, 69-8-420, and commission rules.” Section 69-8-210(1), MCA.5 ¶34 Section 69-8-419, MCA, governs the utility’s duties for building and maintaining its “electricity supply resource” portfolio, including contracts for power generation or capacity, electricity plants owned or leased by the utility, customer load management, or any other means of providing reliable and adequate electricity service to customers. Section 69-8-103(9), MCA (defining “electricity supply resource”). The provision requires utilities to “plan for future electricity supply resource needs; manage a portfolio of electricity supply resources; and procure new electricity supply resources when needed.” Section 69-8-419, MCA. The utility is required to conduct this planning in accordance with, inter alia, the following objectives: (1) “provide adequate and reliable electricity supply service at the lowest long-term total cost”; and (2) “identify and cost-effectively manage and mitigate risks related to its obligation to provide electricity supply service.” Section 69-8-419(2)(a), (c), MCA. Thus, the utility must plan for future needs, manage its portfolio, and procure resources when necessary at the lowest long-term cost and, when doing so, identify and mitigate risks related to those obligations. ¶35 Commission administrative rules also address prudent utility resource procurement. “Prudent electricity supply resource planning and procurement includes evaluating, managing, and mitigating risks associated with the inherent uncertainty of 5 Section 69-8-420, MCA, covers a utility’s utility procurement plan, which are not directly at issue in this proceeding. 20 wholesale electricity markets and customer load.” Admin. R. M. 38.5.8219(1) (2016) (emphasis added). The Commission has specifically identified sources of risk that, among others, may be evaluated: fuel prices and price volatility, environmental regulations and taxes, retail supply rates, supplier capabilities, construction costs, and contract terms and conditions. Admin. R. M. 38.5.8219(1) (emphasis added). The Commission’s rules require that the “utility’s strategy for managing and mitigating risks associated with the identified risk factors should be developed in the context of the goals and objectives of these guidelines and include an evaluation of relevant opportunity costs.” Admin. R. M. 38.5.8219(2). Finally, prudence involves documenting and carrying out the resource procurement plans: The commission must allow a utility to recover all costs it prudently incurs to perform this function. Whether the costs a utility incurs are prudent is, in part, directly related to whether its resource procurement process was conducted prudently. It is vital that a utility document its portfolio planning, management and electricity supply resource procurement activities to justify the prudence of its resource procurement decisions. Admin. R. M. 38.5.8220(2). ¶36 Considering these sources, we disagree with NorthWestern that the “reasonable utility standard”—i.e., what would a reasonable utility do in similar circumstances—is the appropriate interpretation of “prudent” or the appropriate inquiry under Montana law. The Montana Legislature used the term “prudent,” not “reasonable utility,” to describe how the Commission was to review electricity supply costs. Adopting NorthWestern’s proposed standard would read a contradictory idea into the statute. If “prudent” was restricted to what a reasonable utility would do in similar circumstances, the Commission 21 would be deprived of its own discretion to evaluate and determine whether the utility’s actions were prudent. Tying the outcome to evidence of what other utilities did or would do would remove or reduce the discretion of the Commission to rely on its own expertise. ¶37 In sum, § 69-8-210(1), MCA, grants authority to the Commission to determine whether energy supply costs were prudently incurred—i.e., the utility’s incurred costs were wise, judicious, or sought to avoid unnecessary risk—in light of the planning requirements set forth in § 69-8-419, MCA, § 69-8-421, MCA, and Commission rules, which specifically require risk analysis and mitigation, including an examination of the relevant contract terms. The Commission was correct to apply these standards. ¶38 The remainder of NorthWestern’s arguments challenging the Commission’s decision assumes that the reasonable utility standard governs the outcome. Having rejected that view, we need not address all of NorthWestern’s further arguments based thereon. In brief, and to the extent that the reasonable utility standard is an appropriate factor to consider, as the Commission did, the Commission’s determination was supported by the record. The DGGS was a “one-of-a-kind” plant and the purchase and installation contract contained a provision that excluded consequential damages. Waiver of consequential damages on a first-of-its-kind regulation plant without extensive industry use supported the Commission’s determination that NorthWestern’s failure “to identify risk ensured that incremental costs of replacement service would be incurred in the event of an outage,” and was imprudent. To defend its actions, NorthWestern asked other utilities—after the MCC and the Commission inquired into its risk mitigation 22 efforts—about their insurance practices and presented evidence that those utilities did not purchase it. However, this is risk justification, not risk management. ¶39 Even if it is accepted that insurance was cost-prohibitive and would not have been a viable alternative, the Commission also determined that NorthWestern did not reasonably manage the DGGS and that the outage costs were also imprudent for that reason.6 NorthWestern was aware that the DGGS had “very unique” controls and was different from other plants. NorthWestern was also aware, as the Commission found: (1) “[T]he units need[ed] to change load rapidly” as measured in “MW change per minute,” and that a single engine in operation could “ramp up or down at a rate of at least 15 MW per minute”; (2) “the ability to respond to demand within seconds” was critical to the operational mission of DGGS; and (3) the units could experience unique “thermal stresses,” and that going “from a cold start to a very high temperature” can cause “a lot of distress within rotating equipment.” (Internal quotations in original.) The outage specifically resulted from these known factors. PWPS’s investigation concluded “[o]ver temperatures resulted in reduction of material properties,” “[h]igher motion resulted in higher stress on the affected parts,” and “hardware failures are cycle related.” NorthWestern admitted the ramp rate was “much greater” than NorthWestern had requested due to software configuration and NorthWestern had not installed anything to monitor the actual ramp data on a per-minute basis. In addition, NorthWestern cycled each unit frequently, which PWPS concluded was the cause of the hardware failures. 6 Section 69-8-421(9), MCA, allows the Commission to “disallow rate recovery for the costs that result from the failure of a public utility to reasonably manage, dispatch, operate, maintain, or administer electricity supply resources in a manner consistent with 69-3-201, 69-8-419, and commission rules.” 23 ¶40 The Commission did not commit clear error in finding that NorthWestern had failed to appropriately plan for and operate the DGGS. The Commission’s decision to disallow the outage costs incurred by NorthWestern when the DGGS went offline was well within its authority to determine whether those costs were “prudently incurred.” Section 69-8-210(1), MCA. Accordingly, the Commission’s order regarding the outage costs is affirmed. ¶41 2. Were the “free ridership” and “spillover” calculations adopted by the Commission supported by substantial evidence? ¶42 NRDC and HRC argue that the Commission erred when it adopted the free ridership and spillover values presented in Dr. McRae’s draft report when she, as the only witness to testify on the subject, repudiated those very numbers in her testimony. This, they argue, was clearly erroneous because there is no evidence in the record supporting the use of those numbers. ¶43 Citing problems with the methodology, the SBW final report concluded that the actual calculations for free ridership and spillover should not be used. SBW concluded that the best approach was to assume the numbers perfectly offset each other. Dr. McRae echoed this conclusion in her testimony before the Commission. ¶44 However, NRDC and HRC are incorrect to argue that there was no testimony regarding actual free ridership and spillover calculations. When pressed on her conclusions, Dr. McRae hedged her testimony in several ways. First, Dr. McRae stated affirmatively that actual free ridership and spillover calculations were conducted using “national common practices, and best practices,” and that the actual data derived was 24 “comparable to those found for similar programs conducted by other respected program evaluators.” ¶45 Second, Dr. McRae testified her opinion of the state of the science is that she simply cannot know what the actual values are, including the 1.0 NTG she suggested the Commission adopt. “I would say that’s not possible with any methods that I know to know what they [free ridership and spillover] are.” Regarding whether there was actual, hard data to support her conclusion for a 1.0 NTG, Dr. McRae testified there was no way to prove or disprove her conclusion: If you take 1.0 as the null hypothesis that these effects are offsetting, then, I think the burden is—especially if you’re going to be in a lost revenue calculation or something like that, I think the burden of proof is to say, no, these aren’t offsetting. These savings would have happened anyway. . . . I don’t think we have a way of saying that the null hypothesis is rejected, that it’s anything other than what 1.0. And if you want to say for argument’s sake it’s [0].9, well, then for argument’s sake why don’t we say it’s 1.1. (Emphasis added.) When asked why 1.0 would be used instead of 0.9 or 1.1, Dr. McRae responded: “in the absence of any other information, you just assume one is positive and one is negative; they’re offsetting. That’s how I think of it.” ¶46 The Commission was faced with: (1) an expert’s conclusion that one cannot know the precise spillover and free ridership numbers; and (2) testimony stating they could neither prove nor disprove that given hypothesis. The same expert provided a range of hypothetical values from 0.9 to 1.1 and provided anecdotal evidence of other states using a 0.9, while some used 1.0. Finally, the expert admitted the only hard research available 25 in the proceeding was done according to best practices and was comparable with that done by other respected researchers. ¶47 Our role is not to re-weigh the evidence, but rather, to determine if substantial evidence existed “and not whether, on the same evidence, [we] would have arrived at the same conclusion.” Johnson v. W. Transp., LLC, 2011 MT 13, ¶ 18, 359 Mont. 145, 247 P.3d 1094 (citing Ward v. Johnson, 242 Mont. 225, 228, 790 P.2d 483, 485 (1990)). We hold the Commission’s facts were supported by substantial evidence. The actual data collected by Dr. McRae and SBW provided a 0.908 NTG, which falls in the range of hypothetical values provided by the expert. It is also in the range of values used by other commissions, as testified to by Dr. McRae. Dr. McRae admitted there was no actual, hard data to support her conclusion that the values perfectly offset each other. And, finally, the only hard data available was collected per best practices and was consistent with the research done by other respected firms. ¶48 As an administrative agency, the Commission’s “experience, technical competence, and specialized knowledge may be utilized in the evaluation of evidence.” Section 2-4-612(7), MCA. The Commission had substantial evidence to rely upon and it appropriately used is expertise to evaluate that evidence. As such, the Commission’s determination to adopt the calculated values for free ridership and spillover is affirmed. ¶49 For the foregoing reasons, the Commission’s Order No. 7219h is affirmed. /S/ JIM RICE 26 We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

September 27, 2016

345bd06e-3349-4d94-91b4-0ca655c13f68

Boyce v. Carpet Plus

2016 MT 258N

DA 16-0034

Montana

Montana Supreme Court

DA 16-0034 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 258N SHARON BOYCE and KYEANN SAYER, Plaintiffs and Appellants, v. CARPET PLUS, INC. d/b/a ABBEY CARPET & FLOOR, CURTIS BOWLER and MARTY JOHNSON d/b/a MARTY JOHNSON, LLC, Defendants and Appellees. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV-10-994 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellants: Sharon R. Boyce (Self-Represented), Missoula, Montana Kyeann Sayer (Self-Represented), Ewa Beach, Hawaii For Appellee Carpet Plus and Curtis Bowler: Gerry P. Fagan, Adam Warren, Moulton Bellingham PC, Billings, Montana For Appellee Marty Johnson: Patrick M. Sullivan, Poore, Roth & Robinson, P.C., Butte, Montana Submitted on Briefs: September 14, 2016 Decided: October 11, 2016 Filed: __________________________________________ Clerk 10/11/2016 Case Number: DA 16-0034 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Boyce and Sayer (Homeowners) brought this action in 2010 seeking property damages arising from Defendants’ (hereinafter Abbey’s) 2008 installation of flooring and carpeting in the house they occupied in Missoula. At that time the residence was owned by Tupi Plain, LLC. Homeowners also sought personal injury damages for “toxic poisoning” that they claimed was caused by the finishing materials used on the flooring. All Defendants filed motions for summary judgment and in December 2015 the District Court granted the motions. Homeowners appeal and we affirm. ¶3 The District Court determined that the Homeowners lacked standing to prosecute the property damage claims because they did not own the property at the time the claims arose in 2008. Tupi Plain LLC owned the property in 2008 and also in 2010 when this action was filed, but it is not a party to this action. The District Court determined that the property damage claims belonged solely to Tupi Plain, not to the individual Homeowners. Lewis v. Puget Sound Power & Light, 2001 MT 145, ¶ 17, 306 Mont. 37, 29 P.3d 1028; § 35-8-701, MCA. The individual Homeowners cannot bring an action on 3 behalf of the LLC. H & H Development v. Ramlow, 2012 MT 51, ¶ 18, 364 Mont. 283, 272 P.3d 657. ¶4 The District Court next considered Homeowners’ failure to warn claim, which arises from their contention that the finishing materials used on the floors were unreasonably hazardous to their health. The District Court found that determining whether the materials were dangerous to human health was beyond the common experience of jurors and therefore required the support of expert testimony. The District Court found that Homeowners had not placed any competent expert opinion in the record, and that their own testimony as to their symptoms was not sufficient to overcome a motion for summary judgment. Disler v. Ford Motor Co., 2000 MT 304, ¶¶ 9-10, 302 Mont. 391, 15 P.3d 864. Therefore, the District Court determined that Homeowners had not met their burden to respond to Abbey’s motion for summary judgment. ¶5 Last, the District Court considered the motion for summary judgment on behalf of the individual Defendants on the ground that they were acting within the course and scope of their employment with Abbey’s and were therefore shielded from personal liability. The District Court noted that Homeowners specifically alleged that the individuals were acting within the course and scope of their employment at the time of the events at issue and that this provided them with a narrow shield from personal liability. Sherner v. Nat. Loss Control Serv., 2005 MT 284, ¶¶ 25-26, 329 Mont. 247, 124 P.3d 150. ¶6 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion 4 of the Court, this case presents questions controlled by settled law which the District Court properly applied. ¶7 Affirmed. /S/ MIKE McGRATH We Concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

October 11, 2016

b2082fa9-942e-4c38-87dd-b0e81fa72be7

Junkermier, Clark, Campanella, Stevens, P.C. v. Alborn, Uithoven, Riekenberg, P.C.

2016 MT 218

DA 15-0605

Montana

Montana Supreme Court

DA 15-0605 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 218 JUNKERMIER, CLARK, CAMPANELLA, STEVENS, P.C., a Montana Professional Corporation, Plaintiff and Appellant, v. ALBORN, UITHOVEN, RIEKENBERG, P.C., a Montana Professional Corporation, TERRY ALBORN, PAUL UITHOVEN, CHRISTINA RIEKENBERG, JOE BATESON, and SHERM VELTKAMP, Defendants and Appellees. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV 13-736C Honorable George Huss, Presiding Judge COUNSEL OF RECORD: For Appellant: Kirk D. Evenson (argued), Thomas A. Marra, Marra, Evenson & Bell, P.C., Great Falls, Montana For Appellees: Michael J. Lilly (argued), Bridget W. leFeber, Berg, Lilly & Tollefsen, P.C., Bozeman, Montana For Amici: Amy D. Christensen, Christensen & Prezeau, PLLP, Helena, Montana Argued and Submitted: June 8, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 15-0605 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Junkermier, Clark, Campanella, Stevens, P.C. (Junkermier) lost its Bozeman branch office after all but one of its Bozeman shareholders decided to start their own firm, taking most of Junkermier’s clients with them. Junkermier sought to enforce a contractual covenant restricting competition, but the Eighteenth Judicial District Court held the agreement unenforceable. The court also rejected Junkermier’s claim for damages against some of the Appellees for breach of fiduciary duty.1 We consider the following issues on appeal: 1. Whether the District Court erred by failing to analyze the reasonableness of the covenant because it concluded that the underlying contract was unenforceable. 2. Whether the District Court erred in concluding that only one Former Shareholder breached a fiduciary duty and that Junkermier failed to prove awardable damages from that breach. ¶2 We reverse in part and remand. PROCEDURAL AND FACTUAL BACKGROUND ¶3 Junkermier is a Montana accounting firm based in Great Falls, with offices in other Montana cities that it has acquired through merger or acquisition. Junkermier merged with the Bozeman accounting firm of Veltkamp, Stannebein, and Bateson, P.C. (Veltkamp Firm) in 2002. At the time of the merger, the Veltkamp Firm had four 1 Appellees are Alborn, Uithoven, Riekenberg, P.C., Terry Alborn, Paul Uithoven, Christina Riekenberg, Joe Bateson, and Sherm Veltkamp. Alborn, Uithoven, Riekenberg, P.C., does business as Amatics CPA Group and we refer to it as Amatics. We refer to the individual Appellees collectively as Former Shareholders. 3 shareholders—Former Shareholders Uithoven, Bateson, and Veltkamp, and nonparty Harry Stannebein. Under the merger agreement, Junkermier and the Veltkamp Firm equalized their book value and the Veltkamp Firm shareholders received equal value shares of Junkermier. The merger agreement provided that the Veltkamp Firm could be “spun-off” if either party determined within eighteen months that the merger was not in its best interest. Neither party exercised this option. Former Shareholder Riekenberg was a non-shareholder employee at the Veltkamp Firm who became a Junkermier employee and shareholder after the merger. ¶4 Former Shareholder Alborn became a Junkermier shareholder in 1980. He served on Junkermier’s board of directors and, by the spring of 2013, he had been the Junkermier Bozeman office branch manager for nearly ten years. Former Shareholders were five of the six Junkermier shareholders in Junkermier’s Bozeman office and held nearly fifteen percent of Junkermier’s shares. All Junkermier shareholders are subject to a Stock Purchase and Redemption Agreement (Stock Agreement), which requires that shareholders be employed by Junkermier in a professional capacity, restricts the transfer of shares, and details the parties’ obligations regarding the sale and redemption of shares. ¶5 Throughout their employment with Junkermier, Former Shareholders—like all Junkermier shareholders—were employed under the terms of an annual Shareholder’s Employment Agreement (Employment Agreement). The Employment Agreement defines the parties’ various rights and obligations and contains a covenant restricting competition (Covenant) that provides, in part: 4 7. POST-EMPLOYMENT REPRESENTATION OF CLIENTS. If this Agreement is terminated for any reason and Shareholder provides professional services . . . in competition with [Junkermier] the Shareholder agrees as follows: a. To pay to [Junkermier] an amount equal to one hundred percent (100%) of the gross fees billed by [Junkermier] to a particular client over the twelve month period immediately preceding such termination, if the client was a client of [Junkermier] within the twelve month period prior to Shareholder’s leaving [Junkermier’s] employment (hereinafter “particular client”), and the particular client is thereafter within one year of date of termination served by Shareholder, Shareholder’s partners, or any professional services organization employing the Shareholder. . . . f. For purposes of this Section, a Shareholder shall be considered to be in competition with [Junkermier], by providing professional services within the county of the Shareholder’s primary office (the office through which the Shareholder provides the majority of his professional services), or any county contiguous thereto. Under the Employment Agreement, Former Shareholders acknowledged that they were entering into the agreement “with full understanding of the nature and extent covered by the” Covenant, and that they realized that the Employment Agreement “would not be entered into without the [Covenant] contained herein.” ¶6 The Employment Agreement contained also a section entitled “Disclosure of Information.” That section prohibited shareholders from disclosing confidential information—defined to include “lists of [Junkermier’s] clients.” The disclosure term made clear that it applied both during the agreement’s term and “at all times after the termination of employment with [Junkermier].” The Employment Agreement specified 5 further that any and all confidential information was “the sole and exclusive property of [Junkermier].” ¶7 Under the Employment Agreement, Junkermier agreed “to compensate the Shareholder at a mutually agreeable amount.” The agreement specified further that Former Shareholders would be paid a salary “pursuant to the policies and procedures contained in the [Junkermier] Employee Manual.” Former Shareholders were paid a base salary by Junkermier and they also received bonuses when approved by the board of directors, typically on an annual basis. ¶8 The Employment Agreement’s term would “expire one (1) year from the date of execution.” It also could be terminated upon the happening of certain specified events. The Employment Agreement provided further that it could be extended for a one-year term by Junkermier on written notice. ¶9 In June 2012, Former Shareholders were notified that Junkermier was exercising its option to extend the terms of their most recent Employment Agreements through June 30, 2013. In the spring of 2013, Former Shareholders began discussing splitting from Junkermier due to various frustrations with the firm. Former Shareholders retained an attorney, who suggested that the Covenant was not enforceable. In early June 2013, Former Shareholders met with a consultant to get advice about splitting from Junkermier. ¶10 Around that same time, Former Shareholders informed Junkermier CEO Jerry Lehman in writing that they wanted to discuss leaving Junkermier. Shortly after, the majority of Former Shareholders met with Lehman. Lehman then informed the other 6 Junkermier shareholders that Former Shareholders intended to leave. He called a special meeting of the shareholders to discuss the topic. At that meeting the other Junkermier shareholders appointed a committee to negotiate the details of Former Shareholders’ split from the firm. The committee and Former Shareholders discussed a transition; each side made proposals regarding the Bozeman office’s clients, but they never reached an agreement. On June 20, 2013, Lehman met with the Bozeman office employees and informed them that Former Shareholders were leaving. Also that same day, Junkermier sent all the Bozeman office employees a “COBRA Election Notice” informing them that their employment would end on June 30, 2013. ¶11 The last week of June 2013, Former Shareholder Alborn prepared a “to do list” assigning various tasks to Former Shareholders and other Bozeman office employees relating to forming the new Amatics accounting firm, and filed articles of incorporation for Amatics. Former Shareholders worked for Junkermier until June 30, 2013. The next day, Former Shareholders and almost all of the Junkermier Bozeman staff began work at Amatics. Amatics ran a full-page advertisement that same day in the Bozeman Daily Chronicle announcing its formation and new location. The ad stated that Amatics had “evolved” from Junkermier. ¶12 Prior to Former Shareholders’ leaving Junkermier, a Junkermier employee downloaded a copy of Junkermier’s Bozeman client list at Former Shareholder Alborn’s request. The client list was taken to a local printing shop to print letters to the clients. On its first day of business, Amatics sent the letters to all of the clients on the 7 downloaded client list informing them about the split from Junkermier. The letter included a document that asked the clients to choose whether they wanted to continue their relationship with Junkermier or to continue their relationship “with the Shareholders and staff of the former [Junkermier] Bozeman office, now known as [Amatics].” Junkermier sent its own letter to the Bozeman clients informing them of the changes in the office in mid-July. Ultimately, about 2,100 of the 2,400 clients on the client list transferred their accounting work from Junkermier to Amatics. A significant number of these clients had preexisting relationships with Former Shareholders Uithoven, Bateson, Veltkamp, and Riekenberg from their days at the Veltkamp Firm. ¶13 Following the split, Junkermier filed a complaint to declare the Covenant enforceable and to recover damages. The complaint included claims for breach of contract and breach of fiduciary duty against Former Shareholders. Pursuant to the Covenant, Junkermier sought 100% of the gross fees that Junkermier billed in fiscal year 2013 to clients that were serviced by Amatics in fiscal year 2014. The complaint originally named a number of other defendants who had left Junkermier’s Bozeman office, but they were voluntarily dismissed, leaving Former Shareholders and Amatics as the only defendants. Former Shareholders asserted statutory wage, breach of contract, and breach of the implied covenant of good faith and fair dealing counterclaims that eventually also were dismissed. ¶14 On the parties’ cross-motions for summary judgment, the District Court held that the Employment Agreement was unenforceable because it was merely an agreement to 8 agree and also was a contract of adhesion. The court concluded, however, that there were issues of material fact regarding the breach of fiduciary duty claim. It set a bench trial to resolve the issue. ¶15 Following three days of trial, the District Court determined that Junkermier is not a closely held corporation and concluded that Former Shareholders, other than Alborn, owed no legal duty to Junkermier. The court concluded that Alborn breached his fiduciary duty to Junkermier. The court held, however, that Alborn was not liable for damages because Junkermier failed to prove damages by substantial evidence. Junkermier appeals the District Court’s summary judgment and trial rulings. STANDARDS OF REVIEW ¶16 We review summary judgment rulings de novo. Garza v. Forquest Ventures, Inc., 2015 MT 284, ¶ 11, 381 Mont. 189, 358 P.3d 189. 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); Garza, ¶ 11. If this burden is met, the burden shifts to the nonmoving party to establish with substantial evidence—as opposed to mere denial, speculation, or conclusory assertions—that a genuine issue of material fact does exist or that the moving party is not entitled to judgment as a matter of law. Garza, ¶ 11. ¶17 We review a district court’s findings of fact to determine if they are clearly erroneous. M. R. Civ. P. 52(a)(6); Letica Land Co., LLC v. Anaconda-Deer Lodge Cnty., 2015 MT 323, ¶ 13, 381 Mont. 389, 362 P.3d 614. A finding is clearly erroneous if it is 9 not supported by substantial evidence, if the district court misapprehended the effect of the evidence, or if our review of the record convinces us that the district court made a mistake. Letica Land Co., LLC, ¶ 13. We review a district court’s conclusions of law to determine if they are correct. Letica Land Co., LLC, ¶ 13. DISCUSSION ¶18 1. Whether the District Court erred by failing to analyze the reasonableness of the Covenant because it concluded that the underlying contract was unenforceable. ¶19 The District Court acknowledged that in order to be considered reasonable, a covenant not to compete must meet each of three factors that we articulated in Dobbins, De Guire & Tucker, P.C. v. Rutherford, MacDonald & Olson, 218 Mont. 392, 708 P.2d 577 (1985) (hereafter Dobbins). The court concluded that while there were genuine factual issues as to some of the Dobbins elements, the Employment Agreement as a whole was not enforceable. Relying on cases from other jurisdictions, the court concluded that the amount of compensation is an essential term in a contract for services. Because the Employment Agreement did not specify the amount of compensation, or provide a “formula, mode, or provision” for determining compensation, the District Court determined that the agreement was an unenforceable agreement to agree. The court concluded further that the Employment Agreement was unenforceable because it was a contract of adhesion. The court thus held that the Covenant was unenforceable because the Employment Agreement was unenforceable. 10 A. Junkermier’s arguments pertaining to the Employment Agreement’s enforceability ¶20 Former Shareholders contend that Junkermier did not respond to their summary judgment arguments that the Employment Agreement lacked an adequate compensation term and was only an agreement to agree. Because it was Junkermier’s duty to respond as the party opposing the motion, Former Shareholders claim that the District Court had no duty to develop arguments on Junkermier’s behalf. The District Court adopted Former Shareholders’ position and granted summary judgment to them in large part because Junkermier failed to address the arguments. Former Shareholders contend that Junkermier cannot now raise the arguments it failed to raise with the District Court. ¶21 In response, Junkermier claims that it specifically addressed the issues of compensation and whether the Employment Agreement was an agreement to agree. As such, Junkermier argues that its arguments are properly before this Court on appeal. ¶22 A review of the record demonstrates that although Junkermier did not develop the argument, it did address briefly Former Shareholders’ claims regarding the issues of compensation and agreements to agree both in its briefing and in oral arguments before the District Court on summary judgment. Either way, Junkermier’s alleged failure to respond to Former Shareholders’ arguments did “not relieve the District Court of the duty to engage in a Rule 56 analysis when presented with [Former Shareholders’] motion for summary judgment.” Chapman v. Maxwell, 2014 MT 35, ¶ 11, 374 Mont. 12, 322 P.3d 1029. Thus, the District Court was required to look beyond the parties’ briefs in concluding on summary judgment that the Employment Agreement was unenforceable. 11 M. R. Civ. P. 56(c)(3); Chapman, ¶ 11. We do the same in our de novo review of the District Court’s conclusion that the Employment Agreement was unenforceable. B. The Employment Agreement’s enforceability ¶23 Junkermier contends that the District Court’s ruling is wrong because the “amount of the salary is not the consideration for the [Covenant], the employment itself is.” Junkermier claims that the Employment Agreement was an enforceable contract, supported by adequate consideration, because Former Shareholders had employment and they had been compensated for their work through the end of their employment. Junkermier points out that Former Shareholders admitted as much in their counterclaims when they asserted that the parties mutually agreed upon a compensation amount and that they were compensated for their employment at Junkermier. Junkermier accordingly claims that the agreement was not merely an agreement to agree. ¶24 Junkermier contends also that the District Court erred in determining that the Employment Agreement was a contract of adhesion because Former Shareholders were not just Junkermier employees, but officers, shareholders, and a director. The Employment Agreement, Junkermier maintains, was effectively an agreement that Former Shareholders entered into with themselves as owners of Junkermier. Junkermier contends that Former Shareholders’ bargaining power precludes a conclusion that the Employment Agreement was an adhesion contract. ¶25 Former Shareholders counter that the Employment Agreement’s compensation term does not include the amount of compensation or a mode or means to calculate it. 12 Therefore, Former Shareholders claim that the agreement does not include all of an employment contract’s essential terms and therefore is unenforceable. Former Shareholders argue that the Employment Agreement is merely an agreement to agree because it left the compensation to be determined later. Former Shareholders also contend that the Employment Agreement is a contract of adhesion because they “had no meaningful choice in signing” the agreement, they were in a weaker bargaining position, and the agreement’s terms are more favorable to Junkermier. I. Whether the Employment Agreement was an agreement to agree ¶26 “Both the existence of a contract and its interpretation are questions of law which we review for correctness.” Hurly v. Lake Cabin Dev., LLC, 2012 MT 77, ¶ 14, 364 Mont. 425, 276 P.3d 854. In order to be binding, “[a] contract must contain all its essential terms.” Hurly, ¶ 17 (citation and internal quotations omitted). A contract’s essential elements include “a sufficient cause or consideration.” Section 28-2-102(4), MCA. ¶27 Consideration is: Any benefit conferred or agreed to be conferred upon the promisor by any other person, to which the promisor is not lawfully entitled, or any prejudice suffered or agreed to be suffered by the person, other than prejudice that the person is at the time of consent lawfully bound to suffer, as an inducement to the promisor is a good consideration for a promise. Section 28-2-801, MCA. In other words, “[c]onsideration requires that the contracting parties, each as to the other, confer some legal benefit and/or incur some detriment as an inducement to performance.” State Pub. Employee’s Ass’n v. Office of the Governor, 271 13 Mont. 450, 455, 898 P.2d 675, 678 (1995) (citing § 28-2-801, MCA); accord Larson v. Green Tree Fin. Corp., 1999 MT 157, ¶ 26, 295 Mont. 110, 983 P.2d 357 (“When an agreement contains a bargained-for exchange in legal positions between parties, the agreement becomes a legally enforceable contract.”). “A written instrument is presumptive evidence of consideration.” Section 28-2-804, MCA. ¶28 The written Employment Agreement “contains a bargained-for exchange in legal positions between [the] parties.” Larson, ¶ 26. Former Shareholders agreed to provide professional accounting services on behalf of Junkermier, and Junkermier agreed to employ Former Shareholders to provide those professional services. The Employment Agreement specifies the parties’ performance obligations to each other: Junkermier would employ and compensate Former Shareholders, and Former Shareholders would provide professional services, would not disclose confidential information, and would not compete without paying liquidated damages. And, to quote Former Shareholders’ counterclaims, the Stock Agreement and the Employment Agreement “were interdependent. The execution of one of the Agreements was consideration for the execution of the other Agreement.” (Emphasis added.) Not only was each Former Shareholder paid a salary, each was issued stock in Junkermier as called for by the Stock Agreement once he or she became an employee under the Employment Agreement. Clearly, Junkermier and Former Shareholders, “each as to the other, confer[red] some legal benefit and/or incur[red] some detriment as an inducement to performance.” State Pub. Employee’s Ass’n, 271 Mont. at 455, 898 P.2d at 678. 14 ¶29 We are unpersuaded by Former Shareholders’ contention that the Employment Agreement is unenforceable because it does not include the amount of compensation or a mode or means to calculate compensation. Former Shareholders correctly assert that an “agreement that requires the parties to agree to material terms in the future is not an enforceable agreement.” GRB Farm v. Christman Ranch, Inc., 2005 MT 59, ¶ 11, 326 Mont. 236, 108 P.3d 507. Former Shareholders, however, cite no cases in which we have held that the amount of compensation, or a means or mode of calculating compensation, is a mandatory term in an employment contract. ¶30 A contract “must be complete and certain in all essential matters included within its scope.” Steen v. Rustad, 132 Mont. 96, 106, 313 P.2d 1014, 1020 (1957). Thus, the Employment Agreement could not be enforced if its terms were “not sufficiently certain to make the precise act which [was] to be done clearly ascertainable.” GRB Farm, ¶ 11 (citation and internal quotations omitted); accord Steen, 132 Mont. at 106, 313 P.2d at 1020 (concluding that in order for a contract to be enforceable “[n]othing must be left to conjecture or surmise, or be so vague as to make it impossible for the court to glean the intent of the parties from the instrument, or the acts sought to be enforced”). On the other hand, “absolute certainty and completeness in every detail is not a prerequisite of specific performance, only reasonable certainty and completeness being required.” Steen, 132 Mont. at 106, 313 P.2d at 1020. 15 ¶31 The parties’ intent in entering into the Employment Agreement is clear— Junkermier agreed to employ Former Shareholders, and Former Shareholders agreed to be employees of Junkermier. Under the Employment Agreement’s “Compensation” term, Former Employees would be compensated a “monthly salary (less applicable withholdings) . . . pursuant to the policies and procedures contained in the [Junkermier] Employee Manual.” That Junkermier and Former Shareholders settled upon a base salary and that Junkermier paid Former Shareholders that base salary demonstrate that the parties “mutually agree[d]” to a compensation amount per the Employment Agreement. The employee manual—explicitly incorporated in the Employment Agreement— conferred additional benefits to Former Shareholders and specified additional performance obligations between the parties. The Stock Agreement—which was “interdependent” with the Employment Agreement—substantiates that the scope of the parties’ contractual relationship was “complete and certain in all essential matters.” Steen, 132 Mont. at 106, 313 P.2d at 1020. Although the parties did not fix a specific compensation amount, “there was sufficient information provided in the contract to make the parties’ obligations ‘clearly ascertainable.’” Hurly, ¶ 21 (quoting GRB Farm, ¶ 11). ¶32 We do not have to surmise the mutual obligations in the Employment Agreement. Its promise and acceptance of employment are sufficient consideration to establish an essential term of a contract. The District Court erred in declaring the Employment Agreement an unenforceable agreement to agree. 16 II. Whether the Employment Agreement was a contract of adhesion ¶33 The fundamental tenet of “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.” Arrowhead Sch. Dist. No. 75 v. Klyap, 2003 MT 294, ¶ 20, 318 Mont. 103, 79 P.3d 250. A court will find a contract unconscionable, however, “if the bargaining process itself had some inherent unfairness that actually prevented the contract from being freely negotiated and thus defeated the principle of freedom of contract.” Arrowhead Sch. Dist. No. 75, ¶ 49. A contract is unconscionable if: (1) it is a contract of adhesion, and (2) the contractual terms unreasonably favor the drafter. Arrowhead Sch. Dist. No. 75, ¶ 48. Here, the District Court found that the Employment Agreement was a contract of adhesion; we therefore analyze the unconscionability inquiry’s first factor. ¶34 A contract of adhesion is “a standard form contract prepared by one party, to be signed by the party in a weaker position (usually a consumer), who adheres to the contract with little or no choice about its terms.” Graziano v. Stock Farm Homeowner’s Ass’n, 2011 MT 194, ¶ 18, 361 Mont. 332, 258 P.3d 999 (citation omitted). “Disparity in bargaining power is an essential element of a contract of adhesion.” Day v. CTA, Inc., 2014 MT 119, ¶ 10, 375 Mont. 79, 324 P.3d 1205. Yet, mere disparity “in bargaining power does not equate to unenforceability and not all standardized contracts are unenforceable as adhesion contracts.” Denton v. First Interstate Bank of Commerce, 2006 MT 193, ¶ 33, 333 Mont. 169, 142 P.3d 797. 17 ¶35 Granted, the Employment Agreement was a standard form contract—each Junkermier shareholder signed the same Employment Agreement. Missing, however, is the essential disparity in bargaining power between the parties. For starters, Former Shareholders are not “unsophisticated and unsuspecting ordinary citizens” entering into a contract “as part of the intercourse of daily life.” Kloss v. Edward D. Jones & Co., 2002 MT 129, ¶ 55, 310 Mont. 123, 54 P.3d 1. Rather, they are “sophisticated business person[s]” who entered into contracts to which they had been subject the entire time they worked at Junkermier. Denton, ¶ 33. Former Shareholders point to no evidence that shows that they “required specific protection or [were] improvident in [their] business dealings.” Denton, ¶ 33. To the contrary, the evidence shows that Former Shareholders all have extensive accounting experience and were sophisticated and shrewd enough to form and run a new accounting firm. ¶36 In addition, Former Shareholders were not merely Junkermier employees—they owned nearly fifteen percent of Junkermier’s shares at the time they left; Former Shareholder Bateson was on Junkermier’s board of directors immediately prior to the split; and Former Shareholder Alborn was on Junkermier’s board of directors from 2006- 2012 and was the branch manager for Junkermier’s Bozeman office at the time of the split. Former Shareholders’ bargaining power is readily distinguishable from the disparity between parties in cases recognizing adhesion contracts. E.g., Kelker v. Geneva-Roth Ventures, Inc., 2013 MT 62, ¶ 31, 369 Mont. 254, 303 P.3d 777 (concluding that “[n]o doubt exists that [a payday lending company] afforded [a 18 consumer] no opportunity to negotiate the terms of the [payday loan] contract”); Woodruff v. Bretz, Inc., 2009 MT 329, ¶¶ 9-10, 353 Mont. 6, 218 P.3d 486 (concluding that a purchase contract between a consumer and a motor home dealer “easily falls within” the adhesion contract definition in part because the consumer “was the weaker party to the transaction” and had a “‘relative lack of sophistication’”); Kloss, ¶¶ 27, 37 (concluding that agreements between a financial service provider and “a 95 year old widow with no bargaining power and a relative lack of sophistication in such matters” were “clearly contracts of adhesion”). ¶37 The fact that Former Shareholders Uithoven, Bateson, and Veltkamp were involved in the merger between Junkermier and the Veltkamp Firm in 2002 casts further doubt on Former Shareholders’ contentions that the Employment Agreement was an adhesion contract. Former Shareholder Bateson testified that he participated in the merger negotiations and “did the due diligence” for the merger. The merger agreement’s terms explicitly provided, “Each employee of [the Veltkamp Firm] that remains in the employ of [Junkermier] shall sign both an Employment Agreement and Confidentiality Agreement.” Junkermier’s CEO during the merger, Robert Nebel, testified that the Veltkamp Firm reviewed the Employment Agreement during the merger negotiations. The merger agreement provided further that the former Veltkamp Firm members had the option of splitting from Junkermier within eighteen months of its effective date if they “determine[d] that [the] Merger [was] not in their best interest.” Former Shareholders Uithoven, Bateson, and Veltkamp did not determine that the Employment Agreement 19 was not in their best interest during the eighteen months they were subject to it and could have opted out. They therefore had a “meaningful choice regarding [the Employment Agreement’s] acceptance.” Highway Specialties, Inc. v. State, 2009 MT 253, ¶ 16, 351 Mont. 527, 215 P.3d 667 (concluding that an adhesion contract is one in which “the weaker bargaining party had no meaningful choice regarding its acceptance”). ¶38 We conclude that the District Court erred in determining that the Employment Agreement was an unenforceable adhesion contract. The Employment Agreement is an enforceable contract. C. The Covenant ¶39 Contracts that restrain trade are “strongly disfavor[ed].” Access Organics, Inc. v. Hernandez, 2008 MT 4, ¶ 17, 341 Mont. 73, 175 P.3d 899. Consequently, covenants are to be construed “strictly” and “in favor of rather than against the interest of the” party who is subject to the covenant. Access Organics, Inc., ¶ 17 (citation and internal quotations omitted). Covenants that act as an absolute prohibition on trade—absent an express statutory exception—are void. Section 28-2-703, MCA; Mungas v. Great Falls Clinic, LLP, 2009 MT 426, ¶¶ 37-38, 354 Mont. 50, 221 P.3d 1230. Yet, when “a contract contains a restraint on a person’s ability to practice their profession, but such restraint is not an absolute prohibition,” a determination must be made as to the covenant’s reasonableness. Mungas, ¶ 39. ¶40 Here, the District Court concluded, and we agree, that the Covenant only partially restrains trade. The Covenant is not an absolute prohibition on Former Shareholders’ 20 right to engage in their profession. Nor does it prohibit them from competing with Junkermier. Rather, the Covenant requires Former Shareholders to pay liquidated damages if they provide services to a Junkermier client within one year of their departure from the firm. Because the Covenant is not an absolute prohibition, it cannot be declared invalid as a matter of law. Mungas, ¶ 38. Rather, when a covenant only partially restrains trade, we have repeatedly examined the following factors, articulated in Dobbins, to determine the reasonableness of an employment agreement’s covenant not to compete: 1) The covenant should be limited in operation either as to time or place; 2) the covenant should be based on some good consideration; and 3) the covenant should afford a reasonable protection for and not impose an unreasonable burden upon the employer, the employee or the public. E.g., Mungas, ¶ 39; Access Organics, Inc., ¶ 16; Mont. Mt. Prods. v. Curl, 2005 MT 102, ¶ 11, 327 Mont. 7, 112 P.3d 979; Daniels v. Thomas, Dean & Hoskins, Inc., 246 Mont. 125, 144, 804 P.2d 359, 370 (1990); State Medical Oxygen & Supply v. American Medical Oxygen Co., 240 Mont. 70, 74, 782 P.2d 1272, 1275 (1989); Dobbins, 218 Mont. at 397, 708 P.2d at 580. The Dobbins test “requires a balancing of the competing interests of the public as well as the employer and employee” in order to determine whether a covenant constitutes a restraint on trade prohibited by § 28-2-703, MCA. Dobbins, 218 Mont. at 397, 708 P.2d at 580. ¶41 Junkermier asserts that the District Court erred by not determining whether the Covenant was reasonable under Dobbins and its progeny. Junkermier contends that the 21 Covenant is similar to other covenants that this Court has determined are partial restraints on trade. Junkermier asserts that the Covenant satisfies the Dobbins test as a matter of law because the Covenant was limited as to both time and place, it was based on consideration, and the Covenant serves a legitimate business interest. Accordingly, Junkermier asserts that the Covenant is reasonable and should have been enforced. ¶42 Former Shareholders contend first that the Covenant does not apply because the Employment Agreement expired by its terms. Given the use of the terms “terminated” and “expired” in the Employment Agreement, the common meaning of the terms, and Junkermier’s own interpretation of the terms, Former Shareholders argue that this Court should construe the Covenant to be applicable only if Junkermier terminated the Employment Agreement. Former Shareholders contend next that questions of fact prevent a conclusion that the Covenant was supported by adequate consideration or that it was reasonable. Finally, Former Shareholders allege that Junkermier did not have a legitimate business interest in the Covenant because its actions following Former Shareholders’ departure demonstrate that the Covenant was not necessary to protect its goodwill, customer relations, and trade information. ¶43 Both parties rely on Wrigg v. Junkermier, Clark, Campanella, Stevens, P.C., 2011 MT 290, 362 Mont. 496, 265 P.3d 646, to support their respective arguments regarding the Covenant’s reasonableness. In Wrigg, an accountant who was subject to the same Junkermier covenant at issue here was informed that her employment agreement would not be renewed. Wrigg, ¶¶ 5-6. The “dispositive issue” in Wrigg was whether an 22 employer could “enforce a covenant not to compete when the employer ends the employment relationship”—an issue that had not yet been addressed by this Court. Wrigg, ¶¶ 2-3, 40. We held squarely that our analysis of a covenant’s enforceability “applies to both a terminated contract and an expired contract.” Wrigg, ¶ 42. We concluded that “[w]hether [Junkermier] terminated the [contract], or it expired under its own terms, proves immaterial to our analysis.” Wrigg, ¶ 42. The District Court correctly rejected Former Shareholders’ contentions that the Covenant does not apply here because the Employment Agreement expired and was not terminated. The “interdependent” Stock Agreement also helps to show that whether the Employment Agreement expired or was terminated by one party, both parties retained continuing obligations to each other. That agreement required Junkermier to redeem Former Shareholders’ shares after they retired, “whether voluntary or otherwise,” or began working at another accounting firm. None of these obligations under the Stock Agreement, nor of those under the Covenant, would materialize unless and until the employment relationship was severed. Former Shareholders’ claims that the Employment Agreement’s expiration terminated the obligations between them and the firm are inconsistent and we reject their argument. ¶44 We considered in Wrigg our statement in Dobbins that a covenant must “reasonably be related to a ‘legitimate business interest.’” Wrigg, ¶ 22 (quoting Dobbins, 218 Mont. at 397, 708 P.2d at 580). We made that observation in Dobbins while analyzing the “essential” components of a reasonable covenant. Dobbins, 218 Mont. at 396-97, 708 P.2d at 580. We said, 23 in the absence of a controlling statute the enforceability of a covenant not to compete, ancillary to the withdrawal of a partner from an accounting firm, depends upon whether the restriction is reasonably related to the legitimate business interest of the remaining partners and is not unduly burdensome to the covenantor or the public. Dobbins, 218 Mont. at 397, 708 P.2d at 580. ¶45 In the context of Wrigg—where it was the employer who terminated the employment relationship—we highlighted “the requirement that an employer must establish a legitimate business interest” in order for a covenant to be enforceable. Wrigg, ¶ 22. We observed that “a legitimate business interest [is] an interest that must necessarily be enforced to protect the basis of the employer’s bargain.” Wrigg, ¶ 24 (citing Restatement (Second) of Contracts § 188 cmt b. (1981)). Because an employee has “little disincentive” to take “economic advantage of his employer[,] [a] covenant may be necessary . . . to prevent an employee from exploiting his employment to later compete and capture the employer’s market.” Wrigg, ¶ 25. A covenant protects the employer’s interest against an “employee appropriating valuable trade information, good will, and customer relationships to compete directly against—and take business from— his former employer.” Wrigg, ¶ 24. ¶46 We analyzed cases from various jurisdictions demonstrating that determining whether a covenant serves a legitimate business interest requires the court to weigh a number of factors relating to the employer’s and the employee’s interests. Wrigg, ¶¶ 26-36. We noted that courts enforce covenants when employers demonstrate an interest in protecting themselves from employees who use “customer relationships and 24 information acquired during the employment relationship to compete directly against [their] former employer.” Wrigg, ¶ 26. In contrast, we noted that courts object to covenants when employers cannot demonstrate that a covenant is needed “to protect customer relationships or valuable trade information.” Wrigg, ¶ 28. We opined further that when an employee initiates termination of an employment relationship that is subject to a covenant, the employee’s interests are diminished because “[t]he employee makes an informed decision . . . about the risks associated with a covenant’s enforcement and voluntarily chooses to encounter those risks.” Wrigg, ¶ 31. ¶47 We pointed out in Wrigg that the language of the Dobbins factors “does not explicitly require that an employer possess a legitimate interest in the covenant.” Wrigg, ¶ 22. (Emphasis added.) But when the employer discontinues the relationship, consideration of its legitimate business interest is inherent in the court’s balancing and examination of “the competing interests of the public as well as the employer and employee.” Dobbins, 218 Mont. at 397, 708 P.2d at 580; see Wrigg, ¶ 22 (concluding that establishing a legitimate business is “implicit in the Dobbins analysis”). That balancing process is undertaken within the framework of the Dobbins test. See Myers v. Howmedia Osteonics Corp., 2016 U.S. Dist. LEXIS 42583, 25-27 (D. Mont. 2016) (analyzing under the Dobbins test’s third element whether an employer that terminated the employment relationship had a legitimate interest in a covenant). ¶48 Balancing the Dobbins factors requires a particularized inquiry into the facts and circumstances of a particular case. Daniels, 246 Mont. at 144, 804 P.2d at 370 25 (concluding that “under certain factual circumstances a covenant restraining a lawful profession . . . may be acceptable if it passes” the Dobbins reasonableness analysis). Here, protecting the basis of Junkermier’s bargain may justify restrictions against unfettered access to confidential information and established business relationships by Former Shareholders who, without such a restriction, have no disincentive to take advantage of their former employer. Equally, the court must consider Former Shareholders’ interests in being able to continue their profession and their clients’ ability to maintain the trusted relationships they may have built with their personal accountants. The court must balance the nature of Former Shareholders’ relationships with their clients with the protectable interest in Junkermier’s client base. ¶49 The District Court did not analyze any of these considerations under Dobbins because it held the contract unenforceable. This was error. Such an inquiry is “a factual determination.” Mungas, ¶ 39; accord Daniels, 246 Mont. at 144, 804 P.2d at 370 (concluding that “under certain factual circumstances a covenant . . . may be acceptable if it passes a three part test of reasonableness”). Accordingly, we remand to the District Court to undertake a Dobbins analysis. ¶50 2. Whether the District Court erred in concluding that only one Former Shareholder breached a fiduciary duty and that Junkermier failed to prove awardable damages from that breach. A. Breach of fiduciary duty ¶51 The District Court made a number of determinations in addressing Junkermier’s breach of fiduciary duty claim. First, the court concluded that Junkermier is not a closely 26 held corporation because its ownership and management are not substantially the same. The court grounded this conclusion on its finding that—prior to Former Shareholders leaving—Junkermier had twenty-six shareholders but was governed by a six-member board of directors and was managed by a chief executive officer. The District Court next found that Former Shareholders were unaware that they were considered Junkermier vice-presidents, that none of them were ever assigned any duties as vice-presidents, and that Junkermier’s bylaws required the board to appoint shareholders as vice-presidents, which it failed to do. The court therefore concluded that Former Shareholders were not Junkermier officers and consequently owed no legal duty to Junkermier as officers. Similarly, the court concluded that Former Shareholders did not breach any duties as Junkermier employees prior to the termination of their employment because it found no evidence that Former Shareholders solicited other employees to leave Junkermier, solicited clients to leave Junkermier, or misappropriated any business opportunity of Junkermier. ¶52 The court concluded further that Former Shareholder Bateson did not breach a duty to Junkermier as a director because he had resigned from the board in early June 2013 and there was no evidence that he took any action that could be considered a breach of fiduciary duty prior to that time. The court did conclude, however, that Former Shareholder Alborn breached his duty to Junkermier as a branch manager given that he actively participated in planning the split from Junkermier, created the “to do list,” and directed an employee to download the client list. But the court found that Alborn’s 27 breach of his duty to Junkermier was “largely offset by the subsequent acts of [Junkermier].” ¶53 Junkermier asserts several points of error in these rulings. First, while Junkermier agrees that it is not a statutory close corporation under § 35-9-102, MCA, it asserts that it is a close corporation because its management and ownership are substantially identical and its shares are not publicly traded. As a close corporation, Junkermier contends that Former Shareholders owed fiduciary duties of the “utmost good faith and loyalty” to Junkermier, which they breached by acting for their personal gain. Junkermier contends further that even if it was not a close corporation, the District Court erroneously found that Former Shareholders were not Junkermier officers. Junkermier argues therefore that the District Court erred in concluding that Former Shareholders did not breach their fiduciary obligations as officers. Finally, Junkermier asserts that as employees Former Shareholders owed a duty not to violate Junkermier’s bylaws and agreements. ¶54 Former Shareholders respond that Junkermier is not a close corporation because, contrary to Junkermier’s assertions, such a determination does not “turn on the fact that a corporation’s shares are not publicly traded or are not readily marketable.” Rather, Former Shareholders argue, a close corporation is one in which management and ownership are substantially identical. Former Shareholders emphasize that the court’s determination on this point is supported by substantial evidence, and therefore is not clearly erroneous. Next, Former Shareholders claim that the District Court correctly concluded that they did not owe Junkermier a fiduciary duty as shareholders or as 28 officers. Furthermore, Former Shareholders contend, the District Court did not err in determining that Bateson did not breach a fiduciary duty as a director because, as the court found, he resigned as director in early June and his actions before his resignation were in good faith. Former Shareholders do not cross-appeal the District Court’s conclusion that Alborn breached his fiduciary duty. ¶55 A corporation that does “not elect to become a statutory close corporation under the Montana Close Corporation Act, §§ 35-9-101 et seq., MCA,” still may be considered a close corporation. Warren v. Campbell Farming Corp., 2011 MT 324, ¶ 10, 363 Mont. 190, 271 P.3d 36; accord Daniels, 246 Mont. at 134, 804 P.2d at 364. It is well-established that “[a] close corporation is one in which management and ownership are substantially identical to the extent that it is unrealistic to believe that the judgment of the directors will be independent of that of the stockholders.” Warren, ¶ 27 (quoting Skierka v. Skierka Bros., Inc., 192 Mont. 505, 519, 629 P.2d 214, 221 (1981)) (internal quotations omitted). We have characterized a close corporation relationship as “closely approximat[ing] the relationship between partners.” Daniels, 246 Mont. at 136-37, 804 P.2d at 366 (citing Fox v. 7L Bar Ranch, 198 Mont. 201, 212-13, 645 P.2d 929, 935 (1982)). While “close corporations often utilize share transfer restrictions,” we have underscored that this is “[b]ecause ownership and management are so intimately related in such entities.” Gray v. Harris Land & Cattle Co., 227 Mont. 51, 53, 737 P.2d 475, 476 (1987). The relationship between management and shareholders is therefore the key component in determining whether a corporation is closely-held. See Fox, 198 Mont. at 29 213, 645 P.2d at 935 (citations omitted) (“The enterprise before us is a ‘close corporation’ in the strictest sense, that is, one in which, regardless of the distribution of the shareholdings, ‘management and ownership are substantially identical.’”); see also Warren, ¶ 27; Gray, 227 Mont. at 53, 737 P.2d at 476; Skierka, 192 Mont. at 519, 629 P.2d at 221. ¶56 In determining that Junkermier is not a close corporation, the District Court made the following findings: that Junkermier had twenty-six shareholders but was managed by a CEO and governed by six directors; that Junkermier’s bylaws allowed for twenty-five director positions, but it opted not to have that many directors; and that a major reason for Former Shareholders’ decision to leave Junkermier was because they felt that shareholders had been removed from the firm’s decision-making processes. A review of the record demonstrates that these findings were supported by substantial evidence. Junkermier has not demonstrated clear error in the District Court’s finding that Junkermier’s ownership and management are not substantially the same. Based on that finding, the District Court did not err in concluding that Junkermier is not a close corporation. We affirm its holding that Former Shareholders did not owe Junkermier a fiduciary duty in their capacity as shareholders. Cf. Daniels, 246 Mont. at 136, 804 P.2d at 366 (citation omitted) (concluding that “the fiduciary duty between stockholders of a close corporation is one of the ‘utmost good faith and loyalty’”). ¶57 Junkermier also urges that Former Shareholders owed a fiduciary duty as officers. Section 35-1-236(2), MCA, provides that “[t]he bylaws of a corporation may contain any 30 provision for managing the business and regulating the affairs of the corporation that is consistent with law or the articles of incorporation.” “It is a well[-]established precedent that the bylaws of a corporation . . . constitute a contract between the member and the corporation.” Walker v. Helena Ass’n of Realtors tm, Inc., 2000 MT 343, ¶ 16, 303 Mont. 224, 15 P.3d 414 (quoting Appeal of Two Crow Ranch, Inc., 159 Mont. 16, 23, 494 P.2d 915, 919 (1972)); accord 18A Am. Jur. 2d Corporations § 264 (“The bylaws of a corporation constitute part of a binding broader contract among the directors, officers, and stockholders formed within the statutory framework of the state.”). The interpretation of a contract is a question of law that we review for correctness. Hurly, ¶ 14. ¶58 Junkermier’s bylaws provide that all “shareholders not elected by the board [as other officers] shall be appointed vice-president by the board upon initial receipt of stock.” This provision does not deem shareholders to be officers, but—as the District Court determined—requires “board action” for a shareholder to be appointed an officer of Junkermier. Our review of the record demonstrates that the District Court did not misapprehend the effect of the evidence or make a clear mistake in finding that there were no director meeting minutes evidencing Former Shareholders’ appointment “as vice-presidents upon the initial receipt of their respective stock, or at any other time,” and that Junkermier “offered no evidence of any such board action.” The District Court properly determined that Former Shareholders were not Junkermier officers. We thus affirm its ruling that Former Shareholders did not breach a fiduciary duty as officers. 31 ¶59 Finally, we are unpersuaded by Junkermier’s contention that Former Shareholder Bateson breached a fiduciary duty as a Junkermier director. Montana statute provides general standards of care for directors of corporations. Section 35-1-418, MCA. The standards apply, however, only if the person is acting as a director. Cf. § 35-1-418(4), MCA (“A director is not liable for any action taken as a director . . . if the director performed the duties of the director’s office in compliance with this section.” (Emphasis added)). The District Court therefore concluded correctly that it could consider whether Bateson breached a duty as a director up until the point he resigned from the board in early June 2013. The record supports the District Court’s factual findings that there was no evidence that Bateson breached a fiduciary duty during the time he was a director. We conclude that the District Court did not err in determining that Bateson did not breach a fiduciary duty to Junkermier. ¶60 The District Court likewise did not err in concluding that Former Shareholders— other than Alborn—did not breach any duties as Junkermier employees. The court’s findings that there was no evidence that, prior to leaving Junkermier, Former Shareholders solicited other employees to leave Junkermier, solicited any Junkermier clients, misappropriated any Junkermier trade secrets, or usurped any Junkermier business opportunity are supported by substantial evidence. ¶61 In sum, we conclude that the District Court did not err in determining that only Former Shareholder Alborn breached a fiduciary duty to Junkermier. 32 B. Damages stemming from Alborn’s breach ¶62 The District Court concluded first that under § 27-1-317, MCA, Junkermier had the burden of proving both causation and damages stemming from Alborn’s breach of fiduciary duty. The court concluded further that Junkermier’s damages claims must be supported by substantial evidence and that damages may not be awarded absent such proof. Next, the court found that Junkermier’s damages claims for breach of fiduciary duty were based on the Covenant. The court therefore concluded that “[t]he claim for breach of fiduciary duty cannot be used as a basis for attempting to recover damages specified in an unenforceable contract.” Finally, the court determined that Junkermier’s damages claim—which the court characterized as 100% of gross fees billed under the Covenant—was not a proper measure of damages because it represented Junkermier’s loss of anticipated gross income, was predicated on gross receipts of business, and was the “product of a mere guess or speculation.” Accordingly, the District Court concluded that Junkermier failed to support its damage claim with substantial evidence and was not entitled to collect any damages stemming from Alborn’s breach of fiduciary duty. ¶63 To begin with, our conclusion that the Employment Agreement is an enforceable contract repudiates much of the District Court’s damages analysis. The court clearly tied its damages analysis to its determination that the Employment Agreement was unenforceable. Because we are remanding for analysis of the Dobbins factors, we reverse the District Court’s ruling. If the court concludes that the Covenant is valid under Dobbins, further analysis of damages may be unnecessary. If, in contrast, the court 33 rejects the Covenant on the basis of its Dobbins reasonableness analysis, the court must reanalyze damages stemming from Alborn’s breach of fiduciary duty. In doing so, the District Court must consider the effect of Junkermier’s evidence regarding the value of the business it lost stemming from Alborn’s breach, the recurring loss of business caused by the breach, and whether Junkermier has proven that loss with reasonable certainty. ¶64 It is undisputed that Alborn breached his fiduciary duty to Junkermier. Thus, it is undisputed that Alborn is liable to Junkermier for that breach. “Once liability is shown, that is the certainty that damages are caused by the breach, then loss of profits on a reasonable basis for computation and the best evidence available under the circumstances will support a reasonably close estimate of the loss by a District Court.” Sebena v. AAA, 280 Mont. 305, 310, 930 P.2d 51, 54 (1996) (quoting Stensvad v. Miners & Merchants Bank, Etc., 196 Mont. 193, 206, 604 P.2d 1303, 1310 (1982)). Upon remand, if necessary, the District Court shall determine “the amount which will compensate [Junkermier] for all the detriment proximately caused” by Alborn’s breach, “whether it could have been anticipated or not.” Section 27-1-317, MCA. CONCLUSION ¶65 We reverse the District Court’s ruling that the Employment Agreement is not an enforceable contract. We affirm the District Court’s ruling that Former Shareholders, other than Alborn, owed Junkermier no fiduciary duty. We reverse the court’s ruling on damages resulting from Alborn’s breach of fiduciary duty. We therefore reverse the judgment of the District Court and remand for the court to analyze the Covenant’s 34 reasonableness under Dobbins and, if necessary, to analyze Junkermier’s damages stemming from Alborn’s breach of fiduciary duty. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE /S/ MICHAEL E WHEAT

September 6, 2016

b050441a-fee1-4968-b337-16439619545d

Granite County Commissioners v. McD

2016 MT 281

DA 16-0126

Montana

Montana Supreme Court

DA 16-0126 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 281 GRANITE COUNTY BOARD OF COMMISSIONERS, Claimant, Objector and Appellee, v. ESTHER J. MCDONALD, Objector and Appellant. APPEAL FROM: Montana Water Court, Cause No. 76GJ-40 Honorable Russ McElyea, Chief Water Judge COUNSEL OF RECORD: For Appellant: David T. Markette, Dustin M. Chouinard, Markette & Chouinard, P.C., Hamilton, Montana For Appellee: Blaine C. Bradshaw, Granite County Attorney, Philipsburg, Montana Submitted on Briefs: July 20, 2016 Decided: November 3, 2016 Filed: __________________________________________ Clerk 11/03/2016 Case Number: DA 16-0126 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Esther McDonald appeals from the Water Court’s Order filed January 27, 2016. We affirm. ¶2 We restate the issues on appeal as follows: Issue one: Did the Water Court err in its interpretation of the 1906 Decree in the case of Montana Water, Electric and Mining Co. v. Schuh? Issue two: Did the Water Court err in deciding whether to apply claim preclusion doctrines to limit Granite County’s arguments concerning application of the Schuh Decree? FACTUAL AND PROCEDURAL BACKGROUND ¶3 This case arises from McDonald’s objection to three water right claims owned by Granite County, 76GJ 40733-00, 76GJ 94401-00, and 76GJ 94402-00. The County’s water claims all involve its storage of Flint Creek water in Georgetown Lake reservoir. McDonald claims senior water rights in the natural flow of Flint Creek, which she diverts from the Creek below Georgetown Lake. Both the County claims and McDonald’s objections arise from the terms of the 1906 Decree in Montana Water, Electric and Mining Co. v. Schuh, by the Circuit Court of the United States, Ninth Circuit, District of Montana. Both parties are successors in interest to water rights decreed to parties in the Schuh case. Granite County is a successor to the plaintiff Montana Water, Electric and Mining Company, and McDonald is a successor to one of the defendants. ¶4 The County’s predecessors built a dam on Flint Creek, creating a reservoir now known as Georgetown Lake. The purpose of the reservoir was to generate electric power. The County owns the dam and hydroelectric facility, which it acquired from the Montana 3 Power Company in 1997. The operation of the facility is subject to regulation by the Federal Energy Regulatory Commission (FERC). Two of the County’s water rights used in the reservoir-hydroelectric facility arise from the Schuh Decree while the third is a subsequent use right. The County’s rights total 1200 miner’s inches1 or 30 cubic feet per second. The water used for power generation is returned to Flint Creek below the dam. STANDARD OF REVIEW ¶5 This Court reviews a lower court’s interpretation of a judgment as a question of law to determine whether it is correct. Harland v. Anderson Ranch Co., 2004 MT 132, ¶ 20, 321 Mont. 338, 92 P.3d 1160. DISCUSSION ¶6 Issue one: Did the Water Court err in its interpretation of the 1906 decree in the case of Montana Water, Electric and Mining Co. v. Schuh? ¶7 McDonald objected to the County’s water right claims in proceedings before the Water Court, contending that the Schuh Decree requires the County to maintain a constant flow of 30 CFS in Flint Creek below the Georgetown Lake dam during irrigation season, regardless of the amount of natural flow into the Lake. McDonald requested that “information remarks” be included with the abstract of each of the County’s water rights from Flint Creek, to provide as follows: At all times during the irrigation season of each year the owner of this right is to let, turn down and cause to flow into the Flint Creek channel below the power generation facilities not less than 1200 miner’s inches (30 CFS) of water. 1 Montana law provides that “100 statutory or miner’s inches shall be considered equivalent to a flow of 2.5 cubic feet (18.7 gallons) per second.” Section 85-2-103(2), MCA. 4 Granite County counters that the downstream irrigators are entitled to have the natural inflow of Flint Creek released below the dam, but that it is not required to release storage water from the reservoir when the natural inflow from Flint Creek falls below 30 CFS. Granite County contends that its obligation to McDonald is to assure that the natural inflow of Flint Creek passes through Georgetown Lake and the hydroelectric facility for release back into the natural channel. ¶8 The Water Court defined “natural flow” for purposes of this case as the amount of water that would flow through a stream if there were no interference from the dam. The Water Court defined storage water as impoundment of the natural flow of a stream for use during times of low natural flow. ¶9 The Water Court considered the terms of the Schuh Decree as it affected the respective rights of the parties, summarized as follows: Georgetown Lake was created in 1901 when the Montana Water, Electric Power and Mining Company (the Company) built a dam across Flint Creek, creating Georgetown Lake. The Company brought the Schuh action because of claims by downstream irrigators that the reservoir was interfering with their senior water rights. The Schuh Decree determined that the average flow of Flint Creek “has not exceeded and does not exceed” 1200 miner’s inches of water, but the Decree did not define the time of the year covered by that determination. The Water Court construed that flow finding to apply to the natural flow of Flint Creek during the irrigation season because the dispute before the Schuh Court pertained to disputes over irrigation rights. The Water Court determined that the Schuh Court’s reference to an average flow “impliedly recognizes that natural flows vary from season to 5 season and from year to year, with actual flows often falling either above or below the described average” which is “normal on Montana streams.” ¶10 The Schuh Court determined that the Company returned 1200 miner’s inches of water to Flint Creek “without deterioration in quality or quantity,” and that the Company had not impeded “the ordinary and natural flow or passage of the water of said Flint Creek.” Therefore, the Schuh Court concluded that none of the downstream water users had been damaged by operation of the dam and hydroelectric plant. The Water Court determined that these statements by the Schuh Court “recognize that the [downstream water users] rights were based on natural flow.” ¶11 The Schuh Decree also included a determination of the water rights of the downstream appropriators, totaling about 5000 miner’s inches of water. The Decree listed the flow of the appropriation right of each downstream appropriator for irrigation purposes at the water duty of one and one half miner’s inches of water per acre. While most of the downstream rights were senior to the Company’s rights, the Decree did not grant any downstream user a right in the storage water behind the Georgetown Lake dam. The Water court noted that the Schuh Decree entitled the Company to continue using its water rights as long as it “uses the water in such a manner that every appropriator further down the stream shall have, during the irrigating season of each year, the use and enjoyment of it substantially according to its natural flow.” (Emphasis added.) The Water Court reasoned that the term “every appropriator” must cover only appropriators with rights senior to those held by the Company, because the Company had no duty under 6 the principles of prior appropriation to preserve the flow of Flint Creek for junior appropriators. ¶12 The root of the present controversy is the statement in the Schuh Decree that during the irrigation season the Company must “let, turn down and cause to flow in the channel of said creek, to-wit Flint Creek, below its electric plant, not less than 1200 miner’s inches of water.” The Schuh Court enjoined the Company from “diverting from the channel of Flint Creek the water herein decreed to [downstream users].” At the same time, the Schuh Court recognized that the downstream users’ rights were limited to the natural flow of Flint Creek, enjoining them from demanding that the Company release “any greater amount of water than the average natural flow of said stream which in the irrigating season of each year does not exceed 1200 miner’s inches or 30 cubic feet per second of water.” The Water Court determined that this language supported Granite County’s argument that the Schuh Decree did not require it to release storage water to benefit downstream users. ¶13 Both sides moved for summary judgment in the Water Court, McDonald relying upon the portion of the Schuh Decree that ordered that 1200 miner’s inches must be discharged into Flint Creek “at all times” during the irrigation season. The Water Court found that McDonald’s position conflicts with the express recognition in the Schuh Decree that the rights of the downstream users were limited to the natural flow of Flint Creek and with the injunction against the downstream users from demanding any more than the natural in-flow of Flint Creek. The Water Court found no indication that the Schuh Court intended to depart from the established Montana precedent that “makes a 7 clear distinction between the natural flow rights held by McDonald and the storage rights held by Granite County.” ¶14 The Water Court explained that limiting the downstream users to the natural flow of Flint Creek was consistent with established Montana law. The Water Court cited Beaverhead Canal Co. v. Dillon Electric Light & Power, 34 Mont. 135, 140, 85 P. 880, 882 (1906) (appropriator’s rights are limited to the natural conditions of the stream at the time of the appropriation); Kelly v. Granite Bi-Metallic, 41 Mont. 1, 108 P. 785 (1910) (stored water is not available to satisfy rights of downstream users); Donich v. Johnson, 77 Mont. 229, 250 P. 963 (1926) (downstream users had the right to use the natural flow of the stream to the extent of their appropriations); and Federal Land Bank v. Morris, 112 Mont. 445, 116 P.2d 1007 (1941) (water released from artificial impoundments is not part of the natural flow). The principle of separating stored water from the natural flow is recognized by Montana statute, § 85-2-411, MCA. ¶15 The Water Court summarized the relationship between upstream storage and downstream senior appropriators: To summarize, downstream appropriators of irrigation rights with senior priority dates are entitled to the natural flow of a stream as it existed at the time of appropriation but they cannot demand release of water from storage when natural flows are unavailable. This has long been the rule in Montana. And, although the Schuh Decree did not expressly state this rule, the language of the Decree implicitly recognizes it. The Schuh Decree’s reference to natural flow was consistent with the law applicable to storage rights. That law required operators of reservoirs to make the natural flow of a stream available to senior downstream appropriators during time of shortage. Under this rule, natural flow can only be stored when there is enough water to satisfy senior rights 8 or when senior rights are not being used. At the same time, the law on storage does not require release of lawfully impounded storage water when natural flows drop below the amounts needed by downstream irrigators. The Water Court also rejected McDonald’s contention that the Schuh Court made a factual finding that “natural flows in Flint Creek equal 30 CFS every day of the irrigation season.” To the contrary, the Water Court determined that read in context, the Schuh Decree enjoined the downstream users’ demands for water beyond a greater amount of water than the amount of natural flow of the stream above the dam. Further, the water Court determined that the statement in the Decree that the flow of Flint Creek “has not exceeded and does not exceed twelve hundred (1200) miner’s inches” was only an observation that natural flows average that amount of water. The Water Court determined that the Court in Schuh was undoubtedly aware “that stream flows vary from year to year and from month to month within the same year.” In conclusion, the Water Court determined that the Schuh Decree’s instruction to release 1200 miner’s inches “at all times” was designed to ensure that whatever the Company used for hydroelectric generation was returned to the stream rather than being diverted elsewhere. “It was not a literal command to release 1200 miner’s inches every day of the irrigation season regardless of how much water was naturally available in Flint Creek.” ¶16 Accordingly, the Water Court denied McDonald’s motion for summary judgment and denied McDonald’s request to add “information remarks” to the statements of the County’s water rights. 9 ¶17 Turning to the County’s motion for summary judgment, the Water Court reiterated its construction that the Schuh Decree did not direct that the downstream irrigators receive a benefit—mandatory release of storage water—that the law does not provide. The Water Court determined that water lawfully impounded in Georgetown Lake is not “subject to a servitude in favor of downstream irrigators requiring releases to supplement the natural flows of Flint Creek.” ¶18 The Water Court concluded: The Court in Schuh did not intend to obligate the owner of Georgetown Lake to supplement the natural flows of Flint Creek with storage water. Granite County’s water rights are not subject to a condition requiring use of storage water from Georgetown Lake to maintain 30 CFS flows in Flint Creek throughout the irrigation season. The Water Court granted summary judgment to Granite County, holding that its water claims to Flint Creek “are not subject to a servitude in favor of McDonald requiring releases of storage water to supplement the natural flows of Flint Creek.” McDonald appeals. ¶19 This Court reviews the Water Court’s interpretation of a prior decree as an issue of law, to determine whether it is correct. Harland, ¶ 20; Levens v. Ballard, 2011 MT 153, ¶ 10, 361 Mont. 108, 255 P.3d 195. Judgments are to have a reasonable intendment; where a judgment is susceptible of two interpretations the one will be adopted which renders it the more reasonably effective and conclusive and which makes the judgment harmonize with the facts and law of the case. It is imperative, in view of the contradictory findings and conclusions of the court in the Smith and consolidated decrees, to ascertain the intention of the court. A decree 10 will not be construed so as to result in a positive wrong where that result can possibly be avoided. Gans & Klein v. Sanford, 91 Mont. 512, 522, 8 P.2d 808, 811 (1932) (internal citations omitted). When a decree is obscure or ambiguous the reviewing court may “refer to the record in the original case,” Harland, ¶ 23, and a decree is ambiguous “if reasonable persons differ as to its effect and meaning.” Harland, ¶ 24. ¶20 McDonald argues that the Schuh Decree was ambiguous and that the Water Court failed to properly apply the pleadings in that case while interpreting the Decree. She argues that the “entire purpose” of the action was to “determine a quantified flow” that the dam operator must release for downstream users. To the contrary, the Water Court expressly construed the Schuh Decree to require the County to release the natural inflow of Flint Creek during irrigation season, but to not require release of stored water to do so. This is entirely consistent with the pleadings that McDonald cites. ¶21 While McDonald also asserts that the Decree should be read as expressing the intent to continue the “historic” operation of the dam, this overlooks the facts that the dam was built in 1901 and the Decree was issued in 1906. So, while there was some record of the operation of the dam before the case was submitted for decision, it can hardly be relied upon as an “historic” record. The Schuh Decree was clearly issued in the context of established prior appropriation law. The Decree listed the name of each appropriator with rights from Flint Creek for irrigation purposes, along with the flow rate of each right and, by implication, the number of acres to be irrigated based upon the express water duty of one and one half miner’s inches of water per acre. This is similar 11 to many other water adjudication decrees of the early twentieth century under Montana’s law of prior appropriation. Gwyn v. City of Philipsburg, 156 Mont. 194, 478 P.2d 855 (1970) (City owned a dam that diverted the outflow of a mountain lake from Fred Burr Creek, into its municipal water system. Upon suit by downstream appropriators on Fred Burr Creek, this Court held that the City was required to release water “not to exceed” the natural flow from the lake whenever the water in the stream below was less than the amount required to satisfy downstream rights.). The Water Court therefore properly construed the prior Decree by concluding that a downstream appropriator has no rights to water stored behind an upstream dam as long as the dam operator releases the natural inflow into the stream below the dam. ¶22 The Water Court was tasked with construing and applying a decree drafted over 100 years ago and did so consistently with the applicable law. ¶23 Issue two: Did the Water Court err in deciding whether to apply claim preclusion doctrines to limit Granite County’s arguments concerning application of the Schuh Decree? ¶24 The Water Court considered McDonald’s argument that principles of claim preclusion estopped the County from contending that it was not required to release 30 CFS from Georgetown Lake continuously during the irrigation season. First, McDonald argued that res judicata barred the County from “attempting to redefine its rights” already determined in the Schuh Decree. The Water Court disagreed, noting that both parties “agree the narrow issue is interpretation of the rights already recognized in the Schuh Decree” and that “[i]nterpreting a decree is not the same as re-litigating matters already 12 decided in it.” For similar reasons, the Water Court determined that the County was not collaterally estopped by the existence of the Schuh Decree. ¶25 The Water Court considered McDonald’s argument that judicial estoppel barred the County from arguing that it was not required to make continuous releases of 30 CFS of water during the irrigation season. McDonald relied upon a statement by the County in FERC and other prior proceedings about its obligations under the Schuh Decree. The Water Court cited Watkins Trust v. Lacosta, 2004 MT 144, ¶ 33, 321 Mont. 432, 92 P.3d 620, for the principles of judicial estoppel, the purpose of which is to “suppress fraud and prevent abuse of the judicial process by deliberate shifting of positions to suit the exigencies of a particular action.” The Water Court determined that McDonald’s judicial estoppel argument failed because that doctrine “does not apply to changes of position relating to matters of law. Interpretation of the Schuh Decree involves a statement of opinion regarding a matter of law, not a statement of fact.” Finding no evidence that the County intended to commit fraud or abuse the judicial process, the Water Court found that McDonald did not demonstrate all the elements of judicial estoppel. ¶26 The Water Court dismissed McDonald’s argument that principles of claim preclusion estopped the County from contending that it was not required to release 30 CFS from Georgetown Lake continuously during the irrigation season. The Water Court concluded: Although Granite County has taken contradictory positions in other proceedings, those proceedings did not involve McDonald, and there is no evidence that Granite County meant to perpetuate a fraud or abuse the 13 judicial process. Granite County’s arguments in this case are not precluded by the doctrines of res judicata, judicial estoppel or collateral estoppel. We agree with the Water Court’s conclusion that res judicata does not bar the County’s arguments made in this case. The County is not attempting to re-litigate settled issues, but, like McDonald, is only arguing its case for how the ambiguities in the Schuh Decree should be construed. The Water Court noted that both parties “agree the narrow issue is interpretation of the rights already recognized in the Schuh Decree” and that “[i]nterpreting a decree is not the same as re-litigating matters already decided in it.” For similar reasons, we agree with the Water Court’s determination that the County was not collaterally estopped in its arguments by the existence of the Schuh Decree. ¶27 Therefore, the Water Court properly considered and applied the principles of claim preclusion relied upon by McDonald. ¶28 The Water Court’s decision is affirmed. /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE 14 Justice Laurie McKinnon, specially concurring. ¶29 I agree with the Court’s conclusion that “a downstream appropriator has no rights to water stored behind an upstream dam as long as the dam operator releases the natural inflow into the stream below the dam.” Opinion, ¶ 21. I write separately, however, to address what I believe was ultimately decided in the Schuh Decree and to recognize what remains unresolved between the parties. The provisions of the Schuh Decree must be read together, along with the findings regarding natural flow. ¶30 The Schuh Decree recognized that the Company was the owner of, and entitled to, a total of 1200 miner’s inches of Flint Creek by virtue of certain appropriations made in 1888, 1889, and 1891. Schuh Decree, ¶ 2. The purpose and beneficial use of these appropriations was to generate electricity. Schuh Decree, ¶ 2. In 1901, as owner of these appropriations, the Company’s predecessor completed construction of a dam, begun in 1891, for the purpose of storing water diverted pursuant to its appropriations. Schuh Decree, ¶ 2. In 1902, the Company filed a complaint in federal district court requesting a determination of the “amounts of water which your orator shall be compelled to allow to flow from the said storage reservoir during the irrigation season . . . .” ¶31 The Schuh Decree must be evaluated within the context of the Company’s request to establish a quantity or amount of instream flow. The Schuh court found specifically that “the amount of water reasonably and necessarily required to run and operate said electric plant of the complainant to its full capacity, and which has been and now is so used by the complainant, is about 30 second feet, or 1200 miner’s inches of water.” Schuh Decree, ¶ 5. Significantly, the Schuh Decree further found that through its electric 15 power plant, the Company has permitted to flow down through the natural channel 1200 miner’s inches of water, in such a manner that none of the downstream users have been damaged. Schuh Decree, ¶¶ 7, 14. More specifically, the Schuh court determined that the Company had not – during the irrigating seasons since the construction of its dam, detained or deprived the defendants of, the ordinary and natural flow or passage of the water of said Flint Creek, that is in quantities as the same would naturally run at such times, otherwise than is necessary to the reasonable and proper operation of its electric plant and machinery. Schuh Decree, ¶ 9. The Schuh court determined the natural flow rate of Flint Creek above the dam to be 1200 miner’s inches, which the Company was entitled to divert as long as it was returned to Flint Creek, in the amount of 1200 miner’s inches, for the lands of downstream users. Schuh Decree, ¶ 4. ¶32 Importantly, the Schuh court continued to recognize entitlement by downstream water users to appropriate amounts greater than 1200 miner’s inches, many of which had senior appropriation dates to the Company. Schuh Decree, ¶ 15. As observed by the Water Court, those combined rights far exceeded 1200 miner’s inches. Therefore, the Schuh Decree determined only the amount of instream flow the Company was entitled to divert and, thereafter return, to Flint Creek. The Schuh court’s conclusion that downstream users are “enjoined and restrained” from “obstructing or interfering with the use and enjoyment of said dam and reservoir and the storing of water therein,” and that the natural flow was 1200 miner’s inches, refers to the amount of water the court previously established as the natural flow of Flint Creek, which the Company demonstrated it could use and return to Flint Creek without harm to downstream 16 appropriators. Schuh Decree, ¶ 20. Downstream appropriators were restrained from demanding “any greater amount of water than the average natural flow” be returned for downstream appropriators. Schuh Decree, ¶ 20. Therefore, I agree, based on the entirety of the Schuh Decree, that the Company is not required to release storage water in favor of downstream users to supplement natural flows of Flint Creek which are below 1200 miner’s inches. The Schuh Decree clarified instream flow which, if available, could be diverted by the Company, and returned for the lands of downstream users. ¶33 While the Schuh Decree made a specific finding that quantifies Flint Creek’s average natural flow above the dam, it did not enjoin downstream users with senior rights from appropriating amounts in excess of 1200 miner’s inches when the flow exceeded 1200 miner’s inches in Flint Creek. These downstream rights, together with those of the Company, remain subject to the doctrine of prior appropriation. The Water Court correctly recognized that the law requires operators of reservoirs to make the natural flow of a stream available to senior downstream appropriators during times of shortage. Thus, natural flow can be stored only when there is enough water to satisfy senior rights, or when senior rights are not being used. ¶34 Therefore, I would clarify and definitively reject McDonald’s argument that the Schuh Decree enjoins downstream users from appropriating no more than 1200 miner’s inches during the irrigation season. In my opinion, the Schuh Decree established a quantity of natural flow above the dam only, and it did not enjoin downstream users with senior rights from appropriating amounts in excess of 1200 miner’s inches when the flow exceeded 1200 miner’s inches in Flint Creek. It similarly did not compel the Company to 17 draw from its reservoir to supplement instream flow when those rates were below 1200 miner’s inches—the amount the Schuh Decree quantified as a finding of fact as the average instream flow. /S/ LAURIE McKINNON

November 3, 2016

aa3136bf-fd0d-4d03-a3d6-4d48a3297fd1

State v. Griffin

2016 MT 231

DA 14-0674

Montana

Montana Supreme Court

DA 14-0674 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 231 STATE OF MONTANA, Plaintiff and Appellee, v. RICHARD LEE GRIFFIN, Defendant and Appellant. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Sanders, Cause No. DC-14-03 Honorable James A. Manley, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Natalie Wicklund, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Robert Zimmerman, Sanders County Attorney, Thompson Falls, Montana Submitted on Briefs: August 3, 2016 Decided: September 20, 2016 Filed: __________________________________________ Clerk 09/20/2016 Case Number: DA 14-0674 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Richard Lee Griffin appeals from his May 14, 2014 conviction on six felony offenses of incest, sexual intercourse without consent and sexual assault. We affirm. ¶2 We restate the issue on appeal as follows: Whether this Court should undertake plain error review and conclude that the District Court committed reversible error by failing to directly address a spectator comment made during closing argument. FACTUAL AND PROCEDURAL BACKGROUND ¶3 In January 2014 the State charged Griffin with six felonies arising from his sexual contact with two step-daughters. The evidence presented during the State’s case-in-chief showed that Griffin repeatedly engaged in sexual contact with the girls, in addition to inflicting beatings, requiring them to do house work in the nude, and killing their pets. Griffin did not present any evidence and did not testify. ¶4 During closing argument by Griffin’s attorney, an audience member interrupted by stating: “Well I’d like to say that God is faithful and just to those who confess their sins.” The District Court intervened, stating: “No, ma’am. Ma’am, any more outbursts and whoever makes the outburst will be removed from the courtroom.” Griffin’s attorney continued his closing without noting the statement and did not move for any relief.1 The jury deliberated and returned the convictions. ¶5 Griffin appeals, arguing that the spectator’s comment deprived him of a fair trial and that this Court should undertake plain error review and reverse the convictions. 1 Out of the presence of the jury the District Court further admonished the spectator that her conduct was inappropriate and was the type of conduct that could lead to a mistrial. 3 STANDARD OF REVIEW ¶6 Griffin requests that this Court review the District Court’s response or lack of response to the spectator comment during closing argument, even though there was no objection or motion from defense counsel. The general rule is that an issue raised for the first time on appeal will not be considered, because a defendant who does not object to an error is deemed to have waived the error. State v. Taylor, 2010 MT 94, ¶ 12, 356 Mont. 167, 231 P.3d 79. However, this Court has the discretionary authority to find plain error even though the defendant made no objection or requested no relief at trial. State v. Jackson, 2009 MT 427, ¶ 42, 354 Mont. 63, 221 P.3d 1213. This Court has repeatedly stated that it will find plain error only sparingly, where failing to do so “may result in a manifest miscarriage of justice, may leave unsettled the question of the fundamental fairness of the trial, or may compromise the integrity of the judicial process. State v. Walton, 2014 MT 41, ¶ 17, 374 Mont. 38, 318 P.3d 1024. Our precedent requires that the alleged error “firmly convince” the Court that there was a serious mistake that must be addressed. Taylor, ¶ 17. ¶7 We will not undertake “full analysis” of the alleged error each time a party requests plain error review. Walton, ¶ 17. Conducting a full analysis in order to determine whether to find plain error would defeat the underlying rule that a party must object to error at trial, because errors should be brought to the attention of the trial court where they can be initially addressed. State v. Daniels, 2003 MT 247, ¶ 28, 317 Mont. 331, 77 P.3d 224. 4 DISCUSSION ¶8 Issue: Whether this Court should undertake plain error review and conclude that the District Court committed reversible error by failing to directly address a spectator comment made during closing argument. ¶9 A criminal defendant has a right to a fair trial under both the United States and Montana Constitutions. State v. Aker, 2013 MT 253, ¶ 24, 371 Mont. 491, 310 P.3d 506. The district court bears the duty to insure that the defendant receives a fair trial. State v. Egan, 178 Mont. 67, 78, 582 P.2d 1195, 1201 (1978). Griffin argues that the spectator’s remark eroded his presumption of innocence and impacted his right to be judged solely upon properly-presented evidence. Griffin argues that the effect of the speaker’s comment was to implicate him as a sinner who should confess. Griffin argues that the District Court had the options to poll the jury to determine whether the remark influenced any of them; to instruct the jury to disregard the statement; or to declare a mistrial. Finally, he contends that the District Court’s failure to invoke one or more of these options deprived him of a fair trial. ¶10 Under the circumstances of this case, and based upon existing precedent, we disagree with Griffin and decline to find plain error. First, the spectator’s remark did not expressly accuse Griffin of a crime or of guilt, and did not imply any extra-judicial knowledge of the facts. It was more an expression of the spectator’s personal beliefs. Second, it was a brief and isolated event. Third, the District Court responded promptly by chastising and warning the spectator, in the presence of the jury, that her conduct was inappropriate and that further outbursts would not be tolerated. 5 ¶11 In addition, the District Court’s instructions to the jury emphasized Griffin’s presumption of innocence “throughout every stage of the trial” and the fact that he was not required to prove his innocence or to present any evidence. The District Court cautioned the jurors to not accept any person’s version of the applicable law except as stated in the instructions. The jurors were instructed to deliberate and decide “uninfluenced by passion or prejudice.” The District Court instructed the jury that the “law forbids you to be governed by mere sentiment, conjecture, sympathy, passion, prejudice, public opinion or public feeling.” ¶12 In many cases this Court has declined to find plain error when a defendant argues that a prosecutor’s statement about witness credibility in closing argument was improper. Aker, ¶¶ 29-30 and cases cited therein. In State v. Lacy, 2012 MT 52, ¶¶ 24-26, 364 Mont. 291, 272 P.3d 1288, we acknowledged the impropriety of a prosecutor’s invocation of a “reliance on God” during closing, but determined that is was “not so far from the permissible” to justify finding plain error. We follow those cases here. While the spectator’s remark was improper, it was not sufficiently serious that it caused a manifest miscarriage of justice, left unsettled the fundamental fairness of the trial, or compromised the integrity of the judicial system. CONCLUSION ¶13 The convictions are affirmed. /S/ MIKE McGRATH 6 We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

September 20, 2016

abe7f81f-3327-4600-8ee1-661e17fd569a

Bevill v. Sandberg

2016 MT 251N

DA 16-0102

Montana

Montana Supreme Court

DA 16-0102 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 251N BEVILL LIMITED PARTNERSHIP, Plaintiff and Appellee, v. GREGORY P. SANDBERG, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 14-1169A Honorable Katherine R. Curtis, Presiding Judge COUNSEL OF RECORD: For Appellant: Brian M. Joos, Viscomi & Gersh, PLLP, Whitefish, Montana For Appellee: Sean S. Frampton, Johnna J. Preble, Morrison & Frampton, PLLP, Whitefish, Montana Submitted on Briefs: September 7, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 16-0102 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Bevill Limited Partnership (Bevill) and Gregory Sandberg dispute the enforceability and effect of an easement burdening Bevill’s property. The parties own adjacent parcels of real property in Whitefish, Montana. A boundary line adjustment in July 2003 made Sandberg’s property inaccessible from Colorado Avenue. In September 2003, Bevill’s predecessor in interest executed a fifty-foot private access and utility easement (the Easement) in favor of Sandberg’s predecessor in interest. The Easement allowed Sandberg’s predecessor to access his property and also entitled Bevill’s predecessor to use the Easement for access and utilities. The parties concurrently entered into a written agreement (the Agreement) imposing certain restrictions on Bevill’s property. The Agreement provides, in pertinent part: For valuable consideration, receipt of which is hereby acknowledged, [Bevill’s predecessor in interest] agrees to impose the following terms and restrictions on [Bevill’s] PROPERTY and hereby grants [Sandberg’s predecessor in interest] a negative easement, pursuant to which [Bevill’s predecessor in interest] agrees that he, and his successors in interest, (a) shall not construct any structures, buildings, or any other improvements, including but not limited to parking lots, parking areas, or driveways, on that portion of [Bevill’s] PROPERTY that is shown as cross-hatched on “Exhibit A,” attached hereto and incorporated herein by reference, (b) shall obtain primary vehicular access to the units to be constructed on [Bevill’s] 3 PROPERTY directly from Colorado Avenue, and shall use the 50’ PRIVATE ACCESS & UTILITY EASEMENT (shown on Exhibit “A”) only for occasional and limited vehicular access to that portion of [Bevill’s] PROPERTY located east of such units.” The referenced “Exhibit A” is a map of the property that shows the Easement and the restricted area of development. ¶3 Bevill’s predecessor later subdivided the property into five lots. Four of the lots had direct access to Colorado Avenue. Bevill’s predecessor could access the fifth lot (the Open Area) only by means of the access road through the Easement. Bevill’s predecessor acquired additional property, which was combined with the Open Area and accessible only by the access road. ¶4 In 2010, Bevill purchased the Open Area. Three years later, Bevill applied with the City of Whitefish to subdivide the property. The City conditioned approval of Bevill’s application, in part, on Bevill granting the City an access and utility easement that would open the access road on the Easement to the public. Bevill granted the City the access easement and the City approved Bevill’s application. The access road through the Easement therefore became open to the public. ¶5 In November 2014, Bevill filed a declaratory judgment action regarding the validity and enforceability of the restriction under the Agreement’s subpart (b). Bevill filed a motion for summary judgment, which the District Court granted. The court noted that the parties did not dispute that the access road through the Easement was open to the public. Consequently, the court framed the issue as “to what extent the restriction on Bevill’s use of the 50-foot access road can survive a clear designation of the roadway as 4 open to the public, for use by anyone and everyone without restriction.” Because the establishment of the public road granted members of the public—including Bevill—an “unrestricted right to travel upon the road,” the court concluded that it could not enforce the restriction on Bevill’s use of the Easement under the Agreement. The court also rejected Sandberg’s argument that subpart (b) of the Agreement prohibited Bevill from developing the property. The court’s order did not affect subpart (a) of the Agreement. Sandberg appeals. ¶6 We review an entry of summary judgment de novo, applying the criteria set forth in M. R. Civ. P. 56(c)(3). Broadwater Dev., L.L.C. v. Nelson, 2009 MT 317, ¶ 15, 352 Mont. 401, 219 P.3d 492. Where the material facts are undisputed, the court must identify the applicable law, apply it to the uncontroverted facts, and determine who prevails. Broadwater Dev., L.L.C., ¶ 15. The construction of a writing granting an interest in real property is governed by the rules of contract interpretation. Broadwater Dev., L.L.C., ¶ 19. The interpretation of a contract is a question of law that we review for correctness. Hurly v. Lake Cabin Dev., LLC, 2012 MT 77, ¶ 14, 364 Mont. 425, 276 P.3d 854. ¶7 Sandberg does not dispute that the access road through the Easement is open to the public. Given this, we must apply our rules of contract interpretation to determine the effect and enforceability of subpart (b) of the Agreement. See Broadwater Dev., L.L.C., ¶ 15. Subpart (b) provides, in pertinent part, that Bevill “shall use the [Easement] only for occasional and limited vehicular access to that portion of [Bevill’s] PROPERTY 5 located east” of the four lots with direct access to Colorado Avenue. Despite this language, Sandberg did not object to the public easement and does not challenge public use of the roadway. Rather, Sandberg alleges that subpart (b) restricts construction and development because it restricts where and how a person may gain access into the property after traveling upon the public roadway. He claims, therefore, that the provision restricts the property and not the roadway. ¶8 Subpart (b)’s words—which must be “understood in their ordinary and popular sense” pursuant to § 28-3-501, MCA—clearly pertain to use of the Easement to access Bevill’s property. Given the plain language of subpart (b), Sandberg’s assertion that it restricts “development and construction” on Bevill’s property adds language to the Agreement in conflict with our rules of contract interpretation. Section 1-4-101, MCA (“In the construction of an instrument, 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.”). “[I]t is not the proper role of the judiciary to insert modifying language into clearly written and unambiguous instruments where the parties to the instrument declined to do so.” Creveling v. Ingold, 2006 MT 57, ¶ 12, 331 Mont. 322, 132 P.3d 531. ¶9 The language of subpart (a)—which restricts the construction of “any structures, buildings, or any other improvements, including but not limited to parking lots, parking areas, or driveways, on that portion of [Bevill’s] PROPERTY that is shown as cross-hatched on ‘Exhibit A’”—establishes clearly that the parties restricted development 6 only with regard to the portion of Bevill’s property marked on the attached map. We must “give effect to the mutual intention of the parties” who entered into the Agreement. Section 28-3-301, MCA. Moreover, subpart (a) “help[s] to interpret” subpart (b) because it demonstrates that the parties understood how to set forth development restrictions in the Agreement where they intended to do so. Section 28-3-202, MCA. ¶10 The District Court correctly interpreted subpart (b) of the Agreement as a restriction on use of the Easement, and not as a restriction on Bevill’s right to develop the remainder of his property not restricted under subpart (a). Accordingly, we conclude that the District Court properly granted Bevill judgment as a matter of law regarding the enforceability and effect of subpart (b) of the Agreement. We therefore decline to address Sandberg’s other arguments on appeal. ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by the applicable standards of review and does not establish any new precedent or modify existing precedent. We affirm the District Court’s order granting Bevill summary judgment. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON

October 4, 2016

d5bfbd67-2460-4f02-969e-539e12521bef

Marriage of Mellito

2016 MT 224N

DA 16-0065

Montana

Montana Supreme Court

DA 16-0065 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 224N IN RE THE MARRIAGE OF: CAMI LU MELLITO, Petitioner and Appellee, v. DARREN MELLITO, Respondent and Appellant. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DR 08-88B Honorable Mike Salvagni, Presiding Judge COUNSEL OF RECORD: For Appellant: Darren Mellito, Self-Represented, Bozeman, Montana For Appellee: Jennifer Wendt Bordy, Attorney at Law, Bozeman, Montana Submitted on Briefs: July 20, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 16-0065 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Darren Mellito (Darren), appearing pro se, seeks relief from a final parenting plan granting custody of his child, W.M., to Cami Mellito, W.M.’s mother and Darren’s former wife. A Standing Master for the Eighteenth Judicial District Court issued the parenting plan along with findings, conclusions, and a decree of dissolution on May 11, 2015. On June 10, 2015, Darren appealed the Standing Master’s conclusions to this Court. We dismissed that appeal without prejudice because Darren had not filed timely objections to the Standing Master’s findings and conclusions in the District Court, pursuant to Beals v. Beals, 2013 MT 120, 370 Mont. 88, 300 P.3d 1158, and § 3-5-126(2), MCA. ¶3 On October 30, 2015, Darren moved for relief from judgment in the District Court, apparently invoking M. R. Civ. P. 60. On January 4, 2016, the District Court issued an order noting Darren’s motion was deemed denied after 60 days had passed without a ruling on the motion. See M. R. Civ. P. 60(c)(1). Darren now appeals from that order, which we affirm. 3 ¶4 We are willing to give pro se litigants some leeway regarding technical rule requirements. In re Marriage of McMahon, 2002 MT 198, ¶ 7, 311 Mont. 175, 53 P.3d 1266. Generally, we review a district court’s ruling on a Rule 60(b) motion for abuse of discretion. In re the Marriage of Orcutt, 2011 MT 107, ¶ 5, 360 Mont. 353, 253 P.3d 884. Some exceptions to this general standard exist, but Darren has not clearly invoked any of those exceptions. ¶5 In his brief, Darren does not address his motion for relief or the District Court’s denial of the motion. Instead, Darren argues the Standing Master’s findings and conclusions are defective for two reasons: first, the conclusions are based on hearsay, and second, the Standing Master failed to consider his affidavit as dispositive of the best interests of the child, W.M. ¶6 Regarding the alleged hearsay, Darren has not provided a transcript of the proceedings below, so we are unable to determine that the Standing Master erred in admitting the testimony she considered in rendering her findings and conclusions. ¶7 Regarding the Standing Master’s treatment of Darren’s affidavit, the Standing Master was not required give the affidavit more weight than any other evidence. Darren’s reliance on M. R. Civ. P. 56 and case law concerning summary judgment is misplaced because summary judgment is not at issue in this appeal. ¶8 For these reasons, we find no basis for granting Darren relief from the District Court’s order. We therefore affirm the order. 4 ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law. /S/ PATRICIA COTTER We Concur: /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT

September 6, 2016

d8b1a00f-8cc5-429f-b768-264698781f8a

Krone v. Roundup

2016 MT 227N

DA 16-0128

Montana

Montana Supreme Court

DA 16-0128 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 227N BRYAN KRONE, Plaintiff and Appellant, v. CITY OF ROUNDUP, Defendant and Appellee. APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Musselshell, Cause No. DV 15-12 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Jack R. Stone, Attorney at Law, Lewistown, Montana For Appellee: Jared S. Dahle, Nelson & Dahle, P.C., Billings, Montana Submitted on Briefs: August 3, 2016 Decided: September 13, 2016 Filed: __________________________________________ Clerk 09/13/2016 Case Number: DA 16-0128 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Bryan Krone appeals from a February 2016 order of the Fourteenth Judicial District Court, Musselshell County, granting the City of Roundup’s Motion for Summary Judgment and denying Krone’s Motion for Summary Judgment. We affirm. ¶3 This case stems from the circumstances surrounding a lightning-caused structure fire at Krone’s residence in Roundup on July 27, 2013. The Roundup Volunteer Fire Department arrived on scene and immediately initiated fire suppression in the attic of the residence, initially using 1500 gallons of water carried on the trucks. Krone alleges that when the firefighters attempted to hook their hoses up to the fire hydrant for additional fire suppression, the hydrant spewed dark colored water that eventually became mud. He argues that the resulting lack of water necessary to allow suppression of the fire caused his house to burn and is evidence that the City of Roundup breached its duty to maintain the fire hydrant in a good and workable condition. Krone moved for summary judgment on the issue of the City’s negligence on the theory that the City was subject to suit under Article II, Section 18 of the Montana Constitution. The City of Roundup moved for summary judgment contending that Krone could not establish a prima facie case of 3 negligence against the City, and that the public duty doctrine applied to prevent the City from being found to have owed a duty to Krone under the facts of the case. ¶4 The District Court granted summary judgment in favor of the City of Roundup and determined that the public duty doctrine shielded Roundup from liability in this case as there were no special circumstances claimed by Krone that would constitute an exception to the doctrine, and that this Court’s precedent placed the duties of firefighting directly under the purview of the public duty doctrine. ¶5 We review de novo a district court’s grant or denial of summary judgment, applying the same criteria of M. R. Civ. P. 56 as a district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839 (citation omitted). We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Pilgeram, ¶ 9 (citation omitted). 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); Newman v. Scottsdale Ins. Co., 2013 MT 125, ¶ 20, 370 Mont. 133, 301 P.3d 348 (citations omitted). ¶6 In response to a motion for summary judgment, the non-moving party must provide material and substantial evidence setting forth specific facts to raise a genuine issue of material fact, rather than relying upon speculative, conclusory, or fanciful statements. Hiebert v. Cascade Cty., 2002 MT 233, ¶ 21, 311 Mont. 471, 56 P.3d 848 (citations omitted). All reasonable inferences that may be drawn from the offered 4 evidence should be drawn in favor of the party opposing summary judgment; however, “[s]ummary judgment cannot be defeated by unsupported speculation.” Knucklehead Land Co. v. Accutitle, Inc., 2007 MT 301, ¶ 26, 340 Mont. 62, 172 P.3d 116. ¶7 Under the facts of this case, we find it unnecessary to reach the merits of the District Court’s determination that the public duty doctrine worked to preclude any liability owed on the part of the City of Roundup to Krone. The City of Roundup, through affidavit and otherwise, has presented sufficient evidence to determine that, by the time the 1500 gallons of water carried on the trucks was exhausted, there was no possibility that Krone’s residence could have been saved. We summarize the City’s evidence as follows. ¶8 By the time F46, the support truck carrying 1,000 of the 1,500 gallons initially used in fire suppression efforts, arrived on scene, “the attic of the home was mostly engulfed.” After the arrival of F46, firefighter Glen Russell removed a ceiling fan, obtained line of sight into the attic, and stated that, at that point, the attic was fully involved. Throughout the initial fire suppression efforts, power to the home remained active, forcing the firefighters to fight the fire solely from the exterior of the residence due to safety concerns. Through affidavit, the City of Roundup states that the attic area was fully involved and the ceilings were beginning to collapse before any attempt to introduce water from the hydrant was made. ¶9 Further, the City of Roundup presented expert testimony that the house fire was a loss from the time of arrival to full extinguishment. The City’s expert stated that “if 1500 (fifteen hundred) gallons of water (approximately 12,495 pounds, twelve thousand four 5 hundred ninety five pounds) did not reduce or extinguish [the] fire, it is apparent that the seat of the fire had sufficient fire loading at that time, that it had grown, to such a point that even with additional gallons of water, (from any source, tenders, water lines etc.) firefighters would not have been able to extinguish the fire and the home and its [contents] would have been a total loss, either by fire, smoke damage and/or suppression efforts, even with any additional water supplies.” ¶10 Krone does not allege that the City of Roundup’s firefighters acted negligently in fighting the fire. Further, Krone presents no evidence, besides eyewitness accounts of smoke issuing from the attic for a period of time, that either supports his motion for summary judgment by establishing that the allegedly non-working fire hydrant was the cause of his damages or undercuts the City of Roundup’s affidavit evidence or expert testimony. In light of Krone’s inability to refute the City’s well-documented factual conclusion that the house could not have been saved even if the fire hydrant had been in working order, we conclude that Krone did not raise an issue of material fact requiring a trial even if he was able to demonstrate that the City owed him a duty. ¶11 Therefore, while we decline to reach the merits of the District Court’s application of the public duty doctrine, we affirm the District Court’s ruling on the cross motions for summary judgment for the reasons stated above. ¶12 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. In the opinion of this Court, this case presents a question controlled by settled law. 6 ¶13 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

September 13, 2016

c7cee891-ab75-439c-8903-81d0b4ab941e

STATE v SMALL

N/A

88-451

Montana

Montana Supreme Court

I N THE SUPREME COURT OF THE STATE O F MONTANA STATE OF MONTANA, P l a i n t - i f f a n d R e s p o n d e n t , -vs- FATINA SMALL, D e f e n d a n t a n d A p p e l l a n t . APPEAL FROM: D i s t r i c t C o u r t of t h e E i g h t h J u d i c i a l D i s t r i c t , I n and for t h e C o u n t y of C a s c a d e , T h e H o n o r a b l e Joel Roth, Judge p r e s i d i n g . COUNSEL O F RECORD: For A p p e l l a n t : John K e i t h , G r e a t F a l l s , M o n t a n a For R e s p o n d e n t : H o n . M a r c R a c i c o t , A t t o r n e y G e n e r a l , H e l e n a , M o n t a n a D o r o t h y K c c a r t e r , A s s t . A t t y . G e n e r a l , H e l e n a P a t r i c k L . P a u l , C o u n t y A t t o r n e y , G r e a t F a l l s , M o n t a n a ; S t e p h e n E . H a g e r m a n , D e p u t y C o u n t y A t t o r n e y S u b m i t t e d on B r i e f s : D e c . 1 6 , 1 9 8 8 D e c i d e d : January 5 , 1 9 8 9 6 - r i + - - , - (2, . , .- - ED SMITH C l e r k Mr. Chief Justice J. A. Turnage delivered the Opinion of the Court. Defendant probationer Fatina Small appeals an order from the Eighth Judicial District, Cascade County, revoking her deferred sentence for probation violations and sentencing her to serve three years in the Montana State Prison at Deer Lodge. (Sentence suspended in its entirety.) We affirm. The issue on appeal is whether the warrantless search initiated by defendant's probation officer pursuant to the terms of her probation violated her constitutional rights. We hold that it did not. Defendant was charged by information on September 3, 1986, with three counts of felony drug violations for the sale of dangerous drugs as specified by 5 50-32-101, MCA. Defendant plead not guilty to each count. Later, pursuant to a written plea agreement with the Cascade County Attorney's deputy, defendant plead guilty to the first count and the other two were dismissed. Defendant's sentence was deferred for three years based on certain probation conditions. The pertinent conditions read as follows: 1. Defendant is prohibited from pos- sessing or using any dangerous drugs except those prescribed by a medical doctor. 5. Upon reasonable suspicion that the Defendant is violating the above condi- tion relating to the no use of marijuana or any other dangerous drug, the Defen- dant shall be subject to search and seizure at any time of the day or night, by any law enf orcement officer , without the necessity of obtaining a search warrant. Testimony indicated that special provisions were recom- mended in the presentence report by the Adult Probation and Parole Office due to defendant's admissions of the regular use of dangerous and illegal drugs. The provision specifi- cally recommended by Probation Officer Rick Holzheimer read as follows: You shall, while on parole, or during the period of your probation if so stipulated by the Court, submit to a search of your person, automobile or place of residence by a probation/ parole officer, at any time of the day or night, with or without a warrant, upon reasonable cause as ascertained by a probation/parole officer. The trial judge substituted his special condition number 5, supra, for the one recommended by Holzheimer. On February 25, 1988, a confidential informant contact- ed Captain Robert Stevens of the Great Falls Police Depart- ment and stated that the person living at 411 Sixth Street in Great Falls (defendant's address) was dealing in marijuana and distributing it. The informant contacted Stevens again approximately two weeks later on March 4, 1988, indicating to him that drugs would be at the same location that afternoon and available for sale. Stevens testified to the reliability and on-going nature of the accurate information from this confidential informant. On both occasions, Stevens relayed this information to Detective Brian Lockerby. Brian Lockerby notified defendant's probation officer, Rick Holzheimer, after the first contact by the informant and was informed of defendant's conditional probation at that time. After the second contact, Lockerby notified Detective Renman and then Holzheimer. Lockerby testified that he did n.ot attempt to obtain a search warrant because he was advised of the probation pro~~ision authorizing a warrantless search and that he anticipated Holzheimer would bring the agreement with him if they were to search defendant's premises. After alerting Holzheimer, Renman and Lockerby went to the defendant's residence that day. They arrived about 5:00 p.m. and watched the house for approximately one hour waiting for Holzheimer to arrive. Once Holzheimer arrived at the defendant's residence, Detective Sinnott knocked on defendant's door. The four identified themselves to the defendant and explained their presence. They entered the house at that time and found two containers of marijuana and other drug paraphernalia. Defen- dant was issued citations by the police at that time and was verbally advised by Holzheimer that she was in violation of her probation for possession of the drug. Holzheimer further testified that he smelled marijuana upon entering the resi- dence and defendant's eyes were glassy. Defendant filed a motion to suppress this evidence at the revocation hearing. The motion was denied at the June 6, 1988, hearing. Defendant appeals. Defense counsel contends that this warrantless search initiated by the probation officer is patently unconstitu- tional in this case and the fruits of the search should be suppressed based on State v. Fogerty (1980), 187 Mont. 393, 610 P.2d 140. Fogerty held that the unlimited warrantless search, to be initiated without any reasonable grounds, was an unconstitutional provision in the defendant's probation conditions. However, pending the instant appeal, Fogerty was overruled by this Court in State v. Burke and Roth (Mont. 19881, - P.2d , 45 St.Rep. 2278. Burke and Roth and its predecessors focused on the lack of a search warrant and lack of a basis for the police to institute the warrantless search. Such is not the focus here, because this case turns on the conduct of the probation officer. Defendant's probation officer in the case at bar not only initiated the search of defendant's residence, but was present and actually participated in it. The officers testi- fied that they waited in front of the residence for one hour for Holzheimer to arrive and direct the search. Probation Officer Holzheimer testified that he authorized the search, went to the premises to authorize and supervise the search and was accompanied into the house by law enforcement person- nel for his own safety. Such conduct is constitutionally sound under Montana law. We need not discuss the warrantless search on a Fogerty, Burke and Roth analysis of the search provision itself, because the search in this case was instigated and supervised by a probation officer and was not independent police action. Such a search by a probation officer of his probationer, probationer's car, premises or other belongings is lawful. As was stated in Burke and Roth: "The probation officer must be able to supervise the probationer, and upon his judgment and expertise, search the probationer's resi- dence or cause it to be searched." 45 St.Rep. at 2283. Additionally, reasonable grounds existed to initiate the probation officer's search. The communications between the Great Falls Police Department and the Adult Probation and Parole Office as well as the testimony of Officer Stevens evidence the reliability of the confidential informant. Thus, it was reasonable to rely on the accurate infor- mation from the confidential informant and to act on that information. Because the search of probationer's residence was initiated by her own probation officer based on a reasonable suspicion of a probation vi.olation, the search of Fatina Small's residence was lawful. Defendant's motion to suppress evidence was properly denied. We find no abuse of the trial court's discretion based on the foregoing substantial credi- ble evidence in this case. Judgment affirmed. F 7 e concur:

January 5, 1989

12f7105d-b2b6-4656-b905-f36ed0215d2f

State v. Marino

2016 MT 220

DA 14-0684

Montana

Montana Supreme Court

DA 14-0684 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 220 STATE OF MONTANA, Plaintiff and Appellee, v. NICHOLAS ANDREW MARINO, Defendant and Appellant. APPEAL FROM: District Court of the Fifteenth Judicial District, In and For the County of Roosevelt, Cause No. DC 13-18 Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellant: Paul D. Sullivan, Measure, Sampsel, Sullivan & O’Brien, P.C., Kalispell, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Ralph J. Patch, Roosevelt County Attorney, Jordan W. Knudsen, Deputy County Attorney, Wolf Point, Montana Submitted on Briefs: August 3, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 14-0684 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Appellant Nicholas Andrew Marino (Marino) appeals the order of the Fifteenth Judicial District Court, Roosevelt County, denying his motion to suppress. We affirm. ¶2 We consider the following issue on appeal: ¶3 Did the District Court err by concluding that law enforcement properly conducted a canine sniff of Marino’s vehicle based upon particularized suspicion? FACTUAL AND PROCEDURAL BACKGROUND ¶4 At approximately 1:30 a.m. on June 2, 2013, Marino drove his vehicle out of the Town Pump gas station in Wolf Point, Montana, without the headlights turned on. Noticing the lack of headlights, Deputy Sheriff Corey Reum (Deputy Reum) initiated a traffic stop of Marino’s car. As Deputy Reum pulled closer to Marino’s vehicle, he noticed the vehicle did not have a rear license plate. When Deputy Reum exited his vehicle and approached Marino’s car on foot, he was unable to see inside Marino’s vehicle with his flashlight because the windows were covered in extremely dark tinting. ¶5 Deputy Reum asked to see Marino’s driver’s license, but Marino was only able to produce a California identification card. Deputy Reum advised Marino that vehicles are required by law to display license plates. Marino replied that his vehicle’s license plates were in the trunk of the car because, as testified to by Deputy Reum, “his girlfriend told him to take them off because they would attract attention to himself.” Marino, with Deputy Reum’s permission, then exited the vehicle to retrieve the plates from the trunk. ¶6 Marino walked to the trunk of the car, opened it, and leaned into the trunk to retrieve the plates. When Marino bent over, Deputy Reum noticed a sheath under 3 Marino’s clothing. Deputy Reum told Marino to place his hands on the trunk for a pat down. Marino began to shake nervously as Deputy Reum began the search. Deputy Reum removed a large knife in a sheath concealed under Marino’s shirt and handed it to another responding officer, Officer Mehin Wehbe (Officer Wehbe), of the Wolf Point Police Department. Deputy Reum continued his pat down and discovered a large lump in Marino’s front pocket which he could not rule out as a weapon. Deputy Reum removed the object, which turned out to be a large roll of cash (later determined to be $2,914) attached to a Visa debit card. Deputy Reum then felt a strap on Marino’s body that ran toward his armpit, and Marino informed him it was a concealed weapon. Deputy Reum ordered Marino to the ground and handcuffed him before safely removing the pistol from the concealed holster. ¶7 Deputy Reum had significant prior experience with narcotics investigations and concluded that indicators for drug trafficking were present. After placing Marino under arrest for carrying an unlicensed, concealed weapon, Deputy Reum brought his canine unit from his vehicle to check Marino’s car for odors. The canine alerted near the rear of the vehicle. Marino’s car was towed to the Roosevelt County Sheriff’s Office and sealed with evidence tape. A search warrant was obtained and law enforcement discovered methamphetamine during the search of the vehicle. ¶8 Marino was charged with Criminal Possession of Dangerous Drugs with Intent to Distribute pursuant to § 45-9-103, MCA (2013), with a persistent felony offender designation under § 46-18-502, MCA. Marino moved to suppress the evidence seized in 4 the search of his car, arguing there was no particularized suspicion of wrongdoing involving narcotics sufficient to justify a canine sniff. The District Court denied the motion, concluding there were sufficient facts for Deputy Reum to reasonably believe Marino was engaged drug trafficking. Marino entered a plea agreement, admitting to the charge and to his status as a persistent felony offender, but reserving his right to appeal the District Court’s denial of his motion to suppress. Marino appeals. STANDARD OF REVIEW ¶9 We review a district court’s denial of a motion to suppress to determine whether the findings of fact are clearly erroneous and whether the court’s interpretation and application of the law was correct. State v. Goetz, 2008 MT 296, ¶ 9, 345 Mont. 421, 191 P.3d 489 (citing State v. Copelton, 2006 MT 182, ¶ 8, 333 Mont. 91, 140 P.3d 1074). A district court’s findings are clearly erroneous if they are not supported by substantial credible evidence, if the court has misapprehended the effect of the evidence, or if our review of the record leaves us with a definite and firm conviction that a mistake has been made. State v. Ellis, 2009 MT 192, ¶ 20, 351 Mont. 95, 210 P.3d 144 (citing State v. Lewis, 2007 MT 295, ¶ 17, 340 Mont. 10, 171 P.3d 731). DISCUSSION ¶10 Marino argues that the use of a canine sniff on his vehicle was a warrantless search that must be supported by a warrant exception, and that all such exceptions, including the canine sniff in this case, must be justified by exigent circumstances, citing State v. Hardaway, 2001 MT 252, 307 Mont. 139, 36 P.3d 900. As such, Marino argues 5 the canine sniff of his car was improper because no exigent circumstances remained after Deputy Reum removed any potential threat by arresting and placing Marino in handcuffs. The State argues that our reasoning in State v. Tackitt, 2003 MT 81, 315 Mont. 59, 67 P.3d 295, where we held that canine searches of constitutionally protected areas need only be supported by particularized suspicion, controls the outcome in this case. ¶11 Marino is correct that a canine search of a container in which a person has a reasonable expectation of privacy is a search. That is the essence of the first part of our holding in Tackitt. Tackitt, ¶ 20. However, the State accurately explains the second part of our holding in Tackitt, that law enforcement needs only particularized suspicion to conduct a canine search without a warrant. Tackitt, ¶ 31. Drug-Canine Exception to the Warrant Requirement ¶12 “The threshold question in a search case is whether there is an expectation of privacy which society is prepared to recognize as objectively reasonable.” Tackitt, ¶ 17 (citing State v. Scheetz, 286 Mont. 41, 46, 950 P.2d 722, 724 (1997)). If there is a reasonable expectation of privacy, the nature of the state’s intrusion must also be reasonable. Tackitt, ¶ 17. Regarding automobiles in particular, “when a person stores something in a concealed area of a vehicle and seeks to preserve their privacy, that privacy has constitutional protections.” Tackitt, ¶ 20; accord State v. Elison, 2000 MT 288, ¶ 51, 302 Mont. 228, 14 P.3d 456. As such, a search—including a canine sniff—of the concealed areas of a vehicle is subject to constitutional protections. Tackitt, ¶ 22; 6 State v. Hart, 2004 MT 51, ¶¶ 20–21, 320 Mont. 154, 85 P.3d 1275; State v. Meza, 2006 MT 210, ¶ 22, 333 Mont. 305, 143 P.3d 422. ¶13 Generally, warrantless searches are per se unreasonable subject to a few, narrowly drawn exceptions. Elison, ¶ 39; State v. Munson, 2007 MT 222, ¶ 50, 339 Mont. 68, 169 P.3d 364. One of those exceptions, as we established in Tackitt, is the use of a drug or narcotic detecting canine where law enforcement has particularized suspicion and the odors from the searched container are exposed in the public. Tackitt, ¶ 29; accord Hart, ¶¶ 20–21; State v. Stoumbaugh, 2007 MT 105, ¶ 18, 337 Mont. 147, 157 P.3d 1137. ¶14 As we noted in Tackitt, government has a significant interest in discouraging illegal drug trafficking. Tackitt, ¶ 29. Discovering illegal drug trafficking is often difficult because it involves activities that usually appear innocent and trafficking, by its nature, is inherently transient. Tackitt, ¶ 29. Canine sniffs are far less intrusive than an actual, physical search of a space because a sniff only examines the odors on the exterior of the container. Tackitt, ¶ 29; Meza, ¶ 22. Further, unlike thermal scans, State v. Siegal, 281 Mont. 250, 274–75, 934 P.2d 176, 190–91 (1997) (noting thermal scans do not differentiate between legal and illegal activities), overruled in part on other grounds, State v. Kuneff, 1998 MT 287, ¶¶ 18–19, 291 Mont. 474, 970 P.2d 556, a canine sniff is both selective and accurate because the canine only alerts on the presence of the contraband it has been trained to detect. Tackitt, ¶ 29. As such, the minimally intrusive and accurate nature of a canine sniff supported by particularized suspicion appropriately 7 balances the enhanced individual privacy interests under the Montana Constitution with governmental interests. Tackitt, ¶ 29. ¶15 Marino argues that an exigency requirement should be implied in all warrantless searches based on our holding in Hardaway. However, Marino appears to confuse the requirements for the drug canine warrant exception with the individual requirements for the search incident to arrest, automobile, exigency, and plain view warrant exceptions. Hardaway held the search incident to arrest exception implied an exigency requirement only for § 46-5-102(4), MCA. Hardaway, ¶ 57. As our case law demonstrates, these warrant exceptions are separate and independent, and each exception has its own requirements. E.g., Elison, ¶ 43 (automobile); State v. Wakeford, 1998 MT 16, ¶¶ 22–24, 287 Mont. 220, 953 P.2d 1065 (exigent circumstances); State v. Bassett, 1999 MT 109, ¶¶ 52–53, 294 Mont. 327, 982 P.2d 410 (plain view). There is no uniform requirement for all warrant exceptions that exigency must always be present. Accordingly, exigent circumstances need not be established before law enforcement may conduct a canine sniff search. Rather, law enforcement may conduct a canine sniff search of a container in which a person has a reasonable expectation of privacy if (1) the officers have particularized suspicion; and (2) the odors from that container are freely exposed to the public. Tackitt, ¶ 31. ¶16 Marino had a reasonable expectation of privacy in the concealed contents of his car and the canine sniff of his car was a warrantless search. However, the odors at question were freely exposed to the public because Marino’s vehicle was on a public 8 road. As such, we must examine whether Deputy Reum had particularized suspicion to conduct the canine sniff of Marino’s car. Particularized Suspicion to Conduct a Drug-Canine Sniff ¶17 Particularized suspicion requires “(1) objective data from which an experienced police officer can make certain inferences; and (2) a resulting suspicion that the person is or has been engaged in wrongdoing.” Stoumbaugh, ¶ 18. “Whether a particularized suspicion exists represents a question of fact determined by examining the totality of circumstances surrounding the investigation stop.” Meza, ¶ 25. “In evaluating the totality of the circumstances, a court should consider the quantity, or content, and quality, or degree of reliability, of the information available to the officer.” State v. Pratt, 286 Mont. 156, 161, 951 P.2d 37, 40 (1997) (citing Alabama v. White, 496 U.S. 325, 330, 110 S. Ct. 2412, 2416 (1990)). ¶18 In Tackitt, we determined that particularized suspicion was lacking because the informant was anonymous and unconfirmed, and police investigation verified only innocent public information and stale prior convictions. Tackitt, ¶¶ 34–41. However, in Hart, we affirmed the district court’s finding of particularized suspicion for a canine search where the officers approached the defendant’s home to serve an arrest warrant for felony criminal sale of dangerous drugs, saw the defendant driving away, and, after pulling him over, observed furtive movements consistent with an individual attempting to either get a weapon or hide something. Hart, ¶ 21. Similarly, in Meza, we upheld the finding of particularized suspicion where the defendant illegally parked in the middle of 9 the street in front of a known narcotics operation, acted nervously when pulled over, and police dispatch informed the officer the defendant had a history of narcotics use. Meza, ¶¶ 24–25. Finally, in Stoumbaugh, we upheld a determination of particularized suspicion to use a canine search of a vehicle where the officers responded to a report of illegal drug use, the defendant’s family disclosed the defendant’s location in their home so the officers could arrest the defendant on pending arrest warrants, the defendant admitted to drug charges in Washington state, the police confirmed the felony drug charges, and the defendant urgently attempted to tow her vehicle away at a cost exceeding the value of the vehicle itself. Stoumbaugh, ¶¶ 21–24. ¶19 Here, the District Court did not err in determining that particularized suspicion existed to support the canine sniff of Marino’s car. Marino was pulled over by Deputy Reum because he was driving without headlights at 1:30 a.m. Marino’s car had extremely dark window tinting and did not have a rear license plate. When informed that his vehicle should have license plates, Marino told Deputy Reum that he had removed them, on the advice of his girlfriend, so he would not attract attention, thus implying he was attempting to avoid detection. Marino did not have a driver’s license even though he was operating a vehicle. While Marino was retrieving the license plates, Deputy Reum noticed a sheath concealed under Marino’s shirt. During the ensuing pat down of Marino, Deputy Reum discovered a concealed knife, a roll of cash in the amount of $2,914, and an unlicensed, concealed weapon. 10 ¶20 As such, Deputy Reum had sufficient, objective information to suspect that Marino was engaged in illegal narcotics trafficking. Whether particularized suspicion exists is a question of fact determined by the totality of the circumstances. Meza, ¶ 25. On these facts, the District Court correctly determined there was particularized suspicion to support the canine search of Marino’s car. ¶21 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ PATRICIA COTTER

September 6, 2016

7c21c532-6ebf-4ff0-8313-ceafe03827b7

Clark Fork Coalition v. Montana Well Drillers Ass’n

2016 MT 229

DA 14-0813

Montana

Montana Supreme Court

DA 14-0813 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 229 THE CLARK FORK COALITION, a non-profit organization KATRIN CHANDLER, an individual, BETTY J. LANNEN, an individual, POLLY REX, an individual, and JOSEPH MILLER, an individual, Petitioners and Appellees, v. JOHN E. TUBBS, in his capacity as Director of the Montana Department of Natural Resources and Conservation and THE MONTANA DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, an executive branch agency of the State of Montana, Respondents, v. MONTANA WELL DRILLERS ASSOCIATION, Intervenors and Appellants, v. MONTANA ASSOCIATION OF REALTORS and MONTANA BUILDING INDUSTRY ASSOCIATION, Intervenors and Appellants, v. MOUNTAIN WATER COMPANY, Intervenor. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV 2010-874 Honorable Jeffrey M. Sherlock, Presiding Judge 09/13/2016 Case Number: DA 14-0813 2 COUNSEL OF RECORD: For Appellants: Abigail J. St. Lawrence (Argued), Bloomquist Law Firm, Helena, Montana (Attorney for MAR and MBIA) Ryan K. Mattick (Argued), Moore, O’Connell & Refling, P.C., Bozeman, Montana (Attorney for Montana Well Drillers Association) For Appellees: Laura King (Argued), Matthew K. Bishop, Western Environmental Law Center, Helena, Montana (Attorneys for the Clark Fork Coalition) Stephen R. Brown (Argued), J. Andrew Person, Garlington, Lohn & Robinson, PLLP, Missoula, Montana (Attorneys for Mountain Water Company) For Amicus Curiae: Tara DePuy, Attorney at Law, PLLC, Livingston, Montana (Attorney for Montana Associate of Counties) Steven J. Fitzpatrick, Browning, Kaleczyc, Berry & Hoven, PC, Great Falls, Montana Jesse J. Richardson, Jr., Attorney at Law, Morgantown, West Virginia (Attorneys for Water Systems Council) Jack R. Tuholske, Attorney at Law, Missoula, Montana (Attorney for Bitterrooters for Planning, et al.) Thomas J. Jodoin, City Attorney, Helena, Montana Chris D. Tweeten, Tweeten Law, P.L.L.C., Missoula, Montana (Attorneys for Montana League of Cities and Towns) Laura S. Ziemer, Patrick Byorth, Meg Casey, Stan Bradshaw, Montana Trout Unlimited, Bozeman, Montana Argued and Submitted: May 18, 2016 Decided: September 13 2016 Filed: __________________________________________ Clerk 3 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 The Water Use Act provides a comprehensive permit based system for new appropriations of water in Montana. The Act permits certain groundwater appropriations to be exempt from the permitting process. Relevant here, § 85-2-306(3)(a)(iii), MCA, provides an exemption when a groundwater appropriation does not exceed 35 gallons per minute and 10 acre-feet per year. However, the subsection also provides an “except[ion]” to the exemption when a “combined appropriation” from the same source by two or more wells or developed springs exceeds 10 acre-feet per year, regardless of flow rate. ¶2 The term “combined appropriation” is not defined within the Water Use Act. Since the adoption of § 85-2-306(3)(a)(iii), MCA, the state agency charged with administering the Act, the Department of Natural Resources and Conservation (DNRC), has taken contradictory positions regarding the meaning of the term. Specifically, within a period of six years, the DNRC promulgated consecutive rules with conflicting interpretations as to whether groundwater developments must be physically connected to constitute a “combined appropriation.” Initially, in 1987, three months after the Legislature adopted the “combined appropriation” language, the DNRC promulgated Admin. R. M. 36.12.101(7) (1987), which provided that “[g]roundwater developments need not be physically connected nor have a common distribution system to be considered a ‘combined appropriation.’” However, in 1993, the DNRC reversed its position and adopted the current administrative rule, Admin. R. M. 36.12.101(13), which 4 states that the term “combined appropriation” means “groundwater developments, that are physically manifold into the same system.” ¶3 After an adverse ruling from the DNRC Hearings Examiner, a group of senior water users—Katrin Chandler, Betty Lannen, Polly Rex, Joseph Miller, and the Clark Fork Coalition (collectively, the Coalition)—challenged the validity of Admin. R. M. 36.12.101(13) in the First Judicial District Court, Lewis and Clark County. The Coalition maintained that the DNRC’s definition of “combined appropriation” was inconsistent with the applicable statute arguing that the statute does not require physical connection. The District Court agreed. The court invalidated Admin. R. M. 36.12.101(13), reinstated Admin. R. M. 36.12.101(7) (1987), and directed the DNRC to formulate a new administrative rule consistent with the court’s order. The Montana Well Drillers Association, the Montana Association of Realtors, and the Montana Building Industry Association (collectively, the Well Drillers) appeal from that order.1 We affirm. ¶4 We address the following issues on appeal: 1. Whether the District Court erred by invalidating Admin. R. M. 36.12.101(13). 2. Whether the District Court erred by reinstating Admin. R. M. 36.12.101(7) (1987). 3. Whether the District Court erred by directing the DNRC to institute rulemaking consistent with the court’s order. FACTUAL AND PROCEDURAL BACKGROUND ¶5 In 1973, the Montana Legislature instituted the current water rights system by adopting the Montana Water Use Act, § 85-1-101, MCA, et seq. The Act sets forth the 1 The DNRC has chosen not to appeal the District Court’s decision. 5 statutory framework under which water rights are obtained, administered, and adjudicated. A critical component of the Act is the permit system administered by the DNRC. With certain exceptions, the Act requires those seeking new appropriations of water to apply to the DNRC for a permit. Section 85-2-301, MCA. The primary function of this permit based system is the protection of senior water rights from encroachment by prospective junior appropriators adversely affecting those rights. Section 85-2-101(4), MCA. ¶6 Consistent with this purpose, the Act imposes both substantive and procedural protections for water right users. Substantively, before the issuance of a new water appropriation, the Act requires that a prospective junior appropriator show that water is legally and physically available, the proposed use of water is for a beneficial use, and the new appropriation will not adversely affect existing water rights of senior prior appropriators. Section 85-2-311(1)-(2), MCA. Procedurally, a prospective junior appropriator must provide notice, through the DNRC, to senior users who may be affected by the proposed appropriation and must permit senior users an opportunity to object to the prospective water right. Section 85-2-307, MCA. If objections do arise from senior users, the DNRC must hold a contested hearing on the objections. Section 85-2-309, MCA. ¶7 Senior users are afforded even more protection in highly appropriated basins in Montana that have been closed from further surface water appropriations. In these “closed basins,” where water claims often exceed water availability, the DNRC may not issue new surface water permits. Section 85-2-360(1)-(3), MCA. The DNRC may 6 consider groundwater permits, but the process for obtaining a groundwater permit in a closed basin is demanding. In addition to the general requirements for obtaining a permit, the appropriator must commission a hydrogeological report to determine if the proposed appropriation could result in a net depletion of surface water. Section 85-2-360(2), MCA. If the report indicates a hydrogeological connection, then the appropriator must show that there will be no net depletion of water. Section 85-2-360(3)(b), MCA. ¶8 The Act provides certain exemptions to the rigorous permitting process. Section 85-2-306(1)-(9), MCA. If an appropriation qualifies for an exemption, none of the permitting procedures under the Act constrain the proposed appropriation. See generally § 85-2-306 (1)-(9), MCA. A prospective appropriator need not show that water is legally and physically available; that the new appropriation will not deplete surface flow; or that the water will not be used inconsistently with senior rights. See generally § 85-2-306(1)-(9), MCA. Nor does the appropriator need to provide notice to senior users or allow senior users an opportunity to object. See generally § 85-2-306 (1)-(9), MCA. Similarly, the more onerous requirements for obtaining an appropriation in a closed basin are inapplicable. See generally § 85-2-306 (1)-(9), MCA. ¶9 Relevant to this case, § 85-2-306(3)(a)(iii), MCA, provides an exemption for groundwater appropriations considered de minimis; that is, those appropriations that do not exceed 35 gallons a minute and 10 acre-feet per year. In 1987, the Legislature incorporated the term “combined appropriation” into the de minimis groundwater exemption. Section 85-2-306(3)(a)(iii), MCA (1987), provided: 7 a permit is not required before appropriating groundwater by means of a well or developed spring with a maximum appropriation of less than 100 gallons per minute, except that a combined appropriation from the same source by two or more wells or developed springs exceeding this limitation requires a permit. Shortly after the incorporation of the “combined appropriation” language into the statute, the DNRC promulgated Admin. R. M. 36.12.101(7) (1987) (hereinafter, the 1987 rule). The 1987 rule provided that wells or developed springs “need not be physically connected nor have a common distribution system to be considered a ‘combined appropriation.’” Instead, the 1987 rule instructed that two or more groundwater developments constitute a “combined appropriation” if used together for a single “project or development.” ¶10 In 1991, the Legislature amended the statute. The Legislature reduced the permissible flow rate and imposed a volume limitation on the exemption, but retained the term “combined appropriation.” Section 85-2-306(3)(a)(iii), MCA, as amended in 1991, provides: a permit is not required before appropriating ground water by means of a well or developed spring with a maximum appropriation of 35 gallons a minute or less, not to exceed 10 acre-feet a year, except that a combined appropriation from the same source from two or more wells or developed springs exceeding this limitation requires a permit. ¶11 In 1993, the DNRC promulgated Admin. R. M. 36.12.101(13) (hereinafter, the 1993 rule), significantly altering the administrative definition of the term “combined appropriation.” The 1993 rule defines “combined appropriation” as “two or more groundwater developments, that are physically manifold into the same system.” Under the 1993 rule, appropriations from the same source are exempt from the permitting 8 process as long as the groundwater developments making up the appropriations remain physically unconnected and do not exceed 10 acre-feet per year. Thus, the current rule allows an appropriator to avoid the permitting process for an infinite number of appropriations from the same source—with each appropriation consuming up to 10 acre- feet per year—so long as the appropriator does not physically connect the groundwater developments. ¶12 In 2013, the Legislature again amended the statute. The Legislature further reduced the permissible flow in stream depletion zones, left the permissible flow rate unaltered outside stream depletion zones, and once again retained the term “combined appropriation.” Section 85-2-306(3)(a)(iii), MCA, as amended in 2013, provides, in relevant part: a permit is not required before appropriating ground water by means of a well or developed spring: . . . (iii) when the appropriation is outside a stream depletion zone, is 35 gallons a minute or less, and does not exceed 10 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding 10 acre-feet, regardless of the flow rate, requires a permit; or (iv) when the appropriation is within a stream depletion zone, is 20 gallons a minute or less, and does not exceed 2 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding this limitation requires a permit. ¶13 The Coalition cites data compiled by the DNRC that, since the DNRC’s promulgation of the 1993 rule, exempt appropriations under § 85-2-306(3)(a)(iii), MCA, have grown steadily by approximately 3,000 each year. The DNRC estimates that there are now 113,000 exempt appropriations in Montana, consuming significant amounts of 9 water. The DNRC anticipates that exempt appropriations will continue to grow rapidly. By the year 2020, the DNRC projects that there could be an additional 78,000 exempt appropriations in Montana. Closed basins have not been immune from this trend. The DNRC estimates that 30,000 new exempt appropriations will be added in the next two decades in closed basins alone, resulting in an additional 20,000 acre-feet per year of water consumed in these already over-appropriated basins. The DNRC has recently acknowledged the concerns of senior users that the cumulative effects of these exempt appropriations are having a significant impact in terms of reducing groundwater levels and surface water flows and that the cumulative impact of the appropriations may be harming senior water users’ existing rights. ¶14 On November 30, 2009, the Coalition petitioned the DNRC for a declaratory ruling that the 1993 rule was inconsistent with the exemption under § 85-2-306(3)(a)(iii), MCA, asserting that the term “combined appropriation” as used in the statute does not require physical connectivity between ground water developments. In the petition, the Coalition requested that the court invalidate the 1993 rule, reinstate the 1987 rule, and order the DNRC to conduct further rule making. ¶15 On August 17, 2010, the DNRC Hearings Examiner denied the Coalition’s petition. The examiner concluded that the administrative rule was not in conflict with § 85-2-306(3)(a)(iii), MCA, reasoning that “a common, perhaps the most common definition, of ‘combined’ is physically joined together.” The examiner acknowledged, however, that the administrative rule had caused the proliferation of exempt appropriations in a way that was not anticipated by the Legislature. As a result, the 10 examiner ordered the DNRC to initiate proposed rulemaking to repeal the 1993 rule and adopt a new administrative rule that would align more closely with legislative intent. The DNRC thereafter attempted to repeal and replace the 1993 rule, but, for reasons not made entirely clear by the record, failed to do so. ¶16 On September 14, 2010, the Coalition filed a complaint in District Court, challenging the DNRC Hearings Examiner’s denial of its petition. The court invalidated the 1993 rule, reinstated the 1987 rule, and directed the DNRC to formulate a new administrative rule consistent with the court’s order. The court provided three reasons for its decision to invalidate the administrative rule. First, after examining the 1987 legislative debate surrounding the incorporation of the term “combined appropriation” into the statute, the court explained that clearly, “the legislature was under the impression that the reference to ‘combined’ did not require two wells to be physically connected.” Second, the court noted that the DNRC promulgated the 1987 rule, which did not require physical connection, immediately after the incorporation of the term into the statute. Lastly, the court explained that the 1993 rule fails to protect senior water users in accordance with the Act’s express purpose. The court explained through the use of a hypothetical that the administrative rule allows large consumptive water uses to be established, without going through the permitting process, at the expense of senior users: The current definition of “combined appropriation” allows 1,000 new wells as part of a 1,000 lot subdivision to escape review under DNRC permitting . . . [and] allow[s] up to 10,000 acre feet a year of water to be potentially diverted from senior water rights holders neighboring or near the new 1,000 lot subdivision without any review. ¶17 The Well Drillers timely appealed from the District Court’s decision. 11 STANDARD OF REVIEW ¶18 “The interpretation of a statute is a question of law that we review for correctness.” Mont. Dep’t of Revenue v. Priceline.com, Inc., 2015 MT 241, ¶ 6, 380 Mont. 352, 354 P.3d 631. “Whether an administrative regulation impermissibly conflicts with a statute is a question of law to be decided by the court.” Gold Creek Cellular of Mont. L.P. v. State, 2013 MT 273, ¶ 9, 372 Mont. 71, 310 P.3d 533. “We review a district court’s conclusions of law to determine if they are correct.” Gold Creek Cellular, ¶ 9. DISCUSSION ¶19 1. Whether the District Court erred by invalidating Admin. R. M. 36.12.101(13). ¶20 When we assess the validity of an agency rule, we must begin with an examination of the statute itself. Our objective in interpreting a statute is to implement the objectives the Legislature sought to achieve. Montana Wildlife Fed’n v. Sager, 190 Mont. 247, 264, 620 P.2d 1189, 1199 (1980). The legislative intent is to be ascertained, in the first instance, from the plain meaning of the words used. Boegli v. Glacier Mountain Cheese Co., 238 Mont. 426, 429, 777 P.2d 1303, 1305 (1989). If the intent of the Legislature can be determined from the plain meaning of the words used in the statute, the plain meaning controls and the Court need go no further nor apply any other means of interpretation. Phelps v. Hillhaven Corp., 231 Mont. 245, 251, 752 P.2d 737, 741 (1988). In determining the statutory mandate given to a statute by the Legislature, it is important to remember that our role “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 12 inserted.” Section 1-2-101, MCA. Words and phrases used in a statute are to be construed according to the context in which they are found, and according to their normal usage, unless they have acquired some peculiar or technical meaning. Section 1-2-106, MCA. “When the legislature has not defined a statutory term, we consider the term to have its plain and ordinary meaning.” Giacomelli v. Scottsdale Ins. Co., 2009 MT 418, ¶ 18, 354 Mont. 15, 221 P.3d 666. For the same reason that a contract term is not rendered ambiguous merely because the parties disagree as to its meaning, a statutory term is not rendered ambiguous because of subsequent inconsistent rules implemented by the agency. See, e.g., Scottsdale Ins. Co., ¶ 32; Dollar Plus Stores, Inc. v. R-Montana Assoc., L.P., 2009 MT 164, ¶ 17, 350 Mont. 476, 209 P.3d 216; Heggem v. Capitol Indem. Corp., 2007 MT 74, ¶ 42, 336 Mont. 429, 154 P.3d 1189. ¶21 Section 85-2-306(3)(a)(iii), MCA, is one amongst several statutory exemptions to the water permit process and provides: When the appropriation is outside a stream depletion zone, is 35 gallons a minute or less, and does not exceed 10 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding 10 acre-feet, regardless of flow rate, requires a permit; ¶22 The statute thus allows an exemption from the permitting process and provides for a lawful appropriation when the amount of appropriation does not exceed 35 gallons per minute and 10 acre-feet per year. However, even if this criterion is satisfied, a combined appropriation from the same source of two or more wells or developed springs is “except[ed]” from the exemption if the combined appropriation exceeds 10 acre-feet per year, regardless of flow rate. The exception applies when (1) there are two or more wells 13 or developed springs, (2) that are from the same source, (3) where the combined appropriation exceeds 10 acre-feet per year. The exception removes any consideration of flow rate, but adds volume considerations when appropriations are from the same source, thus expressing the Legislature’s intent to limit the impact of the appropriation that would occur on any particular source of water to less than 10 acre-feet per year. ¶23 To “appropriate” means to “divert, impound, or withdraw . . . a quantity of water for a beneficial use . . . .” Section 85-2-102(1), MCA (emphasis added). An appropriation refers to the amount of water one has the legal right to use as determined through the process sanctioned by the Act. “Combined” means “to bring into such close relationship as to obscure individual characters,” to “merge,” “intermix,” “blend,” or “unite into a single number or expression.” Webster’s Collegiate Dictionary 228 (10th ed. 1993). In § 85-2-306 (3)(a)(iii), MCA, “combined” is used as an adjective to modify the noun “appropriation” and therefore refers to the combined quantity of water which an appropriator has the legal right to use. The word “combined” does not precede “wells” or “developed springs” and therefore does not modify either form of ground development in a manner which would indicate a “combined well” or “combined developed spring,” as Well Drillers contend. “In ascertaining plain meaning, we have ‘long adhered to ordinary rules of grammar.’” Bates v. Neva, 2014 MT 336, ¶ 15, 377 Mont. 350, 339 P.3d 1265 (quoting Thompson v. J.C. Billion, Inc., 2013 MT 20, ¶ 22 n. 5, 368 Mont. 299, 294 P.3d 397). See also Jay v. Sch. Dist. No. 1 of Cascade Cnty., 24 Mont. 219, 225, 61 P. 250, 252 (1900)). Consistent with these common sense meanings and statutory definitions, § 85-2-306(3)(a)(iii), MCA, provides that a “combined appropriation” may not exceed 14 the combined quantity of 10 acre-feet per year, when there is more than one well or developed spring. Indeed, the very statutory definitions of “well,” defined in § 85-2-102(31), MCA, as “an artificial opening or excavation in the ground . . .,” and “developed spring,” defined in § 85-2-102(11), MCA, as “any point where ground water emerges naturally, that has subsequently been physically altered, and from which ground water flows under natural pressures or is artificially withdrawn,” suggest two or more distinct and unconnected things. We accordingly reject the Well Drillers’ interpretation that “combined” modifies wells or developed springs; combined modifies appropriation, which speaks specifically to the quantity of water which may be withdrawn for a beneficial use. ¶24 Based upon the plain language of the statute, it is evident that the intent of the Legislature in enacting subsection (3)(a)(iii) was to ensure that, when appropriating from the same source, only a de minimus quantity of water, determined by the Legislature to be 10 acre-feet per year, could be lawfully appropriated without going through the rigors of the permitting process. An exception to the exemption for quantities exceeding 10 acre feet per year, regardless of flow rate and number of wells or developed springs utilized for the appropriation, protects other water rights utilizing the same water source. This is consistent with the purpose of the Act as a remedial statute designed to strictly adhere to the prior appropriation doctrine and to provide for the “administration, control, and regulation of water rights . . . and confirm all existing water rights . . . .” Section 85-2-101(2)(4), MCA. We have explained that “the Water Use Act was designed to protect senior water rights holders from encroachment by junior appropriators adversely 15 affecting those senior rights.” Mont. Power Co. v. Carey, 211 Mont. 91, 98, 685 P.2d 336, 340 (1984). This fundamental purpose is reflected throughout the Act and many of the subsections of the Act begin with a policy declaration stating that the protection of senior water rights and the prior appropriation doctrine is the Act’s core purpose. See, e.g., § 85-1-101(4), MCA (the Act’s purpose is to “protect existing uses”); § 85-2-101(4), MCA (it is “a purpose of this chapter to recognize and confirm all existing rights”); § 85-2-101(4), MCA (the purpose of permitting is to “provide enforceable legal protection for existing rights”). Accordingly, based upon the plain language of the statute and the stated purpose of the Act, we conclude that “combined appropriation” refers to the total amount or maximum quantity of water that may be appropriated without a permit and not to the manner in which wells or developed springs may be physically connected. ¶25 Although we have interpreted the plain language of § 85-2-306(3)(a)(iii), MCA, what remains to be addressed is the validity of the 1993 rule in light of the statute’s plain meaning. When adopting a rule, the agency must comply with the requisites for rule validity codified in § 2-4-305(6), MCA, of the Montana Administrative Procedure Act. This section provides that “[w]henever by . . . statute a state agency has authority to adopt rules[,] . . . a rule is not valid or effective unless it is: (a) consistent and not in conflict with the statute; and (b) reasonably necessary to effectuate the purpose of the statute.” Section 2-4-305(6), MCA. In interpreting the statute, we have stated: The courts have uniformly held that administrative regulations are “out of harmony” with legislative guidelines if they (1) “engraft additional and contradictory requirements on the statute” (citations omitted); or (2) if they 16 engraft additional, noncontradictory requirements on the statute which were not envisioned by the legislature. (citations omitted in original.) Board of Barbers v. Big Sky College, 192 Mont. 159, 161, 626 P.2d 1269, 1270 (1981) (citation omitted). We have also held that “[r]ules adopted by administrative agencies which conflict with statutory requirements or exceed authority provided by statute, are invalid.” Haney v. Mahoney, 2001 MT 201, ¶ 6, 306 Mont. 288, 32 P.3d 1254 (internal quotations omitted). See also State ex rel. Swart v. Casne, 172 Mont. 302, 564 P.2d 983 (1977) (holding agency rules void because a statute cannot be changed by administrative regulations), overruled on other grounds, Trs. of Ind. Univ. v. Buxbaum, 2003 MT 97, 315 Mont. 210, 69 P.3d 663. With these principles in mind, we must decide whether the 1993 rule defining the term “combined appropriation” is inconsistent with § 85-2-306(3)(a)(iii), MCA. ¶26 The 1993 rule defined “combined appropriation” as requiring that “the ground water developments” be “physically manifold into the same system.”2 First, there is no language anywhere in the Act which suggests that wells or developed springs must be physically manifold or connected in order to be deemed a “combined appropriation.” We therefore conclude, without any difficulty, that the 1993 rule engrafted an additional requirement on the statute and must be deemed invalid if: (1) it is contradictory or inconsistent with the statute, or (2) adds a requirement not envisioned by the Legislature. 2 No public hearing on this rule change adding a physical connectivity requirement was held and no public comments were received. The DNRC similarly did not provide a statement as to why the change from the 1987 rule was necessary as the DNRC was required to do pursuant to § 2-4-305, MCA. The DNRC responded to an inquiry by the Administrative Rules Committee that the 1987 definition of “combined appropriation” was “too ambiguous and therefore difficult to administer.” 17 ¶27 As the District Court correctly observed, the 1993 rule allows an unlimited quantity of water to be appropriated from the same source as long as the ground water developments are not physically manifold or connected. The 1993 rule, therefore, unquestionably expands the exemption by limiting the number of appropriations which must be excepted, rendering meaningless the underlying limit on volume or quantity of 10 acre-feet per year from the same source. That portion of § 85-2-306(3)(a)(iii), MCA, allowing for an exemption—a well or developed spring appropriating no more than 35 gallons per minute and 10 acre-feet per year—has no qualifying language relating to the same source. However, the exception to the exemption does; that is, regardless of flow rate and the number of wells or developed springs no combined quantity of water may exceed 10 acre-feet when it is from the same source. The 1993 rule directly contradicts this plain language by adding a connectivity requirement to the wells or developed springs, effectively swallowing up the underlying exception that the Legislature created. ¶28 We conclude that the 1993 rule was inconsistent with the plain language of § 85-2-306(3)(a)(iii), MCA, and that it engrafted an additional requirement on the exempt well statute that wells or developed springs be “physically manifold into the same system.” By narrowing the exception to only those wells or developed springs physically connected, the 1993 rule expanded the narrow exemption to the permitting process provided by § 85-2-306(3)(a)(iii), MCA, and was inconsistent with the stated statutory purpose of the Act. ¶29 As a final matter, we think, in light of the several statutory amendments to § 85-2-306, MCA, it important to address a remaining argument of Well Drillers in 18 relation to the validity of the 1993 rule. Well Drillers argue that the Legislature abrogated the former meaning of “combined appropriation” when it imposed a volume limitation and lowered the flow rate in 1991 and added subsection (3)(a)(iv) to § 85-2-306, MCA, in 2013. Citing Grenz v. Mont. Dept. of Natural Res. & Conservation, 2011 MT 17, 359 Mont. 154, 248 P.3d 785, Well Drillers maintain that the 1993 rule represents a long-standing rule that has withstood numerous amendments and that this Court presumes the Legislature acts with knowledge of the prior construction of related rules and to have adopted that construction when amending statutes. ¶30 Preliminarily, we note that throughout the amendments, the text of the relevant clause of the statute has remained as originally enacted in 1987 continuing to its final amendment in 2013. Further, Well Drillers acknowledge that the Legislature could not have intended the term “combined appropriation” to denote physical connectivity when it added the term into the 1987 statute given the legislative debate surrounding incorporation of the term into the statute, that the statute did not contain a volume limitation, and the DNRC’s immediate promulgation of the 1987 rule expressly stating that physical connectivity was not required. As the relevant text of the statute has remained unchanged, our conclusion that its plain language does not require physical connectivity applies for each statutory amendment. This conclusion remains valid even in light of the additional text and subsections to the statute made in 1993 and 2013. Nonetheless, Well Drillers argue legislative intent and Grenz support their interpretation that the statutory amendments incorporated the 1993 rule. 19 ¶31 The Well Drillers’ position ignores a common canon of statutory construction that “[w]ords and provisions used in the original act or section are presumed to be used in the same sense in the amendment.” 1A Norman J. Singer, Sutherland’s Statutes and Statutory Construction, § 22:33 (6th ed. 2002). And, in accordance therewith, courts “construe words in a new statute that are identical to words in a prior statute as having the same meaning.” Bakersfield Energy Partners, LP v. Comm’r, 568 F.3d 767, 775 (9th Cir. 2009). Pursuant to § 1-2-203, MCA, where “a part of a statute is amended, it is not to be considered as having been repealed and reenacted in the amended form, but the portions which are not altered are to be considered as having been the law from the time when they were enacted.” Consistent with these principles, where a section of a statute has been amended but certain words have been left unchanged, we must accord the untouched provisions the meaning they had when they were originally incorporated into the statute. See State ex rel. Montgomery Ward & Co. v. District Court, 115 Mont. 521, 527, 146 P.2d 1012, 1014 (1944) (explaining that where the Legislature amended the statute but left in place the word “returned,” it cannot be explained by new matter added years later, but rather must be interpreted as originally understood); Northern Pacific Railway v. Dunham, 108 Mont. 338, 346, 90 P.2d 506, 510 (1939), (explaining that “[b]y retaining the [particular] clause [in a statute] without any change, we must assume that the legislature intended that the words should be given the same meaning as they had at the time of the passage of [the original act].” 20 ¶32 The parties do not dispute that when the term “combined appropriation” was first utilized by the Legislature it did not have the meaning the Well Drillers attach to it. Section 85-2-306(1), MCA (1987), provided: a combined appropriation from the same source from two or more wells or developed springs exceeding [100 gpm] requires a permit. The 1991 amended statute, § 85-2-306(3)(a)(iii), MCA (1991), provided: a combined appropriation from the same source by two or more wells or developed springs exceeding [10 acre-feet] requires a permit. Finally, the 2013 amended statute, § 85-2-306(3)(a)(iii), MCA (2013), provides: (iii) when the appropriation is outside a stream depletion zone, is 35 gallons a minute or less, and does not exceed 10 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding 10 acre-feet, regardless of the flow rate, requires a permit; or (iv) when the appropriation is within a stream depletion zone, is 20 gallons a minute or less, and does not exceed 2 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding this limitation requires a permit. ¶33 The Legislature retains power to abrogate an existing statutory interpretation. See Langemo v. Mont. Rail Link, Inc., 2001 MT 273, ¶ 24, 307 Mont. 293, 38 P.3d 782. However, there is no indication that the Legislature intended to do so here. By leaving the term “combined appropriation” untouched, its original meaning was preserved. If the Legislature wished to abrogate that meaning, “it would have employed definite language in doing so, rather than to adopt the circuitous method suggested [by the Well Drillers] here.” Dunham, 108 Mont. at 346, 90 P.2d at 510. The term “combined appropriation” utilized in the original 1987 statute has remained intact and unchanged in the subsequent statutory amendments of 1991 and 2013. When the 1987 Legislature incorporated the 21 disputed language into the statute, the 1991 Legislature adopted the former Legislature’s original meaning by leaving the language in place. ¶34 Finally, Grenz does not support the Well Drillers’ argument. In Grenz, we adopted the agency’s interpretation of a statute and, in doing so, followed a well-known canon of statutory construction that provides that when the Legislature amends a statute we generally presume that it acts with knowledge of existing administrative rules interpreting the statute and adopts the agency’s interpretation. Grenz, ¶ 41. Here, however, when the Legislature substantively amended § 85-2-306, MCA, in 1991, the then applicable administrative rule was the 1987 rule, which did not require physical connection between groundwater developments. Thus, following the above-referenced canon of construction used in Grenz—that the Legislature adopts an existing agency interpretation when it amends a statute—counsels against the Well Drillers’ interpretation of the statute, not in favor of it. ¶35 We reject Well Drillers’ argument that amendments to § 85-2-306, MCA, incorporated the 1993 rule. Such an argument is inconsistent with the plain language of the statute, the relevant portion of which has remained unchanged since 1987, and is likewise an incorrect application of § 1-2-203, MCA, and Grenz. The 1993 rule is invalid because it conflicts with the plain language of § 85-2-306, MCA, and because the Legislature, as is its prerogative, has not abrogated the original meaning it placed on “combined appropriation” since the legislature first incorporated the term in 1987. 22 ¶36 2. Whether the District Court erred by reinstating Admin. R. M. 36.12.101(7) (1987). ¶37 The Well Drillers argue that the District Court erred by reinstating the 1987 rule after invaliding the 1993 rule, reasoning that the court lacked authority to reinstate the former rule. The Coalition counters that the proper course for the District Court was to reinstate the 1987 rule after invaliding the 1993 rule, reasoning that when an administrative rule is invalidated the effect should be, by default, to reinstate the former rule. ¶38 The issue of whether a former agency rule is reinstated by the invalidation of the current rule is a question of first impression for this Court. Federal law provides guidance on the subject. Under federal case law, the “effect of invalidating an agency rule is to reinstate the rule previously in force.” Paulsen v. Daniels, 413 F.3d 999, 1008 (9th Cir. 2005). Although the federal Administrative Procedure Act does not expressly state that the prior rule is reinstated, the “common rationale” for doing so is “that the current rule being invalid from its inception, the prior regulation is reinstated until validly rescinded or replaced.” Cumberland Med. Ctr. v. Sec’y of Health & Human Services, 781 F.2d 536, 538 (6th Cir. 1986). ¶39 We find this reasoning persuasive. Like the federal Administrative Procedure Act, the Montana Administrative Procedure Act is silent in regard to the effect of the invalidation of the current rule on the former administrative rule. It serves to reason, however, that when a court invalidates the current rule, the effect is to return to the previous status of the law, which necessarily means in most instances that the former rule is reinstated. 23 ¶40 We follow this same reasoning in the context of invalidated statutes. We have explained that an invalidated statute “is in reality no law, but is wholly void, and in legal contemplation is as inoperative as if it has never been passed.” State ex rel. Woodahl v. District Court, 162 Mont. 283, 290, 511 P.2d 318, 322 (1973). The “natural effect of this rule is that the invalidity of a statute leaves the law as it stood prior to the enactment of the invalid statute.” Woodahl, 162 Mont. at 291, 511 P.2d at 322. Thus, under Montana law, when an amended statute is invalidated the statute is left in the same position that it was in before the amendment was introduced. In re O’Sullivan, 117 Mont. 295, 304, 158 P.2d 306, 310 (1945). ¶41 We see nothing in the Montana Administrative Procedure Act that would argue against adopting the federal approach and the approach we utilize in the context of invalidated statutes. Therefore, we now hold that where, as here, a court invalidates an administrative rule that has been invalid since its inception, the default remedy is to reinstate the former administrative rule. Accordingly, the District Court did not err by reinstating the 1987 rule. ¶42 3. Whether the District Court erred by directing the DNRC to institute rulemaking consistent with the court’s order. ¶43 The Well Drillers take issue with the portion of the District Court’s order requiring that the DNRC conduct further rule making “consistent” with the court’s order. Well Drillers argue that the court lacked authority to order that such rulemaking be “consistent” with its order because, in doing so, the court was directing the outcome of the rulemaking process. 24 ¶44 We disagree with the Well Drillers that the District Court erred by requiring that any further rulemaking be done consistent with the court’s order. The District Court is vested with judicial authority as set forth in Article VII, Section I of the Montana Constitution. That authority includes not only the power “to say what the law is,” Marbury v. Madison, 5 U.S. 137, 177 (1803), but also the power “to make binding orders or judgments.” State ex rel. Bennett v. Bonner, 123 Mont. 414, 425, 214 P.2d 747, 753 (1950). The court must have authority to “pronounce a judgment and carry it into effect between persons and parties who bring a case before it for decision.” Shea v. N.-Butte Mining Co., 55 Mont. 522, 537, 179 P. 499, 504 (1919). ¶45 Although, the District Court did not err by requiring that a rule promulgated by the DNRC must be consistent with its order, it is the responsibility of the administrative agency to “adopt rules necessary to implement and carry out the purposes of this chapter.” Section 85-2-113(2), MCA. Such authority includes whether, in the judgment of the DNRC, a rule other than the reinstated 1987 rule should be implemented. Accordingly, we reverse and remand to the District Court for the limited purpose of removing its mandate to the DNRC to initiate rulemaking. It is up to the DNRC to determine whether initiating rulemaking to change the reinstated 1987 rule is appropriate. ¶46 For the reasons stated, the judgment of the District Court is affirmed, with the exception of the requirement that the DNRC initiate rulemaking. The 1987 rule is reinstated until further action implementing a new rule is initiated by the DNRC. /S/ LAURIE McKINNON 25 We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA Justice Jim Rice, dissenting. ¶47 Every judicial officer who has considered the subject statute has recognized the ambiguity inherent in the Legislature’s employment of the term “combined appropriation” in this context. Addressing the ambiguity, the District Court considered legislative history, purposes of the iterations of the statute, water law commentaries, and the administrative record. The DNRC Hearing Examiner did the same and upheld the challenged administrative rule, concluding that “the most common definition [] of ‘combined’ is physically joined together. Therefore, the ‘physically manifold’ requirement under the administrative rule is not inconsistent or in conflict with the plain language of the statute, and certainly not plainly and palpably inconsistent with the statutory language.” These analyses turned to interpretational guides because “[w]hen the legislative intent cannot be readily derived from the plain language, we review the legislative history and abide by the intentions reflected therein.” Montanans for Justice v. State, 2006 MT 277, ¶ 60, 334 Mont. 237, 146 P.3d 759 (emphasis added). Everyone who has considered the statute—except the Court—has agreed: the subject statute is not clear and legislative intent cannot be “readily derived.” However, the Court sweeps away the messy business of considering and analyzing the legislative record and history, 26 preferring instead to employ the ipse dixit canon of statutory construction: the statute is absolutely clear on its face because we say so. ¶48 Perhaps the reason for this is found in ¶ 13 of the Opinion. While this case is about the validity of an administrative rule, the Court is alarmed about the policy ramifications of the rule: that exempt appropriations “have grown steadily” and are “consuming significant amounts of water”; that it is anticipated that “appropriations will continue to grow rapidly”; that exempt appropriations will be added in “already over-appropriated basins”; that there are concerns that the “cumulative effects of these exempt appropriations are having a significant impact” on groundwater and surface flow levels; and that these appropriations “may be harming senior water users’ existing rights.” While it is always tempting to act decisively in response to a perceived policy problem, and to legislate a solution, legislating is neither our duty nor our prerogative. By deciding to solve the problem by simply declaring that the statute is unambiguous, and thus avoid the trouble of considering the troublesome history, the Court is holding that the DNRC inexplicably misinterpreted and misapplied a clear statute for the past 23 years, despite the fact the agency undertook rulemaking in 1993 for the very purpose of more accurately applying the statute and removing ambiguity in the former rule. Nobody has argued or even hinted at such a proposition, because nobody believes it. ¶49 The Well Drillers argue that “combined appropriation” plainly denotes a “physical connection” between two or more groundwater developments. The Coalition counters that “combined appropriation” clearly refers to groundwater developments that are used together for a “single beneficial use.” The statute simply does not explain what level of 27 commonality between two or more groundwater developments is required before water withdrawn from the developments can fairly be said to be in “a state of unity”—as the word “combined” is defined in The American Heritage Dictionary of the English Language 368 (Joseph P. Pickett ed., 5th ed. 2011)—for purposes of the statute. The term “combined appropriation” could reasonably be understood, as the Well Drillers argue, to signify physical unity. Likewise, the term could reasonably be understood, as the Coalition argues, to signify only unity of use. ¶50 Accepting the reality that the statute is ambiguous, I would decide the case by employing the applicable canons of statutory construction. In the context of an ambiguous statute that has been subject to a longstanding interpretation by administrative rule, we apply the canon of deference to the agency’s interpretation. Mont. Trout Unlimited v. Mont. Dep’t of Natural Res. & Conservation, 2006 MT 72, ¶ 37, 331 Mont. 483, 133 P.3d 224. “[I]t is a well-accepted rule of statutory construction that the long and continued contemporaneous and practical interpretation of a statute by the executive officers charged with its administration and enforcement constitutes an invaluable aid in determining the meaning of a doubtful statute.” Mont. Power Co. v. Mont. PSC, 2001 MT 102, ¶ 24, 305 Mont. 260, 26 P.3d 91 (internal quotations omitted) (citing Bartels v. Miles City, 145 Mont. 116, 122, 399 P.2d 768, 771 (1965)); accord Molnar v. Fox, 2013 MT 132, ¶ 27, 370 Mont. 238, 301 P.3d 824. When the interpretation has “stood unchallenged for a considerable length of time,” it will be regarded as a “great importance in arriving at the proper construction of a statute.” Mont. Power Co., ¶ 24 (emphasis added) (quoting Bartels, 145 Mont. at 122, 399 P.2d at 771); accord Mont. 28 Trout Unlimited, ¶ 37. Deference to the agency’s interpretation is a form of estoppel, borne from the reliance by the “public and those having an interest in the interpretation of the law.” Mont. Power Co., ¶ 24 (quoting Bartels, 145 Mont. at 122, 399 P.2d at 771); accord D’Ewart v. Niebauer, 228 Mont. 335, 340, 742 P.2d 1015, 1018 (1987). ¶51 This canon of deference is to apply “where the particular meaning of a statute has been placed in doubt, and where a particular meaning has been ascribed to a statute by an agency through a long and continued course of consistent interpretation, resulting in an identifiable reliance.” Mont. Power Co., ¶ 25 (emphasis added). The canon of deference to an agency’s interpretation, rising to one of “great importance” when the interpretation is longstanding, yields only upon “compelling indications” that the construction is wrong. Mont. Power Co., ¶¶ 23–25. ¶52 Whether an agency’s interpretation of a statute is “longstanding” is not subject to a bright line test, but this case does not present a close call. The 1993 administrative rule has been the law for 23 years now, which is more than sufficient time to be considered “a long and continued course of consistent interpretation.” Mont. Power Co., ¶ 25. For the same reason that a one-year-old administrative rule is clearly not “longstanding,” Mont. Trout Unlimited, ¶ 38, a two-decade-old administrative rule clearly is. Thus, unless there are “compelling indications” that DNRC’s interpretation of the subject statute is wrong, the Court should defer to DNRC’s interpretation of “combined appropriation.” Mont. Power Co., ¶¶ 23, 25. ¶53 The genesis of this dispute is the agency’s 1993 rulemaking, which, as explained by the Hearing Examiner, was undertaken to more concisely define the statutory term 29 “combined appropriation,” and to remove ambiguity from the previous rule that rendered the statute “difficult to administer.” In the many years that followed, review of the 1993 rule was undertaken by legislative committees, but no objection was made and no action was taken to alter the rule. This inaction corresponds to the purpose of the canon of construction mentioned above: the Legislature can act at any time it believes a rule is improper. Here, minor amendments were made to the statute over the years, but those did not involve the use of the term “combined appropriation.” However, that changed in 2013, when the Legislature revisited the term. ¶54 Senate Bill 19, discussed below, and Senate Bill 346 were passed during the 2013 Legislative Session. Senate Bill 346 was entitled “An Act Generally Revising Water Laws Related to Ground Water Appropriations Exempt From Permitting.” 2013 Mont. Laws 1796. Prior to the passage of Senate Bill 346, the relevant portion of the statute provided: (3)(a)(i) Except as provided in subsection (3)(a)(ii), outside the boundaries of a controlled ground water area, a permit is not required before appropriating ground water by means of a well or developed spring: (A) with a maximum appropriation of 35 gallons a minute or less, not to exceed 10 acre-feet a year, except that a combined appropriation from the same source from two or more wells or developed springs exceeding this limitation requires a permit; Section 85-2-306(3)(a)(i)(A), MCA (2011). Senate Bill 346 made the following revisions to § 85-2-306, MCA, as indicated in the session law:1 1 Section 5-11-205(2), MCA, provides that new parts of existing statutes are to be printed in a session law as italics, and deleted provisions are to be shown as stricken. 30 (3)(a)(i) Except as provided in subsection (3)(a)(ii), outside Outside the boundaries of a controlled ground water area, a permit is not required before appropriating ground water by means of a well or developed spring: (A) with a maximum appropriation of 35 gallons a minute or less, not to exceed 10 acre feet a year, except that a combined appropriation from the same source from two or more wells or developed springs exceeding this limitation requires a permit; or (B)(i) when the appropriation is made by a local governmental fire agency organized under Title 7, chapter 33, and the appropriation is used only for emergency fire protection, which may include enclosed storage.; (ii) when a maximum appropriation of 350 gallons a minute or less is used in nonconsumptive geothermal heating or cooling exchange applications, all of the water extracted is returned without delay to the same source aquifer, and the distance between the extraction well and both the nearest existing well and the hydraulically connected surface waters is more than twice the distance between the extraction well and the injection well; (iii) when the appropriation is outside a stream depletion zone, is 35 gallons a minute or less, and does not exceed 10 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding 10 acre-feet, regardless of the flow rate, requires a permit; or (iv) when the appropriation is within a stream depletion zone, is 20 gallons a minute or less, and does not exceed 2 acre-feet a year, except that a combined appropriation from the same source by two or more wells or developed springs exceeding this limitation requires a permit. (ii) Outside the boundaries of a controlled ground water area, a permit it not required before appropriating ground water by means of a well or developed spring with a maximum appropriation of 350 gallons a minute or less for use in nonconsumptive geothermal heating or cooling exchange applications if all of the water extracted is returned without delay to the same source aquifer and if the distance between the extraction well and both the nearest existing well and the hydraulically connected surface waters is more than twice the distance between the extraction well and the injection well. - 31 2013 Mont. Laws at 1799–800. ¶55 As part of its expressed intention to generally revise ground water appropriation laws, the 2013 Legislature expanded the use and purpose of the term, “combined appropriation.” Whereas the term was used only once in pre-2013 law, the term was further employed in entirely new subsections that incorporated the concept of “stream depletion zones.” As argued by the Well Drillers, “with the creation of § 85-2- 306(3)(a)(iv), MCA, in 2013 and the inclusion of ‘combined appropriation’ language, it can very well be presumed that pursuant to Grenz [v. Mont. Dep’t of Natural Res. & Conservation, 2011 MT 17, ¶ 41, 359 Mont. 154, 248 P.3d 785], the legislative intent included the use of the 1993 Rule’s definition of the exempt well statute.” This is correct: when the 2013 Legislature generally revised the statute, the applicable administrative rule was the agency’s longstanding 1993 rule, which did not require physical connection between groundwater developments. By then, the 1993 rule had been in place for 20 years, and in accordance with the applicable canon of construction, “a particular meaning [had] been ascribed to [the] statute by an agency through a long and continued course of consistent interpretation, resulting in an identifiable reliance.” Mont. Power Co., ¶ 25. Thus, the 2013 Legislature, proceeding upon that “identifiable reliance,” affirmatively employed the longstanding, 20-year agency interpretation of the statute. ¶56 The Court cites § 1-2-203, MCA, which provides that when a statute is amended, “the portions which are not altered are to be considered as having been the law from the time they were enacted, and the new provisions are to be considered as having been 32 enacted at the time of the amendment.” The Court concludes that the 2013 general revision to the statute is an amendment that contains no “new” provisions. However, I would conclude Senate Bill 346’s title, new language, and new structure demonstrate that, more than a mere amendment, a general revision was intended and enacted that incorporated the longstanding agency interpretation. ¶57 Canons of construction can be contradictory, and the particular canon that governs the interpretation of a given statute depends on the context. See, e.g., State v. Liefert, 2002 MT 48, ¶ 26, 309 Mont. 19, 43 P.3d 329 (ambiguous criminal statutes to be interpreted in favor of defendant); Eisenmenger v. Ethicon, Inc., 264 Mont. 393, 400, 871 P.2d 1313, 1317 (1994) (ambiguous statute of limitations to be interpreted to allow the longer period in which to prosecute the action); Mont. Bankers Ass’n v. Mont. Dep’t of Revenue, 177 Mont. 112, 117, 580 P.2d 909, 912 (1978) (ambiguous tax statutes granting exemptions and deductions strictly construed against taxpayer); see also Chickasaw Nation v. United States, 534 U.S. 84, 93–94, 122 S. Ct. 528, 535 (2001) (ambiguous statutes construed in favor of Indian nations). Here, the longstanding agency interpretation, followed by the confirming legislative history, shows that the canon of deference should be applied. ¶58 Although not necessary to the proper conclusion, the passage of Senate Bill 19 by the 2013 Legislature adds further impetus to accurately determining legislative intent. I find it significant that a bill was passed by both houses contemporaneously with the passage of Senate Bill 346, further defining the term at issue. The Court states the 2013 Legislature would have no reason to pass Senate Bill 19 if it had intended to adopt the 33 1993 rule within Senate Bill 346, because it would be redundant. However, the Legislature often uses multiple bills in a single session to deal with any given issue, and given that this litigation was pending, the 2013 Legislature’s double-knotting of the issue makes perfect sense. ¶59 For the Court to insist that the 1991 Legislature’s meaning of the term “combined appropriation” must be reinstated, regardless what occurred in the intervening years, restricts the power of the Legislature to subsequently amend the term, and grants a monopoly to the 1991 Legislature on this issue. This violates not only the canons of construction, but separation of powers. Further, legislative bodies cannot bind future legislative bodies in this way. Ohio Life Ins. & Trust Co. v. Debolt, 57 U.S. (16 How.) 416, 431, 14 L. Ed. 997, 1003 (1854) (“[N]o one legislature can, by its own act, disarm their successors of any of the powers or rights of sovereignty confided by the people to the legislative body, unless they are authorized to do so by the constitution under which they are elected.”); Newton v. Comm’rs, 100 U.S. 548, 559, 25 L. Ed. 710, 711 (1879). ¶60 It is really not difficult to determine what the Legislature intends here, even if it is difficult for the Court to accept. The DNRC’s two-decade-old administrative rule is a longstanding interpretation of a statute that is of “great importance” and should be given deference absent “compelling indications” that the interpretation is wrong. Because the 2013 Legislature clearly used the 1993 rule’s definition of “combined appropriation” when it revised the statute in 2013, there are no compelling indications the 1993 rule is wrong. Indeed, the 1993 rule has been affirmed by the Legislature. Under that rule, many permits have been issued over the past 23 years. Given the ambiguity in the statute 34 and the DNRC’s longstanding interpretation, this Court generally defers to the agency. I would do so, and reverse. /S/ JIM RICE

September 13, 2016

69777482-46c8-40f5-adbf-b634339f26e7

Zindell v. State

2016 MT 222N

DA 15-0185

Montana

Montana Supreme Court

DA 15-0185 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 222N GREGG ALLEN ZINDELL, Plaintiff and Appellant, v. STATE OF MONTANA, Defendant and Appellee. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV-14-446 Honorable Kenneth R. Neill, Presiding Judge COUNSEL OF RECORD: For Appellant: Gregg Allen Zindell (Self-Represented), Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy K Plubell, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Great Falls, Montana Submitted on Briefs: June 22, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 15-0185 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 In January 2012, the State filed an Information charging Zindell with Sexual Intercourse without Consent. During the pre-trial process, the State offered Zindell three separate plea agreements: the first early on when he was represented by a public defender and the next two while he was represented by private lawyer Carl Jensen. Zindell rejected all three offers, steadfastly maintaining his innocence. Jensen met with Zindell regarding each offer that was made, discussing both the terms of the offers and the likely sentence he would receive if convicted. In 2013, a jury convicted Zindell of Sexual Intercourse without Consent and he was sentenced to thirty years in the Montana State Prison, with ten years suspended. We affirm. ¶3 In June 2014, Zindell filed a pro se Petition for Postconviction Relief (PCR) with the Eighth Judicial District Court, Cascade County, claiming he received ineffective assistance of counsel (IAC) from Jensen. Zindell claimed that counsel failed to educate him on the plea agreements offered by the State. Specifically, Zindell asserted that counsel did not spend the time required to fully explain the terms of the plea offers and the sentencing consequences of refusing the offers. Zindell claimed he would have 3 accepted the State’s plea offer had he received this information. After receipt of Jensen’s court-ordered affidavit, the District Court held a hearing on the PCR in November 2014. In January 2015, the District Court denied and dismissed Zindell’s petition, finding that the record and hearing testimony supported Jensen’s claim that he adequately informed Zindell of every plea agreement offered by the State and the likely sentence he faced if convicted at trial. The court further found that, given Jensen’s testimony that Zindell maintained his innocence during the plea bargaining process, as evidenced by Zindell’s claims of innocence throughout his trial, conviction, and sentencing, it was unlikely that Zindell would have accepted any plea agreement offered by the State. ¶4 In February 2016, Zindell filed a pro se brief on appeal to this Court. He argues that the District Court erred when it denied his petition and he also raises new IAC claims. The State responds that Zindell’s PCR petition was properly dismissed and denied because counsel adequately informed Zindell of the terms and consequences of the plea agreements offered by the State. Moreover, the State asserts that Zindell fails to prove that counsel’s advice had any prejudicial effect on him. The State also argues that this Court should not consider Zindell’s new claims on appeal. ¶5 We review a district court’s denial of a PCR petition to determine if the court’s findings of fact are clearly erroneous and if its conclusions of law are correct. McGarvey v. State, 2014 MT 189, ¶ 14, 375 Mont. 495, 329 P.3d 576. We review IAC claims de novo. McGarvey, ¶ 14. A petitioner bears a heavy burden when seeking to reverse a district court order denying PCR based on IAC. McGarvey, ¶ 14. ¶6 Section 46-21-104, MCA, provides, in relevant part: 4 (1) The petition for postconviction relief must: . . . (c) identify all facts supporting the grounds for relief set forth in the petition and have attached affidavits, records, or other evidence establishing the existence of those facts. “A postconviction claim that is not raised in an original or amended original petition cannot be raised for the first time on appeal.” Sanders v. State, 2004 MT 374, ¶ 14, 325 Mont. 59, 103 P.3d 1053; see § 46-21-105(1)(a), MCA. Thus, we decline to address those additional IAC claims Zindell raises for the first time on appeal. ¶7 To analyze a criminal defendant’s IAC claims, we apply the two-part test set forth in Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052 (1984). McGarvey, ¶ 24. Under Strickland, “the defendant must demonstrate (1) that counsel’s performance was deficient, and (2) that counsel’s deficient performance prejudiced the defendant.” McGarvey, ¶ 24. Under the first prong of Strickland, the defendant must overcome the strong presumption that counsel’s conduct falls within professional norms. McGarvey, ¶ 25. We will examine counsel’s acts or omissions based on an objective standard of reasonableness. McGarvey, ¶ 25. To establish prejudice under Strickland’s second prong, “the defendant must show that, but for counsel’s errors, a reasonable probability exists that the result of the proceeding would have been different.” State v. Miner, 2012 MT 20, ¶ 12, 364 Mont. 1, 271 P.3d 56. ¶8 Here, Zindell fails to establish that Jensen’s conduct fell outside reasonable professional conduct. During plea negotiations, Jensen testified, and Zindell does not dispute, that he informed Zindell of each offer made to him by the State and discussed 5 each offer with him in his office. Jensen also advised Zindell of the potential sentencing consequences of not accepting the pleas. Specifically, Jensen advised Zindell that, based on past experience, a likely sentence for a Sexual Intercourse without Consent conviction was approximately thirty years with fifteen years suspended. Furthermore, based on Jensen’s testimony and Zindell’s own claims of innocence throughout the trial and sentencing proceedings, it is unlikely that Zindell would have accepted any plea agreement offered by the State. Indeed, when Zindell was offered a six-year sentence with four years suspended, an offer Jensen advised Zindell to consider, Zindell refused the offer because he believed that he would be acquitted at trial. Thus, Zindell fails to prove that Jensen’s actions or omissions during plea negotiations would have produced a different result than the conviction and sentence he received. ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s interpretation and application of law were correct and its findings of fact are not clearly erroneous. ¶10 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE

September 6, 2016

d90a3f15-9081-494e-826b-aa1a98ea90b1

Matter of A.D. and K.D. YINC

N/A

DA 16-0089

Montana

Montana Supreme Court

DA 16-0089 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 217N IN THE MATTER OF: A.D. and K.D., Youths in Need of Care. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADN 14-064 and ADN 14-065 Honorable Gregory G. Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Tracy Labin Rhodes, Attorney at Law, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Valerie W. Winfield, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: August 10, 2016 Decided: August 30, 2016 Filed: __________________________________________ Clerk 08/30/2016 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 J.L.B. (Mother) and R.D. (Father) are the biological parents of minor children K.D. and A.D., currently three and four years old respectively. In February 2014, the Department of Public Health and Human Services, Child and Family Services Division (Department or DPHHS), petitioned for temporary investigative authority. In March, the Department petitioned for emergency protective services, adjudication of the children as youths in need of care, and temporary legal custody. The petitions were granted, a hearing was scheduled for March 19, 2014, and the children were removed from Mother’s home and placed in foster care. A later placement resulted in the children being placed with their paternal grandfather where they currently safely reside. As Mother reported that she and the children were members of the Turtle Mountain Band of Chippewa Indians, DPHHS gave notice of the petition and the scheduled hearing to the Band in accordance with the Indian Child Welfare Act (ICWA). At the March 19 adjudicatory hearing the children were declared youths in need of care. In April 2014, the District Court provided Mother and Father with DPHHS-proposed treatment plans. In April 2015, the Department filed a petition to terminate Mother’s and Father’s parental 3 rights. In early 2016, the District Court granted the Department’s petition. In February 2016, Mother appealed. Father did not and is not a part of this proceeding. ¶3 The District Court’s order terminating Mother’s parental rights concluded that continuation of the parent-child legal relationship between Mother and the children “will result in an ongoing risk of abuse and/or neglect to the Youths,” whereas the applicable standard under ICWA required the court to determine, beyond a reasonable doubt, that continued custody likely will result in serious emotional or physical damage to the children. Mother claimed that the evidence did not support the ICWA standard in this case. Over the State’s opposition, she maintained that the District Court’s failure to apply the ICWA standard warranted reversal of the order of termination. ¶4 On June 28, 2016, we ordered the matter remanded to the District Court, noting that “ICWA is an important and potentially controlling factor in the disposition of Mother’s appeal.” We instructed the District Court to clarify whether ICWA applied to the children in this case, and if so, to apply the heightened standard mandated under ICWA for determining whether termination of Mother’s parental rights is justified by the evidence presented at the termination hearing. The District Court issued its Amended Order on July 19, 2016, concluding that ICWA applied to the case before it and that continuation of a parental relationship with Mother will result in an “ongoing risk of abuse and/or neglect to the Youths” and continued custody by Mother “would likely result in serious emotional or physical damage to the Youths.” We have considered the parties’ arguments in light of the District Court’s Amended Order and we now affirm. 4 ¶5 We review a district court’s decision to terminate parental rights for abuse of discretion. In re K.B., 2013 MT 133, ¶ 18, 370 Mont. 254, 301 P.3d 836. In ICWA cases, we will uphold the district court’s termination of parental rights if a reasonable fact-finder could conclude beyond a reasonable doubt that allowing the parent to continue custody would likely “result in serious emotional or physical damage to the child.” K.B., ¶ 18. A district court abuses its discretion when it acts “arbitrarily, without employment of conscientious judgment or in excess of the bounds of reason, resulting in substantial injustice.” In re M.J., 2013 MT 60, ¶ 17, 369 Mont. 247, 296 P.3d 1197. We review a district court’s factual findings for clear error. In re A.K., 2015 MT 116, ¶ 20, 379 Mont. 41, 347 P.3d 711. We review a district court’s application of law for correctness. K.B., ¶ 18 (internal citations omitted). ¶6 The District Court was presented with evidence that Mother and the children were not enrolled in the Turtle Mountain Band of Chippewa Indians. However, throughout the District Court proceeding, the parties complied with the requirements of ICWA and an ICWA expert testified at the termination hearing. Additionally, the District Court heard substantial evidence of Mother placing her children in danger on multiple occasions by using methamphetamine and alcohol in their presence. Hair testing of the children revealed “very high levels for methamphetamine.” Mother also repeatedly violated her probation terms from previous forgery convictions by allowing Father, who has been convicted of sexual assault and assault of his minor son from another relationship, to stay the night at Mother’s and have unsupervised contact with the children. 5 ¶7 It is undisputed that following removal of the children from Mother’s home in March 2014, Mother engaged in her treatment plan, including chemical dependency treatment, and appeared to be doing well. However, in September 2014, Mother, Father, Mother’s boyfriend, all of whom had been drinking, and the two children went on a picnic during which Father stabbed Mother’s boyfriend in a violent altercation in the presence of the children. Mother was arrested on probation violations and remanded into custody. In December 2014, she pled nolo contendere to criminal possession of dangerous drugs and was sentenced to the Department of Corrections for five years, none suspended. Subsequently, DPHHS petitioned for termination of Mother’s parental rights and the District Court granted the petition. ¶8 In the Amended Order, the District Court made the following relevant findings: 1. Mother had two other children older than A.D. and K.D.; she relinquished parental rights to one of them and had her rights to the other child terminated. 2. Mother traditionally responds well under supervision but reverts to unsafe behaviors when supervision ceases. 3. Mother demonstrates manipulative behaviors by verbalizing learned concepts but failing to act accordingly. 4. A.D. is engaged in therapy as a result of Mother’s behavior and actions. 5. The DPHHS case worker expressed concern regarding Mother’s ability to parent the children based upon Mother’s cyclical history of progress and relapse and her current projected incarceration. 6. The ICWA expert testified that efforts to reunify Mother with the children were unsuccessful and continued custody by Mother would likely result in serious emotional or physical damage to the children. 7. Mother failed to successfully complete her treatment plan and the condition that caused her to fail is unlikely to change in a reasonable period of time. 6 8. Mother has a lengthy history of substance abuse and despite frequent treatment programs, has been unable to overcome her addiction. 9. Mother is currently under a judicially-ordered long term confinement. ¶9 The court concluded in relevant part: 1. The children had been in foster care for twenty-three months. 2. Continuation of the parent-child relationship will result in an ongoing risk of abuse and/or neglect and continued custody would likely result in serious emotional or physical damage to the children. 3. The best interests of the children will be served by termination of Mother’s parental rights. ¶10 While a dispute may remain as to the applicability of ICWA in this case, the record nonetheless illustrates that the proceeding was conducted in accordance with ICWA, and the District Court considered the heightened standard applicable to ICWA cases. Moreover, the evidence demonstrates beyond a reasonable doubt that continued custody by Mother is likely to result in serious emotional or physical damage to the children and supports the court’s other findings and conclusions. K.B., ¶ 18. As the ICWA standard encompasses the lesser standard applicable to non-ICWA cases, the non-ICWA standard has been satisfied as well. We may affirm a district court decision that is correct regardless of the district court’s reasoning in reaching its decision. PacifiCorp v. State, 2011 MT 93, ¶ 54, 360 Mont. 259, 253 P.3d 847. In this case, the District Court’s termination of Mother’s parental rights is supported by the evidence and was not an abuse of discretion. 7 ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. In the opinion of this Court, this case presents questions clearly controlled by settled law. ¶12 We affirm. /S/ MICHAEL E WHEAT We Concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

August 30, 2016

ef62d2a9-b891-4f96-ab88-b71b8418cb55

State v. Velasquez

2016 MT 216

DA 14-0770

Montana

Montana Supreme Court

DA 14-0770 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 216 STATE OF MONTANA, Plaintiff and Appellee, v. HILARIO MARTIN VELASQUEZ, Defendant and Appellant. APPEAL FROM: District Court of the Fifteenth Judicial District, In and For the County of Roosevelt, Cause No. DC 13-37 Honorable David Cybulski, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Koan Mercer, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Pamela P. Collins, Assistant Attorney General, Helena, Montana Ralph J. Patch, Roosevelt County Attorney, Jordan W. Knudsen, Deputy County Attorney, Wolf Point, Montana Submitted on Briefs: July 27, 2016 Decided: August 30, 2016 Filed: __________________________________________ Clerk 08/30/2016 Case Number: DA 14-0770 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Hilario Martin Velasquez was arrested for possession of drugs and drug paraphernalia in September 2013. He was jailed in Roosevelt County for over ten months while he awaited testing results from the State Crime Lab. Finally, at the end of July 2014, a Roosevelt County jury convicted Velasquez of both charges. The trial court rejected Velasquez’s argument that he was denied a speedy trial. We reverse and remand for dismissal of the charges. PROCEDURAL AND FACTUAL BACKGROUND ¶2 Velasquez was riding in the back seat of a car that was stopped on September 25, 2013, when a law enforcement officer suspected the driver of being under the influence of alcohol or drugs. The arresting officer found crystals in a cigarette pack located on the dashboard between the driver and the front-seat passenger. The crystals field-tested positive for methamphetamine. Velasquez had a methamphetamine pipe in his pocket and admitted to smoking methamphetamine earlier that evening. The driver of the car also was arrested; the front-seat passenger, however, was not. Velasquez was charged with felony possession of a dangerous drug with intent to distribute, in violation of § 45-9-103, MCA, and with misdemeanor criminal possession of drug paraphernalia, in violation of § 45-10-103, MCA. ¶3 The District Court set trial for January 2014. Several weeks before trial, the State moved to continue the trial because the drug testing results were not yet complete and the State Crime Lab estimated nine months of backlog for drug analysis. Three days later, 3 the District Court ordered the continuance. Velasquez objected to the continuance, asserting his speedy trial right. ¶4 Trial was re-set for March 2014. The State moved for continuance on the same basis as before and the District Court granted its request. The court granted the State’s third motion to continue in May 2014. About two weeks before the July 31 trial date, Velasquez moved to dismiss the case for lack of a speedy trial. Velasquez was unable post the $5,000 bail and remained in the Roosevelt County jail until trial. By then, he had been incarcerated for 309 days. ¶5 At the hearing on Velasquez’s motion to dismiss, the court analyzed the alleged speedy trial violation under the factors articulated in State v. Ariegwe, 2007 MT 204, ¶¶ 106-12, 338 Mont. 442, 167 P.3d 815. The court concluded that the entire delay was institutional delay attributable to the State and that Velasquez had timely asserted his speedy trial right. The court determined, however, that although the question of prejudice was “close,” it did not tip the balance in Velasquez’s favor. The court orally denied Velasquez’s motion and the case proceeded to trial. The jury found Velasquez guilty of both charges. STANDARD OF REVIEW ¶6 A speedy trial violation presents a question of constitutional law that we review de novo to determine whether the court correctly interpreted and applied the law. State v. Zimmerman, 2014 MT 173, ¶ 11, 375 Mont. 374, 328 P.3d 1132. We review the court’s underlying factual findings for clear error. Zimmerman, ¶ 11. A finding is clearly erroneous “if it is not supported by substantial evidence, if the court misapprehended the 4 effect of the evidence, or if our review of the record convinces us that the court made a mistake.” State v. Brave, 2016 MT 178, ¶ 6, 384 Mont. 169, ___ P.3d ___. DISCUSSION ¶7 Did the District Court err in denying Velasquez’s motion to dismiss for lack of a speedy trial? ¶8 A criminal defendant has a constitutional right to speedy trial under the Sixth and Fourteenth Amendments to the United States Constitution and Article II, Section 24 of the Montana Constitution. Ariegwe, ¶ 20. When an accused claims that right has been violated, we consider (1) the length of the delay, (2) the reasons for the delay, (3) the accused’s responses to the delay, and (4) prejudice to the accused as a result of the delay. Zimmerman, ¶ 14. We balance these factors to determine whether the right to a speedy trial has been violated. State v. Stops, 2013 MT 131, ¶ 19, 370 Mont. 226, 301 P.3d 811. No single factor is dispositive; the factors are related and must be considered together with any other relevant circumstances. Ariegwe, ¶ 112. “[E]ach factor’s significance will vary from case to case.” Ariegwe, ¶ 105. (1) Length of the Delay ¶9 We determine initially whether the length of the delay is at least 200 days, “which is the trigger date for conducting the four-factor balancing test.” Zimmerman, ¶ 13. In this case, the District Court determined—and the parties agree—that the total length of the delay was 307 days, 107 days beyond the trigger date.1 The longer the delay stretches beyond the 200-day trigger date, “the stronger the presumption is under Factor Four that 1 By our calculation, the length of the delay totaled 309 days, 109 days beyond the trigger date. We use that calculation in this Opinion. 5 the accused has been prejudiced by the delay, and the heavier the state’s burden is under Factor Two to provide valid justifications for the delay.” Zimmerman, ¶ 14 (citing Ariegwe, ¶¶ 49, 61). ¶10 In Zimmerman, we concluded that an 89-day delay beyond the trigger date did not substantially increase the State’s burden or the presumption of prejudice. Zimmerman, ¶ 14; accord State v. Charlie, 2010 MT 195, ¶¶ 50, 59, 357 Mont. 355, 239 P.3d 934 (holding that a 70-day delay beyond the trigger date was not enough to “show a particularly compelling justification for the delay”). But see State v. Billman, 2008 MT 326, ¶ 18, 346 Mont. 118, 194 P.3d 58 (concluding that a 78-day delay beyond the trigger date “presents a considerable amount of delay, and we conclude that the State’s justifications for the delay must be compelling and that it must make a persuasive showing that the delay did not prejudice Billman”). In Ariegwe, a 208-day delay beyond the trigger date required the State to “provide particularly compelling justifications for the delay under Factor Two; and under Factor Four, the State must make a highly persuasive showing that Ariegwe was not prejudiced by the delay, while the quantum of proof that may be expected of Ariegwe under this factor is correspondingly lower.” Ariegwe, ¶ 123; accord State v. Rose, 2009 MT 4, ¶ 46, 348 Mont. 291, 202 P.3d 749 (holding that a 307-day delay beyond the trigger date “substantially” increased the State’s burden under Factor Two, “the presumption that pretrial delay prejudiced Rose is increased, and the quantum of poof expected of Rose under Factor Four is substantially decreased”). 6 ¶11 The District Court did not address whether the extent of the delay increased the presumption of prejudice or the State’s burden to justify the delay. Relying on Zimmerman, the State argues that the time elapsed days beyond the trigger date “is not particularly long” and therefore the State’s burden and the presumption of prejudice are “relatively low.” Velasquez contends that presumption of prejudice “is intensified” by the delay of more than 100 days beyond the trigger date. ¶12 Based on our case law we conclude that a 109-day delay beyond the trigger date occupies a middle ground between Zimmerman and Ariegwe. In other words, in this case, it increases the State’s burden under Factor Two and Factor Four slightly more than it did in Zimmerman, but less than it did in Ariegwe. Accordingly, the State’s burden to provide justifications for the delay in this case is higher, and the State must make a more persuasive showing that Velasquez was not prejudiced by the delay, “while the quantum of proof that may be expected of [Velasquez] under this factor is correspondingly lower.” Ariegwe, ¶ 123. (2) Reasons for the Delay ¶13 In considering the reasons for the delay, “we must identify each period of the delay, attribute the delay to the responsible party, and then assign weight to each period based on the specific cause and motive for the delay.” State v. Couture, 2010 MT 201, ¶ 71, 357 Mont. 398, 240 P.3d 987. “The prosecution bears the burden of explaining pretrial delays.” Zimmerman, ¶ 15. Delay caused by the State’s bad faith weighs “heavily” against it. Ariegwe, ¶ 67. Delay caused by negligence or lack of diligence occupies a middle ground, but it still “‘falls on the wrong side of the divide between 7 acceptable and unacceptable reasons for delaying a criminal prosecution once it has begun.’” Ariegwe, ¶ 69 (quoting Doggett v. United States, 505 U.S. 647, 657, 112 S. Ct. 2686, 2693 (1992)). “[T]he more delay in bringing the accused to trial that is due to lack of diligence or other ‘unacceptable’ reasons, the more likely the accused’s speedy trial right has been violated.” Ariegwe, ¶ 72. Institutional delays are delays “inherent in the criminal justice system and caused by circumstances largely beyond the control of the prosecutor and the accused, such as overcrowded court dockets.” Couture, ¶ 72. Institutional delay is attributable to the State, “but weighs less heavily against it than delay caused by bad faith, negligence, or lack of diligence.” Couture, ¶ 72. ¶14 The District Court concluded that there “was no basis at all for delay caused by the defense” and that the entire delay was attributable to the State as institutional delay. The court noted, “It’s the fact that the crime lab . . . is slow on getting things.” The court observed also, “[W]hen I look at the way the crime lab is done, I think [the defense’s] argument of negligence and lack of due diligence by the crime lab is a very good argument, but I don’t know that it quite goes far enough for me to pull the trigger saying it’s too far.” ¶15 The parties do not dispute that the period of time from Velasquez’s arrest to the first trial is attributable to the State as institutional delay. The State argues that the period of delay from the first originally scheduled trial date to the actual trial properly was classified by the District Court as institutional delay. Relying on Ariegwe, the State claims that a “delay from waiting for test results from the Crime Lab is institutional.” Pointing out that the prosecution “had no control over when the Crime Lab would test the 8 substance,” the State faults Velasquez for “wait[ing] until July 28, 2014, to suggest in the district court that the State should inquire about the backlog at independent laboratories.” ¶16 Velasquez argues that the District Court erred in classifying all of the delay as institutional delay. He contends that “the 196-day delay between the originally scheduled trial date and the actual trial was caused by the State’s lack of diligence.” Velasquez suggests that as soon as the State learned that the crime lab would take nine months to conduct the drug testing, it should have pursued “alternative, timely testing,” and that its failure “even to consider alternative testing sites” was negligent. “The State’s choice to do nothing,” Velasquez contends, “was not a circumstance beyond the prosecutor’s control and is not mere institutional delay.” Additionally, Velasquez argues that he had no duty to suggest the use of independent labs because “it is well settled that a defendant has no duty to advance his own prosecution.” ¶17 In this case, we identify two periods of delay: (1) the 113-day delay between Velasquez’s arrest and the first scheduled trial date and (2) the 196-day delay between the first scheduled trial date and the actual trial date. We agree with the parties that the first period of delay was institutional delay attributable to the State. ¶18 With respect to the second period of delay, keeping in mind that the State bears a higher burden to provide justifications for the delay, we conclude that the delay should be attributed to the State for lack of diligence. The prosecutor’s constitutional obligation to try the defendant in a timely manner “requires a good faith, diligent effort to bring him to trial quickly.” Zimmerman, ¶ 18. In Ariegwe, 28-day and 56-day periods of delay were the result of the defendant’s motion to continue on grounds that the parties were still 9 waiting for test results from the crime lab. Ariegwe, ¶¶ 132-33. We concluded that such a delay was institutional. Ariegwe, ¶¶ 132-33. Another period of delay in Ariegwe resulted from the prosecution’s motion to continue, which revealed that the motion “was necessitated by the State’s delay in delivering evidence for testing at the crime lab.” Ariegwe, ¶ 129. That delay, we concluded, was attributable to the State due to lack of diligence. Ariegwe, ¶ 129. We observed that the failure to provide discovery or send evidence to a crime lab in a timely manner “reflects a significant lack of diligence.” Ariegwe, ¶ 154. ¶19 In the present case the State’s inaction leads us to conclude that it was not diligent. The State was aware of the nine-month backlog at the crime lab by December 2013, when it first moved to continue Velasquez’s trial. In January 2014, Velasquez raised concerns about how the testing delay might affect his speedy trial right. At the evidentiary hearing, a criminal investigator for the Roosevelt County Attorney’s Office who had been working on Velasquez’s case testified that when she emailed the crime lab to see if the drug testing had been initiated, she was “repeatedly told” that it would take nine months. Despite the State’s awareness of the backlog and Velasquez’s concerns, the record reveals no evidence that the State attempted to pursue any possible alternate testing locations after learning of and “repeatedly” confirming the nine-month delay. To be sure, the backlog at the State Crime Lab likely was “caused by circumstances largely beyond the control of the prosecutor.” Couture, ¶ 72. But the failure to inquire into the availability of independent labs was squarely in the State’s control. Mere allusion to crime lab backlog is not sufficient justification where the State has not investigated any 10 other options. See State v. Fife, 193 Mont. 486, 490, 632 P.2d 712, 715 (1981) (“Mere allusion to good faith misunderstanding and crowded court calendars is not sufficient justification where the State has not been diligent.”). ¶20 The State’s inaction in this case is similar to the State’s failure to “send[ ] evidence to the crime lab in a timely manner.” Ariegwe, ¶ 154. By simply accepting the nine-month delay and failing to potentially expedite the process by seeking out independent labs, the State showed dilatory inaction in moving the case toward trial. That Velasquez “wait[ed] until July 28, 2014, to suggest in the district court that the State should inquire about the backlog at independent laboratories” is immaterial. “[T]he accused is under no obligation to ensure diligent prosecution of the case against him, and has no duty to bring himself to trial.” Zimmerman, ¶ 24 (internal citations omitted). The State knew for more than seven months that waiting for the results would cause significant delay in bringing Velasquez to trial. Had the prosecution inquired and determined that an alternate testing source was not reasonably available, the delay likely would be considered merely institutional. But its failure to even inquire falls beneath an acceptable threshold of diligence. We thus conclude that the 196-day delay between the first scheduled trial date and the actual trial date is attributable to the State and “falls on the wrong side of the divide between acceptable and unacceptable reasons for delaying a criminal prosecution once it has begun.” Ariegwe, ¶ 69. (3) The Accused’s Responses to the Delay ¶21 In evaluating the accused’s responses to the delay, we consider the “totality of the accused’s responses” to ascertain whether the accused “actually wanted” a speedy trial. 11 Zimmerman, ¶ 22. “[T]he issue is not simply the number of times the accused acquiesced or objected[;] [r]ather, the focus is on the surrounding circumstances.” Zimmerman, ¶ 22. [T]here is no magical time for assertion of the right to a speedy trial which should be weighed more favorably to the defendant than some other time. So long as the defendant asserts his or her right to a speedy trial by a motion to dismiss on speedy trial grounds filed prior to the time of trial, we conclude that the defendant has satisfied the third-prong . . . and that further analysis of that prong is not only unnecessary, but inappropriate. Ariegwe, ¶ 137 (citation omitted). “The defendant’s assertion of his speedy trial right . . . is entitled to strong evidentiary weight in determining whether the defendant is being deprived of the right.” Ariegwe, ¶ 78 (citing Barker v. Wingo, 407 U.S. 514, 531- 32, 92 S. Ct. 2182, 2192-93 (1972)). It “serves as a gauge of the weights the court should assign to the other three factors in the balancing.” Ariegwe, ¶ 110. ¶22 Although the District Court concluded that Velasquez had affirmatively asserted his right to a speedy trial, Velasquez argues that the court “erred in not ascribing any weight to this factor.” Velasquez emphasizes that he objected to the State’s motion to continue in January, asserting his right to a speedy trial and “noting that he [had] already been incarcerated for 104 days.” His objection, Velasquez contends, “put the State on notice, nearly a hundred days before crossing the 200-day speedy trial trigger, that he wanted a speedy trial and that the State’s delaying his trial for the Montana State Crime Lab testing would violate his right to a speedy trial.” Velasquez points out that he “never asked for a single continuance” and that “[n]one of the State’s three motions to continue stated whether the State had contacted defense counsel concerning the motions or whether the defense agreed or objected to the continuances.” Velasquez argues that his 12 “timely insistence” on a speedy trial “weighs heavily” in his favor with respect to this factor and “adds weight” in his favor to the other factors. ¶23 In its response to Velasquez’s motion to dismiss, the State conceded that Velasquez had “timely asserted his right before the commencement of the trial, as required in Ariegwe.” For the first time on appeal, however, the State argues that “[a]though he objected to a continuance early on, other circumstances indicate that Velasquez did not actually want to be brought to trial promptly.” ¶24 It is well established that “a party may not raise new arguments or change its legal theory on appeal because it is fundamentally unfair to fault the trial court for failing to rule on an issue it was never given the opportunity to consider.” State v. Hendershot, 2009 MT 292, ¶ 31, 352 Mont. 271, 216 P.3d 754 (citations and internal quotations omitted). Because the State conceded in the trial court that Velasquez had “timely asserted his right” under Factor Three, we decline to address its arguments with respect to this factor on appeal. ¶25 We conclude that the District Court determined correctly that Velasquez had asserted his speedy trial right. He objected to the State’s first motion to continue and moved to dismiss the charges against him for lack of a speedy trial before proceeding to trial. That Velasquez did not object to the State’s other two motions to continue is not surprising. The record reveals that both motions were filed on a Friday and granted the following Monday. Based on the “totality of [Velasquez’s] responses,” it is clear that he “actually wanted” a speedy trial. Zimmerman, ¶ 22. 13 ¶26 We agree with Velasquez, however, that the court erred in failing to assign any weight to Factor Three. The District Court’s comments on Factor Three were frugal: “As far as your assertion of your right, you guys asserted your right. I got no argument with that one.” When balancing the factors the court did not consider Factor Three “together with the other three factors of the balancing test” as required by Ariegwe. Ariegwe, ¶ 79. The court referred only to Factors Two and Four: “[W]hen we get down, right down to the balancing, you know, the institutional delay doesn’t get weighed very heavily. I don’t know that the prejudices to the defendant outweigh that and make it so that I need to dismiss for lack of a speedy trial, but, boy, it’s getting close.” That Velasquez timely asserted his right, indicating that he actually wanted to be brought to trial, weighs in his favor and “is entitled to strong evidentiary weight in determining whether [he] is being deprived of the right [to a speedy trial].” Ariegwe, ¶ 78. (4) Prejudice to the Accused ¶27 Under Factor Four, we consider whether the delay prejudiced the accused “in light of the interests that the speedy trial right was designed to protect: (i) preventing oppressive pretrial incarceration, (ii) minimizing anxiety and concern caused by the presence of unresolved criminal charges, and (iii) limiting the possibility that the accused’s ability to present an effective defense will be impaired.” Zimmerman, ¶ 28. The parties in this case dispute each of these interests. i. Oppressive Pretrial Incarceration ¶28 Whether pretrial incarceration is oppressive depends on the “particular circumstances,” including “the duration of the incarceration, the complexity of the 14 charged offense, any misconduct by the accused directly related to his incarceration, and the conditions of the incarceration, such as overcrowding, recreational opportunities, adequate food, climate control, proper medical care, cleanliness, and legal research capabilities.” Couture, ¶ 56. “[T]he length of the pretrial incarceration that is ‘oppressive’ is less for a relatively simple offense than it is for a complex charge.” Ariegwe, ¶ 91; accord Billman, ¶ 41 (holding that a 278-day incarceration, coupled with the relatively simple charges of felony DUI and two misdemeanor driving offenses, established that the pretrial delay had prejudiced the defendant); Couture, ¶ 59 (concluding that a longer period of pretrial incarceration was justified due to the complexity of the charged offenses of deliberate homicide and tampering with evidence). When analyzing the conditions of incarceration, “we focus on the condition of the facilities and how they impact the accused, rather than solely on the condition of the accused.” Couture, ¶ 62. “The question here is one of oppressiveness, not merely occasional unpleasantness.” Ariegwe, ¶ 93. ¶29 The District Court concluded that Velasquez’s pretrial incarceration was not oppressive because it was “clear” that he “would have been incarcerated otherwise [in California]” before the current violation “ever came up.” Velasquez counters that it is “entirely speculative” whether he would have been incarcerated in California. Although his probation officer “may have been recommending incarceration,” Velasquez contends that “there is no evidence in the record what sentence the California court would have actually imposed.” Velasquez points out that he was “on the lowest level of supervision in California, and the California system has drug treatment alternatives to incarceration.” 15 ¶30 Velasquez argues that his 309-day incarceration at the Roosevelt County jail was in any event oppressive in both its duration and conditions. Velasquez emphasizes that “[f]rom October 2013 to April 2014, [he] was not allowed to go outside even once.” Velasquez contends further that he was charged excessive amounts to make phone calls and had trouble sending mail from jail. The jail, Velasquez claims, contained “visible mold and recirculated air that made [his] lungs hurt.” He claims also that the conditions of his incarceration caused him to develop a skin infection. ¶31 The State argues that the District Court correctly concluded that Velasquez otherwise would have been incarcerated in California for violations that occurred “a long time before this case arose.” The State contends that while Velasquez’s allegations about the jails may have been “[o]ccassionally disagreeable or unpleasant,” they were “not sufficient to establish oppressive conditions.” While the State acknowledges that Velasquez “did not go outside in the winter,” it points out that Velasquez “went outside several times a week when the weather was better.” The State argues further that Velasquez had “drinkable water from two sources,” and that after seeing a doctor, Velasquez’s skin condition had gotten better. ¶32 Upon review of the record, we conclude that the District Court’s finding that Velasquez would have been incarcerated in California is not supported by substantial evidence. “Substantial evidence is evidence that a reasonable person 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.” Brave, ¶ 6. At the hearing, Velsaquez acknowledged that he had received a letter a couple of months before the hearing, 16 notifying him of his alleged California probation violation and advising him of a future hearing date. Velasquez testified that after receiving the letter, he asked one of the guards at the jail to run a National Crime Information Center (NCIC) check and learned that any warrants for him “weren’t extraditable.” When the State questioned Roosevelt County criminal investigator Tierra Erwin, she testified that it was her “understanding” that California “did want [Velasquez] back.” There was no indication, however, that California sought to extradite Velasquez. The State did not introduce evidence of a bench warrant for Velasquez, and Erwin admitted that to her knowledge there exists no judgment from California against Velasquez. Erwin acknowledged that when she searched the NCIC database at the time of Velasquez’s arrest in September 2013, there was no warrant or detainer on Velasquez. The California probation officer’s report of Velasquez’s violation alleged that Velasquez had last reported to probation in January 2012; the probation violation report was filed in California in March 2014, and apparently was the first allegation of violation. The report showed that a March 2014 hearing date for the alleged probation violation had been extended to July 1, 2014— nearly ten months after Velasquez’s arrest in Montana. Although the California probation officer recommended that Velasquez be “sentenced to the mid-term and it be served in any penal institution,” Velasquez testified that he had never been actually incarcerated in California but had served house arrest for 174 days. Velasquez testified also that he believed there were other options besides incarceration available to him in California such as rehab. 17 ¶33 We cannot conclude from our review of the evidence that there is more than a “mere scintilla” to support the District Court’s finding. We conclude that a reasonable mind could not accept such evidence as adequate to support a finding that Velasquez would have been incarcerated in California even if he were not incarcerated in Montana. The court’s factual finding with respect to this issue was clearly erroneous. And, even assuming some likelihood of Velasquez’s imprisonment in California, “while the fact of incarceration on a separate charge is relevant [to the issue of oppressiveness], it is not dispositive.” Ariegwe, ¶ 92. ¶34 The hearing evidence showed that Velasquez, jailed for ten months on a non-violent drug possession charge because he was unable to meet a $5,000 bail condition, was not allowed during at least half that time—five months—to step foot outdoors. He instead attempted to exercise within the confines of his jail cell but, with visible black mold inside the jail, Velasquez’s “lungs hurt” when he tried to exercise. Jailers, when not busy with other tasks, would bring water to the inmates instead of requiring them to drink the water available in their cells, which Velasquez maintained was “not drinkable.” Velasquez was unable to maintain consistent contact with his family, either because he could not afford the one-dollar-per-minute phone charges or because jailers had cut off all prisoner phone access when someone misbehaved. (There is no evidence that Velasquez was responsible for any loss of phone privileges.) And mail to his family, and even to his attorney, did not always get delivered. ¶35 We agree with Velasquez that the impact of the facility’s conditions was more than “occasional unpleasantness.” Ariegwe, ¶ 93. We conclude that the duration of 18 Velasquez’s incarceration relative to the offense for which he was charged, combined with the conditions he endured at the Roosevelt County jail, support a finding that the circumstances of his incarceration were oppressive. ¶36 Considering the evidence in light of the intensifying presumption of prejudice created by the 309 days of delay, Velasquez has presented sufficient evidence of oppressive incarceration to meet his lowered quantum of proof. ii. The Accused’s Anxiety and Concern ¶37 In assessing the accused’s anxiety and concern, this Court focuses on “the ways in which the presence of unresolved charges disrupted the accused’s life,” keeping in mind that “[a] certain amount of anxiety and concern is inherent in being accused of a crime.” Couture, ¶ 64. “[T]he crucial question here is whether the delay in bringing the accused to trial has unduly prolonged the disruption of his or her life or aggravated the anxiety and concern that are inherent in being accused of a crime.” Ariegwe, ¶ 97. ¶38 In Zimmerman we concluded that a 289-day delay in bringing Zimmerman to trial unduly prolonged the disruption of his life and aggravated his anxiety and concern. Zimmerman, ¶ 34. We based our conclusion on the “clear causal connection between the State’s failure to diligently prosecute the charges and Zimmerman’s worsening financial situation, aggravated mental health issues, and increased stress in his family relationships.” Zimmerman, ¶ 34. ¶39 The District Court found that most of Velasquez’s anxiety and concern related to his absence from his family in California. In light of its finding that Child Protective Services already had taken Velasquez’s son away and that Velasquez had failed to 19 complete the required treatment plan to get his son back, the court concluded that there could not be “that much anxiety and concern because [Velasquez] didn’t seem to care enough to stay [in California] and get his treatment done.” ¶40 Echoing the District Court’s conclusion, the State emphasizes that Velasquez’s son “was taken from him by Child Protective Services and [Velasquez] did not complete his treatment plan when he left drug rehab early.” The State notes also that Velasquez left his son in California “six months before he was arrested in this case.” The State points out that Velasquez did not lose his job because he was incarcerated in this case but that he had lost his job a month before he was arrested. The State relies on testimony from Velasquez’s sentencing hearing to contend further that Velasquez’s incarceration actually benefitted him. ¶41 Velasquez argues that the State’s delay in bringing him to trial “unduly prolonged the disruption of his life or aggravated his anxiety and concern” because of “his inability to address his many financial, legal, and family matters while incarcerated in Montana.” At the hearing Velasquez testified that his time in jail has been “really stressful” and that he had not been sleeping well. Velasquez explained that he was worried about “[a] lot of things. My [three-and-a-half-year-old] son, my life, getting back on track, just—mainly, my son.” Velasquez admitted that Child Protective Services had taken his son and that he had not completed his treatment plan. He testified that before he left California, he had seen his son every weekend, but that because of his incarceration he has only been able to talk to his son “here and there” when he could afford a phone card. Velasquez takes issue with the State’s reliance on sentencing hearing testimony to argue that his right to a 20 speedy trial was not violated. Velasquez points out that the sentencing hearing “occurred nearly two months after the evidentiary hearing” and therefore, the testimony was not before the District Court when it analyzed the speedy trial violation. Accordingly, Velasquez argues that the sentencing testimony “is not properly part of the speedy trial record” and should not be considered by this Court. ¶42 We agree with Velasquez that our review must be “confined to the record made before the district court” at the time of the speedy trial hearing. Whitaker v. Farmhand, Inc., 173 Mont. 345, 357, 567 P.2d 916, 923 (1977). As Velasquez correctly points out, the sentencing hearing occurred well after the District Court had ruled on the speedy trial motion. It was certainly not presented to or part of the record made before the District Court. We therefore do not consider the State’s arguments with respect to testimony presented at the sentencing hearing. ¶43 While we acknowledge that the pretrial delay may have caused Velasquez anxiety and concern, based on the record before us, we do not conclude that it rose to a level beyond that “inherent in being accused of a crime.” Couture, ¶ 64. Here, unlike Zimmerman, the record does not reflect a “clear causal connection” between the State’s failure to diligently prosecute the charges and Velasquez’s financial and family issues. Zimmerman, ¶ 34. As the District Court noted, Velasquez had lost custody of his son and failed to complete his treatment plan well before he left California and became incarcerated in Montana. Likewise, Velasquez’s struggles in obtaining or maintaining employment occurred before his arrest in this case. Velasquez testified that he had lost his job before his arrest because of “money that [he] owed in California” and because he 21 had a suspended driver’s license. After losing his job but prior to his arrest, Velasquez testified that he had been looking for jobs “a little bit” but did not have a vehicle or driver’s license in order to look for jobs. ¶44 We agree with the District Court that Velasquez did not present sufficient evidence to establish that the delay in bringing him to trial in this case caused undue prolonged disruption of his life or aggravated anxiety and concern beyond what any person accused of a crime would suffer. iii. Impairment of the Defense ¶45 Impairment of the defense “constitutes the most important interest in the prejudice analysis.” Zimmerman, ¶ 36. It evaluates issues of evidence, witness reliability, and the accused’s ability to present an effective defense. Ariegwe, ¶ 98. “[T]ime may erode the accuracy of witness testimony and exculpatory evidence,” State v. Jefferson, 2003 MT 90, ¶ 36, 315 Mont. 146, 69 P.3d 641, and “pretrial delay prejudices an accused if defense witnesses are unable to accurately recall past events,” Billman, ¶ 47 (citation omitted). Because “excessive delay presumptively compromises the reliability of trial in ways that neither party can prove,” “consideration of prejudice is not limited to the specifically demonstrable.” Ariegwe, ¶ 99 (quoting Doggett, 505 U.S. at 655, 112 S. Ct. at 2692-93) (internal quotations omitted). “[I]n the absence of affirmative proof that the delay has impaired the accused’s ability to present an effective defense, impairment must be assessed based on other factors in the analysis.” Ariegwe, ¶ 100. A speedy trial claim likely would fail if the government had pursued the accused with reasonable diligence and the accused could not show specific prejudice to his or her defense as a result of the delay. Conversely, where 22 the government has been negligent in bringing the accused to trial, such negligence is not automatically tolerable simply because the accused cannot demonstrate exactly how it has prejudiced him. Zimmerman, ¶ 36 (citations and quotations omitted). ¶46 The District Court noted that a missing witness—the front-seat passenger from the vehicle in which Velasquez was arrested—had been located very close to the hearing date. The court observed, however, that “nobody really ever said what [the witness] would say or wouldn’t say to me that would make it seem that she was so important or not so important. I have no clue what she would say from everything that I read.” ¶47 Although the front-seat passenger was subpoenaed close to his trial date, Velasquez points out that the defense was not in touch with her at the time of the hearing and that she was “missing or unwilling to appear by the time of trial.” “While the record may not directly establish whether [the witness] would have been available at the original trial date,” Velasquez argues that he has made “at least some showing of a missing, exculpatory witness.” Velasquez refers to the defense investigator’s hearing testimony that the front-seat passenger “had previously made allegations to police regarding [the driver’s] actions in the vehicle.” Velasquez argues also that he presented evidence at the evidentiary hearing that other witnesses had experienced diminished memories due to the delay. In any event, Velasquez argues that “affirmative proof of specific defense impairment is not essential to every speedy trial claim.” ¶48 The State argues, “There was no evidence that Velasquez’s defense was impaired by the delay” because “[n]o evidence was presented that if the trial were sooner, [the front-seat passenger] would have been located and would have appeared,” and “no 23 evidence or indication of what [the witness’s] testimony would be.” In addition, the State claims that the District Court found that the delay “worked in Velasquez’s favor because it allowed him more time to try to locate [the witness].” ¶49 We disagree that the delay “worked in Velasquez’s favor” and note that the District Court did not draw such a conclusion. The court stated, As far as the limit the possibility the defense has, I kind of want to be a smart alec and say, it looks like now they’ve found the lost witnesses, you’re actually ahead by the delay as opposed to being behind. Although, it’s also [the State’s] witness they found, so I don’t know whether that’s a win or not. (Emphasis added.) With respect to a showing of defense impairment, the record reflects that Velasquez made some showing of prejudice at the evidentiary hearing. The investigator for the defense testified that a couple of the police officers who were involved in the case had “some recollection difficulties” when he interviewed them. As Velasquez points out, the investigator testified also that the front-seat passenger witness had made “some specific allegations” against the driver of the vehicle. While such evidence may not be “specifically demonstrable,” it is part of our consideration of prejudice. Ariegwe, ¶ 99. ¶50 Finally, even “in the absence of affirmative proof that the delay has impaired [Velasquez’s] ability to present an effective defense,” we look to other speedy trial factors to inform our analysis. Ariegwe, ¶ 100. As we determined in Factor One, the State must make a more persuasive showing that Velasquez was not prejudiced by the delay, “while the quantum of proof that may be expected of [Velasquez] under this factor is correspondingly lower.” Ariegwe, ¶ 123. In Factor Two, we determined that the 24 196-day delay between the first scheduled trial date and the actual trial date is attributable to the State’s lack of diligence in failing to consider alternative testing options. Such lack of diligence “is not automatically tolerable simply because the accused cannot demonstrate exactly how it has prejudiced him.” See Zimmerman, ¶ 36. In considering the evidence of impairment in light of the other factors, we conclude that Velasquez was prejudiced by the delay. Balancing ¶51 In balancing the four factors in the analysis, we hold that the delay in this case establishes a constitutional speedy trial violation. The length of the delay intensified the presumption of prejudice to Velasquez and increased the State’s burden to prove valid justifications for the delay. The pretrial delay due to the State’s inaction toward obtaining timely drug-testing was an unacceptable reason for postponing Velasquez’s trial, making it “more likely [that his] speedy trial right has been violated.” Ariegwe, ¶ 72. Velasquez’s response to the delay in timely asserting his speedy trial right weighs further in his favor and should have been considered in the balancing equation. Ariegwe, ¶ 110. The District Court found Factor Four to be a close call, but concluded that the prejudice Velasquez suffered did not tip the scales sufficiently to demonstrate a violation of his speedy trial right. But because the District Court gave no weight to Velasquez’s assertion of his right, and because we have determined that the State bears a heavier burden in this case to overcome the presumption of prejudice, we conclude that the scales do tip in Velasquez’s favor. 25 CONCLUSION ¶52 In the final analysis, the guarantee of a “speedy” trial rings hollow when a person too poor to afford bail sits in jail for nearly a year on a non-violent, straightforward, relatively minor drug possession charge, confined for half that time without one minute outside, and cut off in large measure from his distant family—all because the State did not attempt to determine more quickly whether the car in which he was riding in fact contained illegal drugs. ¶53 Velasquez did not receive protection of his constitutional right to a speedy trial. We therefore reverse the District Court’s denial of his motion to dismiss and remand for dismissal of the charges. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON

August 30, 2016

ec724ae8-f006-480f-8546-6e597b63f079

State v. Honka

2016 MT 233N

DA 15-0318

Montana

Montana Supreme Court

DA 15-0318 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 233N STATE OF MONTANA, Plaintiff and Appellee, v. DUEY DEAN HONKA, Defendant and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. CDC-2005-236 Honorable Kathy Seeley, Presiding Judge COUNSEL OF RECORD: For Appellant: Thomas A. Dooling, Dooling Law Office, PLLC, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Leo Gallagher, Lewis and Clark County Attorney, Jeff Sealey, Deputy County Attorney, Helena, Montana Submitted on Briefs: July 20, 2016 Decided: September 20, 2016 Filed: __________________________________________ Clerk 09/20/2016 Case Number: DA 15-0318 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Duey Dean Honka appeals the March 18, 2015 order of the First Judicial District Court, Lewis and Clark County, revoking his suspended sentence for his previous felony DUI convictions, amending judgment, and sentencing him to five years in the Montana State Prison (MSP), with four years suspended. We affirm. ¶3 In 2005, Honka was charged with three separate counts of felony DUI occurring in April 2005 (Felony 1), June 2005 (Felony 2), and July 2005 (Felony 3). Honka pleaded guilty to Felony 1 and the District Court sentenced him to thirteen months with the Department of Corrections (DOC), followed by a five-year MSP suspended sentence. Honka also pleaded guilty to Felony 2 and Felony 3 and, for each count, the court sentenced him to thirteen months with the DOC, followed by a five-year MSP suspended sentence. The court ordered the sentence imposed in Felony 2 to run consecutively to the sentence imposed in Felony 1 and the sentence imposed in Felony 3 to run consecutively to the sentence imposed in Felony 2. Honka did not appeal any of these sentences. ¶4 Honka’s sentence expired to probation in November 2007. Consequently, Honka’s five-year suspended sentence for Felony 1 expired in October 2011 and he then 3 began his five-year suspended sentence for Felony 2. In June 2013, Honka was arrested for probation violations and the State immediately filed a petition to revoke the five-year suspended sentence imposed in Felony 3. Honka was initially represented by a public defender, but filed a pro se motion to dismiss the revocation petition. Honka subsequently retained private attorney Thomas Dooling, who filed another motion to dismiss and later filed additional pretrial motions. Honka argued that his 2005 sentences were unlawful, that he had completed his sentences for Felony 2 and Felony 3 before his alleged probation violations occurred, and further claimed that the DOC had violated the Americans with Disabilities Act, 42 U.S.C. §§ 12101–12213 (2012) (ADA), during his incarceration and probation. The State responded to Honka’s motions, contending that his sentences were lawful and that he was still serving his sentence when the State filed its revocation petition, and further questioning whether his ADA claim was appropriately raised in the revocation proceeding. ¶5 On April 22, 2014, the District Court issued an order denying both Honka’s motion to dismiss and his additional pretrial motions. The court found his sentencing challenges moot because he did not appeal his 2005 sentences, and also found that his suspended sentence had not yet expired when the State filed its revocation petition. In June 2014, the District Court granted the State’s revocation petition for Felony 3 and subsequently sentenced Honka to a five-year MSP sentence, with four years suspended. ¶6 On May 18, 2015, Honka filed a notice of appeal with this Court. Honka challenges the legality of his 2005 sentence and contends that he completed his probationary period before the State filed its revocation petition. He also maintains an 4 ADA claim against the DOC, alleging that the agency’s acts or omissions during Honka’s prior incarceration and probation violated his rights under the statute. The State counters that Honka’s sentencing challenge is untimely, that he was still under probation when the State filed its revocation petition, and that he improperly raised his ADA claim in the revocation proceeding. ¶7 We review a district court’s decision to revoke a suspended sentence for abuse of discretion and whether a preponderance of the evidence supports the court’s decision. State v. Cook, 2012 MT 34, ¶ 12, 364 Mont. 161, 272 P.3d 50. To revoke a suspended sentence, the trial judge must be reasonably satisfied that the probationer breached his agreement to abide by certain conditions in exchange for his liberty. Cook, ¶ 12. ¶8 We first address Honka’s ADA claims. It is important to note that a revocation proceeding is a “purely administrative action.” State v. Haagenson, 2010 MT 95, ¶ 15, 356 Mont. 177, 232 P.3d 367. In this case, its purpose was to determine if Honka violated his probation conditions and whether his suspended sentence should be revoked as a result, not to decide whether the DOC violated the ADA during Honka’s prior incarceration or probationary period. The DOC is not a party to a revocation proceeding. If Honka believes he has a cognizable claim under the ADA, he may raise it in a separate civil proceeding against the DOC. The ADA claim was improperly raised during the criminal suspended sentence revocation proceeding. See Wilson v. Commonwealth, 522 S.E.2d 385, 387 (Va. Ct. App. 1999); see also In re Diamond H., 98 Cal. Rptr. 2d 715, 722 (Cal. Dist. Ct. App. 2000). 5 ¶9 We next review Honka’s legal challenge to his 2005 sentences. Under Montana Rule of Appellate Procedure 4(5)(b)(i), “a defendant has 60 days from the entry of the judgment to file an appeal challenging a sentence.” State v. Adams, 2013 MT 189, ¶ 15, 371 Mont. 28, 305 P.3d 808. Since Honka did not directly appeal his 2005 sentences within 60 days, we conclude that his current appeal of these sentences is untimely. ¶10 Lastly, Honka’s claim that he discharged his probationary sentence before the State filed its revocation petition is unavailing. The District Court found no legal or logical support for this contention and we agree. As noted above, when the State filed its revocation petition for Felony 3 in June 2013, Honka had not completed his probationary sentence for Felony 2 and had yet to begin his additional sentence for Felony 3. Given that § 46-18-203(2), MCA, allows a revocation petition to be filed with the sentencing court before a suspended sentence has begun, we conclude that the State filed a timely petition to revoke Honka’s suspended sentence. ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶12 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

September 20, 2016

ebd98a96-5869-46a0-aafb-1bd9a9b4b5e4

Klepper v. DOT

2016 MT 248N

DA 15-0697

Montana

Montana Supreme Court

DA 15-0697 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 248N DONALD K. KLEPPER, KAREN H. HAGGLUND, and DENNIS R. ELLIOTT, Plaintiffs and Appellants, v. STATE OF MONTANA, and the MONTANA DEPARTMENT OF TRANSPORTATION, Defendants and Appellees. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 12-1107 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellants: Donald K. Klepper (Self-Represented), Missoula, Montana Karen H. Hagglund (Self-Represented), Missoula, Montana Dennis R. Elliott (Self-Represented), Missoula, Montana For Appellees: Mark S. Williams, Susan Moriarity Miltko, Williams Law Firm, P.C., Missoula, Montana Submitted on Briefs: August 3, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0697 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Donald K. Klepper, Karen H. Hagglund, and Dennis R. Elliot (collectively Plaintiffs) appeal multiple rulings by the Fourth Judicial District Court, Missoula County, in favor of the Montana Department of Transportation (MDOT or the Department). We affirm. ¶3 In 2004, MDOT began reconstruction of Highway 93. To accommodate the construction of the wider roadway, MDOT entered into right-of-way agreements with adjacent landowners Klepper and Hagglund on June 25, 2004, and with Elliot on July 25, 2007. In March 2009, reconstruction excavation caused water runoff to flow onto Klepper and Hagglund’s land and sediment to enter Elliot’s water system. On September 27, 2012, Klepper, Hagglund, and Elliot filed a complaint alleging negligence per se, breach of contract, and violations of Article II, Sections 3 and 17 of the Montana Constitution, and requesting compensatory, punitive, and exemplary damages. The State generally denied the Plaintiffs’ allegations. ¶4 On August 20, 2013, MDOT moved for partial summary judgment on the Plaintiffs’ constitutional claims and Elliot’s tort and contract claims. The Department 3 argued that because the Plaintiffs’ tort and contract claims could entitle them to complete relief and because they claimed no separate or distinct constitutional damages, their constitutional claims could not stand as a matter of law. MDOT further argued that Elliot’s tort claims were barred by the statute of limitations. Lastly, the Department claimed Elliot had no third-party beneficiary rights under the construction permit issued to MDOT by the U.S. Army Corps of Engineers (USACE), nor did MDOT orally contract with Elliot with respect to his water system. MDOT also filed motions in limine, asking the District Court to, among other things, preclude Klepper from offering testimony on the Plaintiffs’ restoration damages and contract claims. ¶5 On December 30, 2013, the District Court granted MDOT summary judgment on the Plaintiffs’ constitutional claims and partial summary judgment on Elliot’s tort and contract claims. The court dismissed the constitutional claims, determining that no separate and distinct constitutional claims existed. It also dismissed Elliot’s tort claims, finding that his property damage and negligence claims were barred by Montana’s statute of limitations after March of 2011 and 2012, respectively. The court dismissed Elliot’s USACE contract claim, finding that he was not a third-party beneficiary under the MDOT-USACE construction permit. However, the court found a genuine issue of material fact as to whether an oral contract existed between MDOT and Elliot. ¶6 On February 7, 2014, the District Court granted MDOT’s motions in limine. The court precluded Klepper from offering his own personal expert testimony on the Plaintiffs’ restoration damage claims because Klepper refused to disclose the basis for his 4 opinions during his deposition testimony. The court also prohibited Klepper from testifying on questions of law relating to the Plaintiffs’ contract claims. ¶7 On December 29, 2014, the parties submitted their proposed jury instructions and special verdict form to the District Court. The court settled instructions on February 5, 2015, noting that the Plaintiffs raised no objections to the instructions. On September 1, 2015, the Plaintiffs attempted to submit new jury instructions. The court refused to re-open jury instructions and informed the parties that the special verdict form would be addressed following trial. ¶8 On September 16, 2015, the Plaintiffs moved for leave to amend their complaint, seeking to conduct additional discovery and expert analysis. The District Court denied the motion on the grounds that the Plaintiffs failed to provide good cause for such an amendment. ¶9 The District Court conducted a trial in October 2015. The Plaintiffs initially requested an annoyance and discomfort interrogatory in the special verdict form, but subsequently elected to argue the issue instead. On October 26, 2015, the jury returned a special verdict in favor of MDOT on all issues. The Plaintiffs filed a timely appeal. ¶10 We review a district court’s grant of summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as the district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Pilgeram, ¶ 9. Under Rule 56(c), summary judgment will be granted if the moving party can show there is no genuine 5 issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200. ¶11 We review a district court’s evidentiary rulings, jury instruction decisions, and denial of a motion for leave to amend a complaint for abuse of discretion. Beehler v. E. Radiological Assocs., P.C., 2012 MT 260, ¶ 17, 367 Mont. 21, 289 P.3d 131 (evidentiary rulings); Goles v. Neumman, 2011 MT 11, ¶ 9, 359 Mont. 132, 247 P.3d 1089 (jury instructions); Hickey v. Baker Sch. Dist. No. 12, 2002 MT 322, ¶ 12, 313 Mont. 162, 60 P.3d 966 (amended complaints). ¶12 On appeal, Plaintiffs contend that the District Court erred in dismissing their constitutional claims. A constitutional tort can only be supported if no other adequate remedy exists under Montana’s statutory and common law. Sunburst Sch. Dist. No. 2 v. Texaco, Inc., 2007 MT 183, ¶ 64, 338 Mont. 259, 165 P.3d 1079. In this case, the Plaintiffs had the opportunity for complete relief under their tort and contract claims. Thus, the District Court properly granted summary judgment on the Plaintiffs’ constitutional claims. ¶13 Elliot contends that the District Court erred in determining the statute of limitations period for his tort claim. Under §§ 27-2-204 and -207, MCA, Elliot had three years to commence his negligence claim and two years to commence his property damage claim. The record shows that his cause of action accrued in March of 2009, when sediment began to enter his water system, but that he did not file his complaint until September 27, 2012. Elliot also attempts to argue the continuing tort doctrine for the first time on appeal; however, “[i]t is well established that this Court will not review an issue 6 that was not raised in the district court.” Paulson v. Flathead Conservation Dist., 2004 MT 136, ¶ 37, 321 Mont. 364, 91 P.3d 569. ¶14 Elliot also argues that the District Court improperly dismissed his contract claim upon finding that the USACE permit failed to identify him as a third-party beneficiary. However, the USACE-MDOT permit, on its face, does not contain any language that can lead this Court to conclude that the agencies intended Elliot to be a third-party beneficiary. See Dick Anderson Const., Inc. v. Monroe Const. Co., 2009 MT 416, ¶ 46, 353 Mont. 534, 221 P.3d 675; Williamson v. Mont. Pub. Serv. Comm’n, 2012 MT 32, ¶ 40, 364 Mont. 128, 272 P.3d 71. Accordingly, the District Court properly granted partial summary judgment on Elliot’s tort and contract claims. ¶15 Plaintiffs further argue that the District Court improperly excluded Klepper’s proposed expert testimony on Plaintiffs’ restoration damage claim and his interpretation of the contracts between Plaintiffs and MDOT. With respect to the restoration damage claim testimony, the District Court excluded Klepper as an expert witness after reviewing his deposition testimony and finding that he refused to disclose the basis for his opinions. At the same time, the court gave the Plaintiffs an opportunity to offer lay testimony on the issue upon an offer of proof to the court that expert testimony was not required. Plaintiffs failed to do so and thus waived their opportunity to present this evidence at trial. Plaintiffs also argue that the court improperly precluded Klepper from offering opinions interpreting the contracts involved in this case. We have held that expert witnesses may not offer testimony on an ultimate legal issue and that “[t]he interpretation and construction of a contract is a question of law” for a court to determine. Krajacich v. 7 Great Falls Clinic, LLP, 2012 MT 82, ¶ 13, 364 Mont. 455, 276 P.3d 922; see Heltborg v. Modern Mach., 244 Mont. 24, 29-31, 795 P.2d 954, 957 (1990). As such, we conclude that the District Court did not abuse its discretion when it excluded testimony that would have, in effect, instructed the jury on how to decide the contract interpretation questions at issue here. Thus, upon review of the record, we conclude that the District Court did not abuse its discretion in granting MDOT’s motions in limine. ¶16 Plaintiffs argue that the District Court erred in denying their motion for leave to amend their complaint, claiming they met the good cause standard because they discovered scientifically significant new evidence. A trial court acts within its discretion in denying such a motion if undue delay or prejudice to a party would result, or if the motion is made in bad faith or is based upon a dilatory motive. Bitterroot Int’l. Sys. v. W. Star Trucks, Inc., 2007 MT 48, ¶ 50, 336 Mont. 145, 153 P.3d 627. The court found that granting the motion so close to trial would unduly prejudice MDOT and that Plaintiff’s failure to disclose part of the evidence to MDOT was an unacceptable litigation tactic. We conclude the District Court did not abuse its discretion in denying Plaintiff’s motion. ¶17 Finally, Plaintiffs contend that the District Court abused its discretion by refusing to instruct the jury on Klepper and Hagglund’s annoyance and discomfort claims and by not including such claims in the special verdict form. However, the Plaintiffs’ original proposed instructions did not include an instruction for annoyance and discomfort, nor did Plaintiffs object to the State’s proposed instructions during pretrial proceedings. It is well-established that “[w]e will not put a district court in error for a ruling or procedure in 8 which the appellant acquiesced, participated, or to which the appellant made no objection.” In re Caras, 2012 MT 25, ¶ 22, 364 Mont. 32, 270 P.3d 48. Additionally, while the Plaintiffs attempted to re-submit new jury instructions after the trial date was set, the District Court found the prior agreed upon instructions to be binding on the parties and the law of the case. As for the special verdict form, the record shows that Klepper acquiesced to the exclusion of the annoyance and discomfort interrogatory at the close of trial. Thus, we cannot conclude that the District Court abused its discretion in settling the jury instructions or the special verdict form. ¶18 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶19 Affirmed. /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA

October 4, 2016

22ab029b-60f9-436d-835c-81502fd25541

State v. Blake

N/A

DA 14-0053

Montana

Montana Supreme Court

DA 14-0053 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 212 STATE OF MONTANA, Plaintiff and Appellee, v. THERON JAMES BLAKE, Defendant and Appellant. APPEAL FROM: District Court of the Tenth Judicial District, In and For the County of Fergus, Cause No. DC 13-01 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Eileen A. Larkin, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Thomas P. Meissner, Fergus County Attorney, Jean A. Adams, Deputy County Attorney, Lewistown, Montana Submitted on Briefs: June 29, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 14-0053 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Theron James Blake appeals an order of the Tenth Judicial District Court, Fergus County, denying his motion to dismiss charges against him. We address: Whether the District Court prejudiced Blake when it conducted an in-chambers conference in Blake’s absence. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 On January 9, 2013, the State of Montana filed an Information charging Blake with eight offenses: seven sex offenses involving three alleged victims—two minors, B.S. and L.L., and one adult, K.L.—and one offense of tampering with evidence. Blake pled not guilty to all eight charges, and a trial was scheduled for June 25, 2013. Less than one week before trial, the State filed several motions, seeking to: (1) add a witness, (2) exclude certain evidence from trial, and (3) amend the Information as to form. Also just before trial, the State provided discovery that included a 911 recording, a Montana Crime Lab report, and police reports of two witness interviews, one of whom was an alleged minor victim. On June 21, 2013, Blake filed a motion to dismiss the case with prejudice, contending that the State’s motions were untimely, that the State committed “violations of discovery by disclosing information, exculpatory and otherwise, less than one week before trial,” and that this information would have impacted Blake’s plea negotiations. That same afternoon, the District Court conducted an emergency in-chambers conference. Blake did not appear at the conference. His counsel appeared telephonically. When asked whether she had any concerns about Blake not being present at the conference, 3 Blake’s counsel stated: “if we reach a point where I believe he needs to be present I will alert the Court.” During the conference, the District Court vacated the June 25, 2013 trial date and continued the jury trial to August 26, 2013. After the conference, the District Court issued a written order continuing the trial to August 26, 2013. The District Court also issued a written order denying Blake’s motion to dismiss, ruling that Blake’s counsel waived Blake’s right to be present at the June 21, 2013 hearing, and finding that the continuance mooted Blake’s complaints regarding the State’s late-filed discovery disclosure. ¶4 The District Court held a jury trial from August 26 through 29, 2013. The jury found Blake guilty of three offenses: one count of sexual assault of L.L. and two counts of sexual assault of B.S. On November 25, 2013, the District Court sentenced Blake to fifty years at Montana State Prison for each of the three convictions. The District Court also designated Blake as a Level II sex offender and required him to complete Phases I and II of sex offender treatment in prison. Blake appeals the District Court’s order denying his motion to dismiss, claiming that he was prejudiced by his absence at the June 21, 2013 emergency hearing, and that his convictions should therefore be reversed and remanded for a new trial. STANDARD OF REVIEW ¶5 “We exercise plenary review over constitutional questions, including alleged violations of a criminal defendant’s right to be present at critical stages of the proceedings against him.” State v. Wilson, 2013 MT 70, ¶ 9, 369 Mont. 282, 297 P.3d 1208. 4 DISCUSSION ¶6 Whether the District Court prejudiced Blake when it conducted an in-chambers conference in Blake’s absence. ¶7 Under both the Montana Constitution and the United States Constitution, a defendant has the right to be present at all “critical stages” of the criminal proceedings against him. Wilson, ¶ 11. A critical stage includes “any step of the proceeding where there is potential for substantial prejudice to the defendant.” State v. Charlie, 2010 MT 195, ¶ 40, 357 Mont. 355, 239 P.3d 934 (citation omitted). The right to be present thus attaches “whenever the defendant’s presence ‘has a relation, reasonably substantial, to the fullness of his opportunity to defend against the charge.’” State v. Reim, 2014 MT 108, ¶ 36, 374 Mont. 487, 323 P.3d 880 (quoting Charlie, ¶ 40). ¶8 In determining whether a district court violated a defendant’s right to be present, we typically consider: (1) whether the defendant was excluded from a critical stage of the proceedings; (2) whether the defendant waived his right to be present at the critical stage; and (3) whether the defendant was prejudiced by his absence. State v. Price, 2009 MT 129, ¶¶ 23-24, 350 Mont. 272, 207 P.3d 298. In this case, we conclude that Blake was not prejudiced by his absence from the emergency conference; therefore, we do not consider the initial questions of whether the conference constituted a critical stage or whether Blake validly waived his right to be present. See Price, ¶ 25. We will assume for the purposes of our analysis that the conference constituted a critical stage, and that Blake did not validly waive his right to be present. See Price, ¶ 25. 5 ¶9 Prejudice to the defendant is presumed if the error is structural in nature. See Charlie, ¶ 40. “Structural defects are constitutional violations which so infect and contaminate the framework of a trial as to render it fundamentally unfair, requiring automatic reversal.” Charlie, ¶ 40. In Charlie, the defendant argued that the district court violated his right to be present at a critical stage because he was absent from a telephonic conference in which the parties agreed to continue his trial to allow his counsel time to review a newly-discovered videotape introduced by the State. Charlie, ¶ 37. We held that, although the conference was a critical stage, the violation of Charlie’s right to be present was not structural. Charlie, ¶ 41. Similarly, in Price, further discussed below, we held that a defendant’s absence from eleven in-chambers conferences throughout his trial was not structural when “[n]othing that occurred at the conferences concerned or affected the framework within which Price’s trial proceeded or necessarily rendered the trial fundamentally unfair.” Price, ¶ 33. Here, as in Charlie, the sole purpose of the emergency conference was to discuss scheduling and ensure the parties had sufficient time to prepare for trial given the late-filed discovery. Blake’s absence from the conference was not a structural error because it was not a “constitutional violation[] which so infect[ed] and contaminate[d] the framework of a trial as to render it fundamentally unfair.” Charlie, ¶ 40; accord Price, ¶ 33. ¶10 When the violation of a defendant’s right to be present at a critical stage is not structural, we apply a harmless error analysis under which the State has the burden to demonstrate that there is no “reasonable possibility” that the defendant’s absence from the critical stage caused him prejudice. Charlie, ¶ 41. “Where the record shows that the 6 defendant was not prejudiced, we have affirmed.” Price, ¶ 24 (citing State v. Godfrey, 2009 MT 60, ¶ 25, 349 Mont. 335, 203 P.3d 834). In Price, the defendant argued that he was prejudiced by his absence from several conferences in which the district court excluded certain evidence and one conference in which the district court removed a juror. Price, ¶¶ 21, 34. We held that Price’s absence from the conference during which the court removed a juror did not cause him prejudice because the juror knew a key defense witness and indicated that she would view that witness’s testimony with skepticism. Price, ¶ 40. We further held that Price was not prejudiced by his absence at the conferences during which the district court excluded evidence because the evidence was properly excluded, and Price’s presence would not have changed that determination. Price, ¶¶ 41-43. In Charlie, we held that the defendant was not prejudiced because, “[b]y postponing the trial date in order to ensure that Charlie’s counsel had time to review the videotape, the District Court and all parties were acting to protect Charlie’s right to a fair trial.” Charlie, ¶ 46. ¶11 At the time of the conference, Blake’s trial was just four days away. The District Court stated that the purpose of the conference was not to address substantive matters, but rather to ensure the parties had sufficient time to prepare for trial. The Court indicated that it was inclined to continue the trial until late August or early September to allow Blake to complete discovery, but was receptive to comments from both parties. Blake’s counsel responded that, while the District Court’s concerns were legitimate, “[w]e will not waive speedy trial and we did not ask for a continuance of the trial.” The State requested that the District Court give Blake’s case priority if it did continue the trial 7 due to speedy trial concerns and the fact that Blake was incarcerated while awaiting trial. In his motion to dismiss, Blake claimed that having sufficient time to review the new evidence was critical to his case. Blake’s trial was held within the speedy trial deadline, and he has not alleged that his right to a speedy trial was violated. As in Charlie, by postponing the trial date so that Blake’s counsel had time to review the newly-disclosed evidence, all parties were acting to protect Blake’s right to a fair trial. See Charlie, ¶ 46. ¶12 Moreover, at no point during the conference did the District Court or any of the parties discuss the substance of the late-filed discovery or its impact on the case; the evidence was discussed only to the extent that it impacted the trial schedule. Although Blake contends that he was denied the opportunity to argue that the late disclosure of evidence impacted his plea negotiations, the District Court did not allow the parties to argue the merits of the evidence or of Blake’s motion to dismiss. As in Price, Blake’s presence would not have changed the District Court’s consideration of that issue. Therefore, there was no reasonable possibility that Blake’s absence from the emergency conference caused him prejudice. Finally, because Blake was not prejudiced by his absence from the conference, his counsel’s waiver of his right to be present could not have prejudiced him. CONCLUSION ¶13 We affirm the District Court’s decision and order. /S/ JAMES JEREMIAH SHEA 8 We Concur: /S/ MIKE McGRATH /S/ PATRICIA COTTER /S/ JIM RICE Justice Laurie McKinnon, specially concurring. ¶14 For the reasons previously set forth in my special concurrence in State v. Northcutt, 2015 MT 267, 381 Mont. 81, 358 P.3d 179, I cannot agree that a claim alleging a right to be present should be evaluated pursuant to whether it occurred during a “critical stage” of the trial. This Court borrowed the concept of “critical stage” of the proceeding from precedent of the United States Supreme Court construing the Sixth Amendment and a criminal defendant’s right to counsel. See Powell v. Alabma, 287 U.S. 45, 53 S. Ct. 55, 77 L. Ed. 158 (1932). “Critical stage” of the proceeding, as compared to the trial itself, was the term utilized to extend the right to counsel from trial to proceedings outside the trial—such as an arraignment or a pre-trial identification. It is an inapt distinction to make to events occurring within the trial itself and for which Defendant clearly has a right to counsel. Indeed, it would be an implausible argument to suggest that any part of the trial was less critical such that no right to counsel attached. Applying this incorrect analysis to a right to presence claim first appeared in our jurisprudence in State v. Matt, 2008 MT 444, 347 Mont. 530, 199 P.3d 244, and we have perpetuated the error in Charlie and Price and other subsequent cases. As a result, we have been required to unreasonably conclude that an ex parte conversation between a 9 judge and jury about what the jury would like for dinner constitutes a critical stage of the proceeding. Northcutt, ¶ 17. ¶15 I would evaluate Blake’s presence claim to determine whether “his presence has a relation, reasonably substantial, to the fullness of his opportunity to defend against the charge.” Snyder v. Massachusetts, 291 U.S. 97, 105-06, 54 S. Ct. 330, 332, 78 L. Ed. 674 (1934); State v. Schenk, 151 Mont. 493, 499, 444 P.2d 861, 864 (1968). As I believe Blake’s absence from the emergency conference did not have a substantial relationship to his opportunity to defend against the charge, I would affirm the District Court pursuant to this inquiry only. /S/ LAURIE McKINNON

August 23, 2016

773fc365-7235-4083-accb-30d5d6b1ada7

Skattum v. Motl

2016 MT 208N

DA 16-0086

Montana

Montana Supreme Court

DA 16-0086 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 208N STATE OF MONTANA, ex rel., DAN SKATTUM, Plaintiff and Appellant, v. JONATHAN MOTL, Montana Commissioner of Political Practices; M + R STRATEGIC SERVICES; and C.B. PEARSON, Individually and as an agent of M + R STRATEGIC SERVICES, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 14-739 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellant: Michael P. Sinks, Wittich Ogburn, P.C., Bozeman, Montana Chris J. Gallus, Attorney at Law, Helena, Montana For Appellees: Jaime MacNaughton, Office of the Commissioner of Political Practices, Helena, Montana Submitted on Briefs: July 27, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 16-0086 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 This appeal arises from the District Court’s denial of Dan Skattum’s (Skattum) motion to amend his complaint. Skattum argues the District Court applied the wrong standard when it denied the motion to amend, and under the correct standard, the motion should have been granted. ¶3 A district court’s ruling on a motion to amend the pleadings is reviewed for an abuse of discretion. Stipe v. First Interstate Bank-Polson, 2008 MT 239, ¶ 10, 344 Mont. 435, 188 P.3d 1063. A party may amend its pleadings only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. M. R. Civ. P. 15(a)(2). “[T]his Court has previously determined that leave to amend is properly denied when the amendment is futile or legally insufficient to support the requested relief.” Hickey v. Baker School Dist. No. 12, et al., 2002 MT 322, ¶ 33, 313 Mont. 162, 60 P.3d 966 (citation omitted). “[A]lthough the merits of a proposed amended claim are generally not to be considered by the court, the merits of a claim are to be considered if the claim is frivolous, meritless, or futile.” Hickey, ¶ 33. 3 ¶4 Jonathan Motl (Motl) is the Montana Commissioner of Political Practices (COPP). The COPP is authorized to investigate violations of Montana’s election laws and, in conjunction with county attorneys, is responsible for enforcing those elections laws. Sections 13-37-111 through -124, MCA. M+R Strategic Services, Inc. (M+R) is a New York corporation licensed to do business in Montana. C.B. Pearson (Pearson) is the senior vice president of M+R. Pearson provides expert services to M+R’s clients, including expert opinion and testimony on campaign issues related to direct mailing and voter persuasion. ¶5 At issue in this case are two contracts for services between the COPP and M+R. Under the first contract (2013 Contract), M+R agreed to provide expert witness services at a rate of $125 per hour, not to exceed a total of $5,000. M+R submitted invoices under the 2013 Contract totaling $4,500. Under the second contract (2014 Contract), M+R agreed to provide expert witness services at a rate of $200 per hour for depositions, testimony, and trial testimony, and $125 per hour for all other services. The total payment allowed under the 2014 Contract was capped at $6,000. Under the 2014 Contract, M+R submitted invoices totaling $12,770.49. ¶6 In his original complaint, Skattum sued the Defendants, alleging violations of the Montana False Claims Act. Skattum alleged M+R did not perform the work billed under the 2013 Contract. The Defendants moved for summary judgment on the issue. Before the District Court ruled on summary judgment, Skattum sought to amend his complaint to include allegations that the invoices submitted under the 2014 Contract constituted false 4 claims because they exceeded the total amount permissible under the 2014 Contract. The District Court issued an order granting summary judgment to the Defendants for claims under the 2013 Contract, and denying Skattum’s motion to amend the complaint to include claims under the 2014 Contract. Skattum appeals only the District Court’s denial of the motion to amend, arguing the District Court erred when it looked to the merits of amended complaint. ¶7 A person is liable to a government entity if he or she “knowingly presents or causes to be presented a false or fraudulent claim for payment or approval[.]” Section 17-8-403(1)(a), MCA. In its order denying the motion to amend, the District Court noted there was no specific allegation that M+R had not performed the work it submitted invoices for under the 2014 Contract. The District Court further noted all evidence indicated M+R performed the work for which they billed and were paid. The District Court concluded that Skattum’s motion to amend was futile because there was a complete absence of any evidence indicating M+R had presented a false claim for payment. ¶8 The District Court did not abuse its discretion when it examined the merits of Skattum’s proposed amended complaint. “[T]he merits of a claim are to be considered if the claim is frivolous, meritless, or futile.” Hickey, ¶ 33. Skattum offered no evidence, however speculative, of a violation of the Montana False Claims Act. As such, the District Court properly concluded any such amendment would be frivolous, meritless, or futile. 5 ¶9 We have determined to decide this case pursuant to Section 1, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. This appeal presents no constitutional issues, no issues of first impression, and does not establish new precedent or modify existing precedent. ¶10 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

August 23, 2016

764beaaa-0dec-40b9-b2ee-468dccac8eaf

Wiggins v. Residential Credit

2016 MT 312N

DA 16-0191

Montana

Montana Supreme Court

DA 16-0191 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 312N ARLAN WIGGINS, Plaintiff and Appellant, v. RESIDENTIAL CREDIT SOLUTIONS, Defendant and Appellee. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause No. DV-13-277 Honorable Deborah Kim Christopher, Presiding Judge COUNSEL OF RECORD: For Appellant: Michael Klinkhammer, Klinkhammer Law Offices, Kalispell, Montana For Appellee: Erika R. Peterman, RCO Legal, P.S., Missoula, Montana Submitted on Briefs: October 26, 2016 Decided: November 29, 2016 Filed: __________________________________________ Clerk 11/29/2016 Case Number: DA 16-0191 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Arlan Wiggins (Wiggins) appeals from the order of the Twentieth Judicial District Court, Lake County, granting Residential Credit Solution’s (RCS) motion for summary judgement. We affirm. ¶3 On July 10, 2007, Wiggins obtained a loan in the amount of $595,000 from Fairway Independent Mortgage Corporation (Fairway), executing a Note and Deed of Trust and encumbering the property currently known as 28302 Cougar Trail in Bigfork, Montana. On July 16, 2007, the Deed of Trust was recorded in Lake County, Montana, conveying the property to a trustee and naming Fairway as the lender and Mortgage Electronic Registration Systems, Inc. (MERS) as the sole nominee for Fairway and its successor and assigns. ¶4 On December 19, 2008, MERS assigned the Deed of Trust to Amtrust Bank (Amtrust) and recorded the assignment in Lake County, Montana, on January 2, 2009. Wiggins had previously executed a Notice of Assignment, Sale or Transfers of Servicing Rights, acknowledging the transfer of his loan to Amtrust, on July 10, 2007. On April 22, 2009, Wiggins, Amtrust, and MERS entered into a Loan Modification Agreement 3 which amended and supplemented the Deed of Trust, and provided a new unpaid principal balance of $645,221 on the loan. On December 4, 2009, Amtrust was closed and the Federal Deposit Insurance Corporation (FDIC) was appointed as Receiver and charged with winding up Amtrust. On July 14, 2010, FDIC sent a letter to Wiggins, advising him that the servicing of the loan had been transferred to RCS and that Wiggins should begin making payments to RCS after August 1, 2010. On July 23, 2010, RCS also sent a letter to Wiggins, informing him that RCS would be servicing his loan. ¶5 Wiggins subsequently filed for Chapter 13 bankruptcy and the U.S. Bankruptcy Court for the District of Montana approved a Stipulation and Agreement (Stipulation) on November 7, 2011. In the Stipulation, Wiggins acknowledged that he was in default in the amount of $7,984.43 under the loan obligation due RCS and agreed, among other things, that he would cure the arrearages for post-petition fees and costs and make regular monthly payments to RCS. The Stipulation also provided that, upon default, RCS was immediately entitled to seek foreclosure and liquidate the property. Wiggins failed to comply with the terms of the Stipulation and, on April 5, 2012, RCS filed a notice of non-compliance with the Bankruptcy Court, advising Wiggins that RCS was proceeding with a foreclosure action. ¶6 In April of 2012, the loan was referred to Northwest Trustee Services, Incorporated (Northwest), an agent of First American Title Insurance Company (First American). Northwest initially scheduled a trustee sale for October 30, 2012, but cancelled the sale due to its failure to give proper notice of the sale. Northwest then discovered an error in the chain of title, specifically in the assignment, which listed 4 MERS as nominee for John Adams Mortgage Company (instead of Fairway) and assigned the Deed of Trust to Amtrust. Northwest corrected the error by filing and recording a new Assignment of Deed of Trust on February 26, 2013. RCS then filed an Appointment of Successor Trustee on April 1, 2013, appointing First American as successor trustee under the trust deed. ¶7 Northwest sent Wiggins a Notice of Trustee’s Sale, scheduling a new trustee sale for September 5, 2013. The notice was sent to several addresses, including the property’s current address of 28302 Cougar Trail in Bigfork, Montana. The notice was also posted at the property address and published for three consecutive weeks in a local newspaper. The trustee sale was held on September 6, 2013. RCS was the highest bidder at the sale with a credit bid of $600,000. The Trustee’s Deed was recorded on September 12, 2013. ¶8 On November 1, 2013, Wiggins filed an Interim Motion to Set Aside Trust Sale and, after failing to properly serve RCS, filed a complaint on January 7, 2014, asking the court to move forward with his motion. The court granted Wiggins’ motion on February 21, 2014, basing its order on RCS’s failure to answer Wiggins’ complaint. On August 1, 2014, the court vacated the order after discovering numerous procedural deficiencies related to Wiggins’ motion and complaint. On December 12, 2014, Wiggins filed an amended complaint, but again failed to properly serve RCS. After RCS became aware of the amended complaint and filed its answer, Wiggins filed, and the court denied, his Motion for Entry of Default. ¶9 On September 21, 2015, RCS filed a Motion for Summary Judgment, arguing that: 1) RCS was the holder of the Note and recorded beneficiary of the Deed of Trust; 5 2) Wiggins received proper notice of the foreclosure sale; and 3) Wiggins was given the opportunity, but failed, to cure the default and remain in possession of the property pursuant to § 71-1-312, MCA. On October 9, 2015, Wiggins filed an Answer to Summary Judgment, contending that RCS had no standing to foreclose on the property because the loan documentation had been procured by fraud. On November 12, 2015, the District Court granted RCS’s Motion for Summary Judgment, finding that Wiggins had not presented a single genuine issue of material fact. The court based its rationale on the undisputed fact that Wiggins had failed to make payments on the loan or cure the default. The court acknowledged, but did not find material, both Wiggins’ belief that the documents “have or should have different numbers,” and the fact that the title contained mistakes which were corrected in order to clear the title. ¶10 On November 18, 2015, Wiggins filed a Motion to Set Aside Summary Judgment, arguing that the redaction of loan numbers by RCS’s law firm constituted fraud. He also accused RCS of forgery, falsification, and other criminal activity. RCS responded to Wiggins’ accusations with an affidavit of the firm’s paralegal, stating that the redactions were made in order to comply with federal law.1 The District Court denied Wiggins’ motion and entered its final judgment in favor of RCS on February 11, 2016. Wiggins filed a timely appeal. 1 The Gramm-Leach-Bliley Act, 15 USC § 6801 (2012), requires financial institutions to protect the security and confidentiality of their customer’s nonpublic personal information. Federal regulations interpreting the statute state that “[n]onpublic personal information includes any list of individuals’ names and street addresses that is derived in whole or in part using personally identifiable financial information (that is not publicly available), such as account numbers.” 16 C.F.R. 313.3(n)(3)(i) (2000). 6 ¶11 We review a district court’s grant of summary judgment de novo, applying the same criteria of M. R. Civ. P. 56 as the district court. Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. We review a district court’s conclusions of law to determine whether they are correct and its findings of fact to determine whether they are clearly erroneous. Pilgeram, ¶ 9. Under Rule 56(c), summary judgment will be granted if the moving party can show there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. Roe v. City of Missoula, 2009 MT 417, ¶ 14, 354 Mont. 1, 221 P.3d 1200. ¶12 Wiggins appeals the District Court’s ruling in favor of RCS as it applies to his claims that the RCS loan documents are fraudulent. He also argues for the first time on appeal that redactions made to the loan documents rendered them inadmissible under M. R. Evid. 902(8). It is undisputed that Wiggins received a loan for a house and subsequently failed to make payments on the loan. Indeed, in his amended complaint, Wiggins stated that he “owes someone on my mortgage, but it’s not RCS.” We note that this statement is inconsistent with the bankruptcy Stipulation, wherein Wiggins specifically acknowledged RCS as his creditor and agreed to make regular monthly payments to RCS. Nonetheless, Wiggins claims that RCS had no legal right to foreclose on the property because the loan documents do not properly reflect to whom he owes money. The District Court determined that the steps RCS took to comply with federal law and correct the title after Wiggins failed to meet his loan obligation did not create a genuine issue of material fact. We agree. 7 ¶13 Addressing Wiggins’ claim that RCS committed fraud when it redacted loan numbers and corrected the chain of title by filing and recording a new Assignment of Deed of Trust, we conclude that the District Court was not required to address the fraud allegation because Wiggins did not plead fraud in his original or amended complaint. Under M. R. Civ. P. 9(b), a party alleging fraud must plead the circumstances constituting fraud with particularity. Fossen v. Fossen, 2013 MT 299, ¶ 9, 372 Mont. 175, 311 P.3d 743. To sustain a fraud claim, one must plead and prove the following nine elements of fraud: (1) a representation; (2) falsity of the representation; (3) materiality of the representation; (4) speaker’s knowledge of the falsity of the representation, or ignorance of its truth; (5) speaker’s intent that it 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 was caused by reliance on the representation. Fossen, ¶ 9 (quoting Krone v. McCann, 197 Mont. 380, 387, 642 P.2d 584, 587-88 (1982)). A pleading is sufficient when it “gives adequate notice to an adverse party enabling it to prepare a responsive pleading.” Fossen, ¶ 9. ¶14 In this case, Wiggins did not plead fraud with sufficient particularity to give RCS adequate notice of his claim. In his amended complaint, Wiggins simply claimed that the “assignments of deed of trust were fabricated” such that he could not sell the home because “a clean chain of title was taken from me.” However, such bare assertions are insufficient for us to conclude that he has alleged the facts and circumstances constituting fraud with particularity. His allegations are too indefinite and stated so generally that we cannot determine which acts comprise the nine elements of fraud. While a court may 8 give pro se litigants a certain amount of latitude with respect to procedural oversights, “that latitude cannot be so wide as to prejudice the other party, and it is reasonable to expect all litigants, including those acting pro se, to adhere to procedural rules.” Sun Mountain Sports, Inc. v. Gore, 2004 MT 56, ¶ 28, 320 Mont. 196, 85 P.3d 1286 (quoting Greenup v. Russell, 2000 MT 154, ¶ 15, 300 Mont. 136, 3 P.3d 124). It is the plaintiff’s burden to plead a cause of action adequately and Wiggins did not do so in this case. Jones v. Mont. Univ. Sys., 2007 MT 82, ¶ 42, 337 Mont. 1, 155 P.3d 1247. As such, we conclude that the District Court did not err in granting summary judgment to RCS. ¶15 Additionally, for the first time on appeal, Wiggins attempts to argue that the District Court erred in relying on redacted loan documents because the documents do not qualify as self-authenticating evidence under M. R. Evid. 902(8). However, “[i]t is well established that this Court will not review an issue that was not raised in the district court.” Paulson v. Flathead Conservation Dist., 2004 MT 136, ¶ 37, 321 Mont. 364, 91 P.3d 569. Accordingly, we decline to address the merits of Wiggins’ evidentiary argument on appeal. ¶16 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s findings of fact were not clearly erroneous and its interpretation and application of the law was correct. ¶17 Affirmed. 9 /S/ MICHAEL E WHEAT We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE

November 29, 2016

f20f1b2d-1f3d-4e37-80ed-0e74dcbaf37e

Benson et al v. Hopseker et al

2016 MT 225N

DA 15-0760

Montana

Montana Supreme Court

DA 15-0760 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 225N BARBARA J. BENSON and DAVID L. NEUMANN, Claimants and Appellants, v. KAREN HOPSEKER, MOLLIE KIERAN, LISEL IRONS, BONNIE DAWSON, RONALD DAWSON, and FRANK CAVANAUGH, Objectors and Appellees. APPEAL FROM: Water Court of the State of Montana, Cause No. 76C-A2; Honorable Douglas Ritter, Presiding Judge COUNSEL OF RECORD: For Appellants: Colleen A. Coyle, Hertha L. Lund, Julia J. Brown, Lund Law, PLLC Bozeman, Montana For Appellees: Karen Hopseker, self-represented, Newport, Oregon Mollie Kieran, Lisel Irons, self-represented, Troy, Montana Frank Cavanaugh, self-represented, Wimauma, Florida Bonnie Dawson, Ronald Dawson, self-represented, Sequim, Washington Submitted on Briefs: August 17, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 15-0760 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Claimants Barbara Benson and David Neumann appeal a Water Court ruling on their motions to amend their Fisher River Basin water right claims—76C 15176-00 (Claim 76) and 76C 15177-00 (Claim 77)—and its resolution of the Appellees’ objections.1 ¶3 The original appropriations for Claim 76 and Claim 77 were filed in 1930. In 1984 the claims were included in the Temporary Preliminary Decree for the Fisher River Basin and received no initial objections. Claimants filed their first motion to amend the water right claims in 2007. Objectors filed a number of objections. The Master held a hearing on the motion and objections in 2010. After the hearing, the Master determined that Claimants were requesting amendments that went beyond the original motion. The Master ordered Claimants to file an amended motion and to provide notice of all the amendments they were seeking. ¶4 Claimants filed a second amended motion to amend in 2011 that requested several changes to Claim 76 as well as implied water right claims for stock and domestic use 1 Appellees are Karen Hopseker, Mollie Kieran, Lisel Irons, Bonnie Dawson, Ron Dawson, and Frank Cavanaugh, referred to collectively as “Objectors.” 3 from the Pleasant Valley Fisher River and an implied water right claim for historical irrigation use from Spring Creek. ¶5 Following a hearing, the Master, at the request of the parties, directed the Montana Department of Natural Resources and Conservation to conduct a field investigation. Both parties filed responses to the field investigation report. The Master issued a report in February 2014. The Master recommended quantified annual volumes for both claims: 487.00 acre-feet for Claim 76 and 38.00 acre-feet for Claim 77. The Master declined to recommend generating implied claims from either the Pleasant Valley Fisher River or Spring Creek. The Water Court issued an order, finding all of the Master’s recommendations supported by substantial evidence and adopting the Master’s report in whole. ¶6 We review the Water Court’s order de novo to determine whether it correctly applied the clear error standard of review to the Master’s findings of fact and whether its conclusions of law were correct. Whether the standard of review was applied correctly is a question of law. Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 2014 MT 167, ¶ 26, 375 Mont. 327, 328 P.3d 644. We review the Water Court’s findings to determine whether they are clearly erroneous. Skelton Ranch, ¶ 26. ¶7 The Master determined that volume quantification was appropriate because, particularly given the longstanding hostilities between Claimants and Objectors, volume quantification was necessary to administer the water right. The Water Court agreed. This determination is within the discretion of the Water Court. Section 85-2- 234(6)(b)(iii), MCA; In re Eldorado Coop Canal Co., 2016 MT 94, ¶ 25, 383 Mont. 205, 4 369 P.3d 1034. There is substantial evidence to support the Master’s findings and the Water Court did not err in adopting the recommendation for volume quantification. ¶8 For the first time on appeal, Claimants argue that the motion to amend process under § 85-2-233(6), MCA, “is not the correct procedure for the Water Court to issue a volume for one of the parties involved.” We decline to address Claimants’ argument on this issue. “[W]e do not consider new arguments or legal theories for the first time on appeal.” Pilgeram v. GreenPoint Mortg. Funding, Inc., 2013 MT 354, ¶ 20, 373 Mont. 1, 313 P.3d 839. The argument Claimants made with respect to volume quantification before the Water Court was that there was “no justification for a volume restriction” and that the findings upon which the Master based his conclusion to impose a volume restriction were clearly erroneous. Claimants’ argument on appeal that the Master lacks authority in the first place to quantify volume in a proceeding on a motion to amend is a new legal theory that they never raised before the Water Court. Accordingly, we will not consider Claimants’ argument on appeal. ¶9 We also decline to address Objectors’ arguments that the Water Court erred in determining the volume amount, flow, place of use, and periods of use. To preserve an issue not raised by an appellant, a respondent must file a timely notice of cross-appeal. Billings Firefighters Local 521, Int’l Ass’n of Firefighters v. City of Billings, 1999 MT 6, ¶ 31, 293 Mont. 41, 973 P.2d 222; M. R. App. P. 4(5)(a)(iii). If they wished to challenge any of the Water Court’s rulings, the Objectors were required to have filed a notice of cross-appeal within the time permitted by M. R. App. P. 4(5)(a)(iii). Because Objectors 5 did not file a cross-appeal, we will not address their arguments on this issue. See Billings Firefighters Local 521, ¶ 31. ¶10 Claimants’ second argument is that the Water Court erred by denying Claimants’ implied claims as a matter of law, and because the court disregarded its own findings of fact. Claimants argue that there is “no authority” for the Master’s conclusion that implied claims are barred in proceedings on a motion to amend pursuant to § 85-2-233(6), MCA, and contend that the Water Court erred by not addressing this conclusion. Claimants argue further that the Master’s report “actually found that Claimants had met the necessary elements for an implied claim” and that, “[a]t a minimum,” they established the elements for an implied claim of historical use of Spring Creek for irrigation. ¶11 The Master premised his rejection of the implied claims on the evidence, presenting his interpretation of § 85-2-233(6), MCA, as “yet another bar” to the implied claims. Relevant to Claimants’ arguments here, the Master found that irrigation from Spring Creek did not begin until the 1973 irrigation season and that Claimants’ alleged historical use was “vague” and “contradicted by direct testimony” from Claimants’ own witnesses. The Master thus concluded that “the evidence presented regarding continuing historical use of Spring Creek was NOT sufficient to corroborate the generation of an implied claim.” ¶12 The Water Court reviewed and adopted the Master’s findings, determining that there was substantial evidence to support the Master’s recommendations to deny an implied irrigation claim from Spring Creek and implied stock and domestic claims from the Pleasant Valley Fisher River. The court noted that the evidence supporting irrigation 6 use of Spring Creek was conflicting, but held that the Master did not misapprehend the effect of the evidence by finding that better evidence—testimony of witnesses with firsthand knowledge of historical irrigation on Claimants’ property—did not support this irrigation as historical practice. ¶13 With respect to the Pleasant Valley Fisher River, the Water Court found no evidence supporting domestic use through the Lloyd Ditch, and nothing in the Statements of Claim that would support use of the Lloyd Ditch as the only source of water for livestock during the winter. Absent any indication that the Statements of Claim intended to claim both stock and irrigation, the court determined that an implied claim for stock was not appropriate. Claimants do not argue error with respect to this ruling. ¶14 The Water Court did not rely on the Master’s interpretation of § 85-2-233(6), MCA, and we find it unnecessary to reach that question. Claimants have not demonstrated clear error in the Master’s findings of fact regarding actual historic use. The record contains substantial “relevant evidence which a reasonable mind might accept as adequate to support [the Master’s] conclusion[s].” Montanans v. State, 2006 MT 277, ¶ 79, 334 Mont. 237, 146 P.3d 759 (internal quotations omitted). The Water Court correctly applied the clear error standard of review and properly determined that the evidence supported the Master’s conclusions. ¶15 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. This appeal presents no constitutional issues, no issues of first impression, and does not establish new 7 precedent or modify existing precedent. We affirm the Water Court’s order adopting the Master’s report. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT

September 6, 2016

6ebaaab8-e0e9-4d60-a9f0-c0087827c42a

In re Guardianship & Conservatorship of A.M.M.

2016 MT 213

DA 15-0141

Montana

Montana Supreme Court

DA 15-0141 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 213 IN THE MATTER OF THE GUARDIANSHIP AND CONSERVATORSHIP OF, A.M.M., An Incapacitated Person. APPEAL FROM: District Court of the Twentieth Judicial District, In and For the County of Lake, Cause Nos. DG 14-2 and DG 14-3 Honorable James A. Manley, Presiding Judge COUNSEL OF RECORD: For Appellant: Genet McCann, Avalon Law, LLC, Big Sky, Montana For Appellee: Tammy Wyatt-Shaw, Marcel A. Quinn, Hammer, Quinn & Shaw, PLLC, Kalispell, Montana Clinton, Fischer, Casey Emerson, Fischer Law Offices, P.C., Polson, Montana (Attorneys for Appellee/Guardian Emerson) Douglas J. Wold, Wold Law Firm, P.C., Polson, Montana (Attorney for Co-Conservators) Submitted on Briefs: June 1, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 15-0141 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Timothy McCann and Genet McCann appeal from three groups of orders entered by the Twentieth Judicial District Court, Lake County, in its efforts to oversee the guardianship and conservatorship of their elderly mother, A.M.M., including the preliminary injunction, Rule 11 sanctions, and request for recusal.1 This is Timothy’s second appeal to this Court in this matter. Appellees Paul McCann Jr. and Polson attorney Douglas J. Wold (together, Co-Conservators) and Casey Emerson (Guardian) submitted briefs in response. Genet, an attorney, represents herself and Timothy on appeal. Wold represents himself and Paul Jr. on appeal. We affirm. ¶2 Timothy and Genet raise twelve issues on appeal. We find the following three issues dispositive and restate them as: 1. Whether the District Court abused its discretion by granting Guardian’s motion for a preliminary injunction. 2. Whether the District Court erred by denying Genet’s motion to recuse. 3. Whether the District Court erred by sanctioning Genet. 1 Timothy and Genet fail to develop several arguments, especially relating to the first annual accounting, or cite relevant, favorable authority to support them. Parties must present a reasoned argument to advance their positions, supported by citations to appropriate authority. M. R. App. P. 12(1)(g). “When a party fails to do so, our caselaw is well-settled. We will not consider unsupported issues or arguments.” Griffith v. Butte Sch. Dist. No. 1, 2010 MT 246, ¶ 42, 358 Mont. 193, 244 P.3d 321 (citation omitted). We decline to consider Timothy and Genet’s undeveloped, unsupported arguments. 3 FACTUAL AND PROCEDURAL BACKGROUND ¶3 Born in 1922, A.M.M. is the widowed mother of eight adult children: William, Thomas, Paul Jr., Miriam, Genet, Timothy, Kathleen, and Sheila.2 On March 14, 2014, the District Court concluded A.M.M. is an incapacitated person as defined by § 72-5-101(1), MCA. To protect A.M.M. and her substantial assets, the court appointed Polson attorney Casey Emerson as A.M.M.’s guardian; and son Paul Jr., son Timothy, and Wold as A.M.M.’s joint conservators. On October 7, 2014, the court granted Timothy’s voluntary withdrawal as Co-Conservator. ¶4 On January 2, 2015, Guardian filed a motion for preliminary injunction and temporary restraining order asking the District Court to enjoin Timothy and Genet from engaging in certain activities Guardian believed were detrimental to A.M.M.’s health. On January 7, 2015, the court held a hearing on Guardian’s motion. The morning of the hearing, Genet acted as Timothy’s attorney by filing a pleading on his behalf. However, twelve minutes before the hearing, Timothy filed a “Notice of Withdrawal of Attorney and My Appearance Pro Se.” At the hearing, the court denied Genet leave to withdraw as Timothy’s attorney due to Genet’s failure to comply with the rules governing withdrawals and because “[t]his is the latest in a pattern of conduct in which Tim has attempted to frustrate and delay scheduled hearings, which began with the earliest hearings in this case.” Genet did not appear at the hearing. Timothy was physically 2 Additional factual background can be found in Timothy’s first appeal to this Court, In re Guardianship and Conservatorship of A.M.M., 2015 MT 250, 380 Mont. 451, 356 P.3d 474 (A.M.M. I). 4 present, but the court denied him leave to appear pro se because he had counsel of record, Genet. ¶5 On February 4, 2015, the District Court issued findings of fact, conclusions of law, and a preliminary injunction. The court found A.M.M. “suffers from dementia and other health conditions which are exacerbated by stress, anxiety, and sleep interference” and, according to her treating physician, “[a]nything that contributes to a higher stress and anxiety level is detrimental to her physical, mental and emotional well-being.” ¶6 The District Court found Timothy and Genet had engaged in activities negatively impacting A.M.M., her caregivers, and Guardian. For example, Timothy and Genet “strongly objected” to a trip A.M.M. planned to take during winter to visit her daughter Sheila where she lived in California. “Although they would apparently not object to [A.M.M.] going to Arizona or Hawaii with Tim accompanying her, they contended this trip to California would be detrimental to her health.” They tried to prevent her from going. Evidence in the record showed that they “loudly read the newspaper, within [A.M.M.’s] hearing, about the Air Asia plane crash,” talked about earthquakes in California, and took A.M.M. to a new doctor and “coached her to be ‘strong’ and tell this doctor that she did not want to go.” Timothy and Genet “have disparaged and insulted” A.M.M.’s caregivers, called one an obscene name, accused others of stealing towels or glasses, and created an “unpleasant and difficult work environment for these caregivers.” Timothy and Genet “have interfered with and ignored the authority of the Guardian” and “have been inappropriately aggressive and accusatory toward the Guardian.” The court found further: 5 Two of [A.M.M.’s] children, Tim McCann and Genet McCann, during the pendency of this action, have acted in ways that caused significant stress and anxiety to [A.M.M.]. This situation has continued for a year. It appears that Tim and Genet love their mother, but do not grasp that their actions are harming her. Both are intelligent, educated people. However, despite repeated and clear attempts to communicate this reality to them (that their actions are harming their mother’s health), they appear to either be unable to understand this, or unable or unwilling to modify their behavior. Any judge would be reluctant to restrict adult children’s time with their mother, but this situation should not be allowed to continue. ¶7 The District Court’s preliminary injunction restricted Timothy and Genet’s time with A.M.M., but allowed them to attend church with A.M.M. and visit her, at her home, between 9 a.m. and 12 p.m., if she was awake and either a caregiver or Guardian was present. The injunction stated that the restrictions did not apply to family gatherings where other siblings or relatives were present. It also provided that either Timothy or Genet could request a modification of its terms. The preliminary injunction required Timothy and Genet to return their keys to A.M.M.’s home. It also enjoined them from discussing, either with or in front of A.M.M., “financial matters, legal proceedings, feuds or difficulties between siblings, or any other matters which will foreseeably cause additional stress and anxiety for [A.M.M.]” or “make derogatory remarks within [A.M.M.’s] hearing, about the Guardian, Conservators, caregivers, or any relatives” and “[t]hey shall not speak with [A.M.M.] about this Preliminary Injunction.” ¶8 On February 13, 2015, Co-Conservators filed a motion for Rule 11 sanctions against Genet, but later withdrew it. On March 2, 2015, Genet filed a request for Rule 11 sanctions against Wold and a request that Judge Manley recuse himself. Genet argued she should not be sanctioned, but that Wold should be sanctioned for filing “frivolous 6 Motions,” and accused Judge Manley of “bias,” being in an “unethical association” with Wold, and employing Wold’s daughter as his judicial assistant. Both “requests” were denied. On May 22, 2015, Genet filed a motion for recusal wherein she reiterated her earlier arguments, accusation of bias, and added felonious accusations against Guardian, alleging she had committed “criminal tampering with a subpoenaed witness” and “engaging in official criminal misconduct.” ¶9 In its June 24, 2015, order, the District Court noted that during the hearing on May 22, 2015, Genet was “contrite and apologetic for her words and tone used in her pleadings.” The court noted that Genet cited her lack of legal experience for her conduct and appeared to be sincere. “However, three minutes before the hearing began, [Genet] filed a 22 page motion for recusal and brief. This was similar to previous motions for recusal filed herein, except perhaps even more vitriolic.” Genet “filed this offensive pleading pro se, even though she was represented by two attorneys who were, in fact, personally present in the courtroom across the hall from the clerk’s office.” The court concluded the motion’s “allegations of misconduct against Mr. Wold and the Court are without factual or legal basis, and were made without inquiry reasonable under the circumstances.” The court noted “[t]he juxtaposition of [Genet’s] oral contrition and written vitriol is unusual, to say the least, and raises serious question[s about] whether she is capable of conforming her behavior to acceptable standards of practice and civility.” Genet had formed a “pattern of frivolous, incompetent, offensive and unfounded allegations made against numerous attorneys and others in past pleadings.” The District Court found her in violation of Rule 11 and imposed sanctions. Genet was required to 7 pay reasonable attorney fees and costs incurred by Guardian and Co-conservators in connection with the Rule 11 matter and prohibited from filing “any other pleadings in this case, unless such pleading is also signed by a licensed, practicing Montana lawyer.” Genet and Timothy appeal, asserting various constitutional violations and other forms of prejudice suffered at the District Court. STANDARDS OF REVIEW ¶10 A district court has broad discretion to grant or deny a preliminary injunction and we review the court’s decision for an abuse of that discretion. Cole v. St. James Healthcare, 2008 MT 453, ¶ 9, 348 Mont. 68, 199 P.3d 810 (citations omitted). We review a district court’s findings of fact to determine whether they are clearly erroneous and its conclusions of law for correctness. In re Charles M. Bair Family Trust, 2008 MT 144, ¶ 28, 343 Mont. 138, 183 P.3d 61 (citations omitted). “[W]e will review a judge’s disqualification decision de novo, determining whether the lower court’s decision not to recuse was correct under the Montana Code of Judicial Conduct.” State v. Dunsmore, 2015 MT 108, ¶ 10, 378 Mont. 514, 347 P.3d 1220. “[W]e review de novo the district court’s determination that the pleading, motion or other paper violates Rule 11.” Byrum v. Andren, 2007 MT 107, ¶ 19, 337 Mont. 167, 159 P.3d 1062. DISCUSSION ¶11 1. Whether the District Court abused its discretion by granting Guardian’s motion for a preliminary injunction. ¶12 Timothy and Genet argue the District Court abused its discretion by granting Guardian’s motion for a preliminary injunction. First, Timothy and Genet argue the 8 preliminary injunction violated several of A.M.M.’s constitutional rights. However, we have already held that Timothy lacks standing and cannot “assert A.M.M.’s constitutional due-process rights.” A.M.M. I, ¶ 28. Likewise, Timothy lacks standing to assert any new violations of A.M.M.’s constitutional rights and, for these same reasons, Genet also lacks standing. See A.M.M. I, ¶¶ 24-29. Timothy and Genet lack standing to present arguments premised upon A.M.M.’s constitutional rights. ¶13 Next, Timothy and Genet argue the District Court violated each of their constitutional rights to due process and equal protection by granting the preliminary injunction. However, Timothy and Genet do not advance any authority for their proposition that the constitutional rights of adult children are implicated in the guardianship and conservatorship proceedings of an incapacitated parent. The focus of these proceedings is on A.M.M. and her well-being. “Guardianship for an incapacitated person may be used only as is necessary to promote and protect the well-being of the person.” Section 72-5-306, MCA. We have stated that “a petition to appoint a guardian is not an adversarial proceeding, but rather a proceeding to promote the best interests of the person for whom guardianship is sought.” In re Estate of Bayers, 1999 MT 154, ¶ 14, 295 Mont. 89, 983 P.2d 339 (citation omitted). Timothy and Genet have not demonstrated that they have standing to present arguments premised on a violation of their own constitutional rights. ¶14 Timothy and Genet argue § 27-19-303, MCA, “ensures a respondent to an injunction order is afforded an opportunity to be heard.” They argue Timothy was denied 9 that opportunity at the show cause hearing when the District Court denied Genet leave to withdraw as Timothy’s attorney and denied Timothy leave to appear pro se. ¶15 “An injunction is an order requiring a person to refrain from a particular act.” Section 27-19-101, MCA. Before granting an injunction, a hearing is required to show cause “why the injunction should not be granted.” Section 27-19-301(2), MCA. “The injunction order may be granted after the hearing” and at the hearing “each party may present affidavits or oral testimony.” Section 27-19-303(1), (2), MCA. “The attorney in an action or special proceeding may be changed at any time before or after judgment” upon consent of both client and attorney or by court order “upon the application of either client or attorney, after notice from one to the other.” Section 37-61-403, MCA. Additionally, the Montana Uniform District Court Rules require that an attorney who withdraws from representing a party to a civil proceeding to “inform the court and all other parties of the full name and address of his/her client.” M.U.D.C.R. 10(a). Then, the opposing party must give the newly unrepresented party notice that the party is required to appoint new counsel within twenty one days or appear pro se in further proceedings. M.U.D.C.R. 10(b). This Court has stated that we require “strict compliance” with the requirements of Rule 10. Stewart v. Rice, 2013 MT 55, ¶ 32, 369, Mont. 203, 296 P.3d 1174 (citation omitted). ¶16 The District Court held a show cause hearing on January 7, 2015. This hearing provided Timothy with an opportunity to show cause “why the injunction should not be granted.” However, Timothy initiated a change in representation twelve minutes prior to the beginning of the hearing. Genet acted as Timothy’s attorney, by filing a pleading on 10 his behalf earlier that day, but did not appear at the hearing. There was no indication Genet was unavailable to represent Timothy at the hearing. The District Court denied Genet leave to withdraw and Timothy leave to proceed pro se for their failure to comply with § 37-61-403, MCA, because doing so would cause delay, and the court recognized that Timothy had a pattern of “frustrat[ing] and delay[ing] scheduled hearings.” ¶17 Timothy’s attempt to change representation did not meet the requirements of § 37-61-403, MCA, because his “Notice of Withdrawal of Attorney and My Appearance Pro Se” did not indicate whether Genet had either consented to her withdrawal or been given notice from Timothy. In its order denying Genet leave to withdraw, the District Court stated, “Because of [M.U.D.C.R. 10], the last-minute attempt (or last 12 minute attempt), to change from a represented party to a pro se party would have required immediately vacating the hearing, and the represented parties to give [Timothy] notice of all the information required by Rule 10(b), and a delay of at least 21 days before the hearing could be held pursuant to Rule 10(d).” Reviewing the record prior to the show cause hearing, Timothy was initially represented by the law firm Datsopoulos, MacDonald, and Lind, who then withdrew; Genet, who then withdrew; Wendell B. Dunn, who then withdrew; and then again by Genet. In between being represented by counsel, Timothy proceeded pro se. The District Court could have denied Genet leave to withdraw and Timothy leave to appear pro se for any one of the reasons upon which it relied and did not abuse its discretion by denying both motions. ¶18 Evidence showed Timothy and Genet’s behavior was inappropriate, disruptive, and not in A.M.M.’s best interests. The preliminary injunction’s restrictions were 11 reasonable and furthered A.M.M.’s best interests while still allowing Timothy and Genet to maintain a relationship with A.M.M. The District Court followed proper procedures by holding a hearing and providing an opportunity for Timothy and Genet to show why it should not grant Guardian’s request for a preliminary injunction. The District Court did not abuse its discretion by granting the preliminary injunction. ¶19 2. Whether the District Court erred by denying Genet’s motion to recuse. ¶20 On March 2, 2015, Genet requested Judge Manley recuse himself.3 Responding to her request, the District Court stated “Genet has not filed a motion for substitution pursuant to MCA 3-1-804, or a motion for disqualification for cause with affidavit of prejudice pursuant to MCA 3-1-805.” The court denied Genet’s request. On May 22, 2015, hours before the hearing set for Rule 11 and contempt proceedings, Genet filed a “Motion for Recusal from DG 14-2; or in the alternative, Motion for Recusal for Rule 11 Contempt Proceedings; Brief in Support.” ¶21 A party in a civil action may move to disqualify a judge. Preliminarily, we must note that the issue of whether Genet, daughter of the protected person, is a party to these proceedings has not been raised by any of the litigants and is therefore not before us. Further, it is not necessary to decide whether Genet is a “party” to these proceedings as we resolve the issue based upon the District Court’s reasoning. The procedure for 3 It is unclear in many pleadings throughout the District Court record and in the briefs on appeal, whether Genet is representing herself, Timothy, or both herself and Timothy. The District Court record shows that Genet argued both that she was not a party to the proceedings and, thus, the District Court lacked jurisdiction over her. Other times she insisted she was a party and her constitutional rights were implicated. Genet’s motion to recuse was, apparently, filed only on her own behalf. 12 disqualification is set forth in § 3-1-805, MCA. “Whenever a party to any proceeding in any court shall file an affidavit alleging facts showing personal bias or prejudice of the presiding judge, such judge shall proceed no further in the cause.” Section 3-1-805(1), MCA. The affidavit must be filed more than 30 days before the date set for hearing or trial, must be accompanied by a certificate that it is made in good faith, and, if the affidavit is not proper in form or fails to allege facts showing personal bias or prejudice, the motion may be set aside as void. Section 3-1-805(1)(a)-(c), MCA. A judge must not sit or act in any action or proceeding to which he is a party, interested, related to a party, related to an attorney, or related to any attorney or member of a firm of attorneys of record for a party. Section 3-1-803, MCA. ¶22 Genet failed to file an affidavit alleging bias or prejudice. Instead, on appeal, Genet argues Judge Manley erred by not recusing himself because he violated Montana Rules of Judicial Conduct 2.12 and 2.13 and violated her right to due process. Rule 2.12 governs disqualification. “[D]isqualification questions in the Montana state courts are governed by the Montana Code of Judicial Conduct” and, because the Code “provides more protection than due process requires, most disputes over disqualification will be resolved without resort to the Constitution.” Dunsmore, ¶ 12 (citations omitted). “A judge shall disqualify himself or herself in any proceeding in which the judge’s impartiality might reasonably be questioned,” including if the judge has a personal bias or personal knowledge of the facts in dispute. M. C. Jud. Cond. Rule 2.12(A). Rule 2.13 governs supervisory duties. “A judge shall require court staff, court officials, and others 13 subject to the judge’s direction and control to act in a manner consistent with the judge’s obligations under this Code.” M. C. Jud. Cond. Rule 2.13. ¶23 Genet argues Judge Manley violated Rule 2.12 because a prior association with Wold created a bias in Wold’s favor and Rule 2.13 because he employed Wold’s daughter as his judicial assistant while she also worked for Wold. The District Court concluded that: The allegations of misconduct against Mr. Wold and the Court are without factual or legal basis, and were made without inquiry reasonable under the circumstances. [Genet] thereby violated Rule 11. [Genet] offered no evidence to prove the allegations of misconduct were true, or even that she had a reasonable basis for repeatedly making those same allegations which had been made in the past, and shown to be without merit. Nor did she offer evidence of reasonable inquiry. The District Court proceeded to sanction Genet for her behavior. We agree with the District Court that there is no evidence in the record supporting Genet’s allegation that Judge Manley violated either Rule 2.12 or Rule 2.13. Genet did not file an affidavit alleging bias or prejudice or otherwise comply with § 3-1-805, MCA. Section 3-1-805, MCA, sets forth a procedure which must be followed when a party believes the presiding judge cannot be fair and impartial in the proceeding. The procedure is designed to provide due process to the aggrieved litigant in a proceeding in which the judge is presumptively fair and impartial. The requirement of an affidavit is therefore not dispensable. We conclude the District Court did not err by denying Genet’s motion to recuse. 14 ¶24 3. Whether the District Court erred by sanctioning Genet. ¶25 Genet argues the District Court erred by sanctioning her for violating Rule 11 because it was “fundamentally unfair” and her motion to recuse was “well grounded in fact and law.” “By presenting to the court a pleading, written motion, or other paper . . . an attorney or unrepresented party certifies to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation” and “(3) the factual contentions have evidentiary support.” M. R. Civ. P. 11(b). “If after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney . . . responsible for the violation.” M. R. Civ. P. 11(c)(1). The court may do this on motion or its own initiative. M. R. Civ. P. 11(c)(2)-(3). ¶26 It is apparent from the record that the District Court grew increasingly burdened and frustrated by Timothy and Genet’s behavior. The court warned the parties well before eventually finding Genet in violation of Rule 11 and sanctioning her. The court demonstrated leniency and tolerance, while also urging Timothy and Genet to retain competent counsel. In an order issued February 4, 2015, the court summarized some of the burdens Genet and Timothy’s tactics were placing on it at the time: January 7, 2015, Genet McCann caused to be filed a Rule 12(b)(2) Motion to Dismiss Application for TRO and Preliminary Injunction. Both appear to be copies, not originals. Neither contained a Certificate of Service. She apparently intended to file these on her own behalf, as a party, although at 15 the time she was both denying she is a party, and counsel of record for Timothy McCann, who is a party and her brother. Thereafter, on January 12, 2015, Timothy McCann, who by this time was contending he was pro se, filed an “Amended Certificate of Service to [Genet’s] Motion to Quash Application for TRO and Preliminary Injunction” (though not for Genet’s Motion to Dismiss). He may have believed he was acting as Genet’s attorney. On January 13, 2015, Genet filed an “Amended Certificate of Service” for her Rule 12(b) Motion to Dismiss. She did not file an Amended Certificate of Service relating to her defective Motion to Quash. Perhaps she believed Tim had done so as her attorney the day before. Simultaneously with these filings, Genet and Tim were filing defective and amended pleadings, (some copies and some originals) for the apparent purpose of asking leave for Genet to withdraw as Tim’s attorney (without actually asking for leave). This frivolous, frothful filing practice is not new. It is a pattern. The Court and parties have had to spend inordinate time on this. [A.M.M.’s] estate is incurring inordinate legal expenses as a result. Tim and Genet have declined to get competent counsel, in favor of this kind of practice. The court sanctioned Genet on June 24, 2015, based on her May 22, 2015, motion to recuse. In that pleading, Genet repeated accusations that Wold was filing frivolous motions, Judge Manley was biased, and added a new accusation that Guardian committed crimes without providing evidence or providing evidence that she had conducted a reasonable inquiry. The court concluded Genet violated Rule 11 for these reasons. Its conclusion is not clearly erroneous. The District Court did not err by sanctioning Genet. CONCLUSION ¶27 The District Court did not abuse its discretion by granting Guardian’s motion for a preliminary injunction and did not err by approving the Co-Conservator’s first annual accounting, by denying Genet’s motion to recuse, or by sanctioning Genet. 16 ¶28 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ PATRICIA COTTER /S/ JIM RICE

August 23, 2016

859bcfdd-7b5d-4362-b7a6-5d4a5e800d45

Skattum v. Motl

2016 MT 208N

DA 16-0086

Montana

Montana Supreme Court

DA 16-0086 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 208N STATE OF MONTANA, ex rel., DAN SKATTUM, Plaintiff and Appellant, v. JONATHAN MOTL, Montana Commissioner of Political Practices; M + R STRAGEGIC SERVICES; and C.B. PEARSON, Individually and as an agent of M + R STRATEGIC SERVICES, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. ADV 14-739 Honorable Mike Menahan, Presiding Judge COUNSEL OF RECORD: For Appellant: Michael P. Sinks, Wittich Ogburn, P.C., Bozeman, Montana Chris J. Gallus, Attorney at Law, Helena, Montana For Appellees: Jaime MacNaughton, Office of the Commissioner of Political Practices, Helena, Montana Submitted on Briefs: July 27, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 16-0086 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 This appeal arises from the District Court’s denial of Dan Skattum’s (Skattum) motion to amend his complaint. Skattum argues the District Court applied the wrong standard when it denied the motion to amend, and under the correct standard, the motion should have been granted. ¶3 A district court’s ruling on a motion to amend the pleadings is reviewed for an abuse of discretion. Stipe v. First Interstate Bank-Polson, 2008 MT 239, ¶ 10, 344 Mont. 435, 188 P.3d 1063. A party may amend its pleadings only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. M. R. Civ. P. 15(a)(2). “[T]his Court has previously determined that leave to amend is properly denied when the amendment is futile or legally insufficient to support the requested relief.” Hickey v. Baker School Dist. No. 12, et al., 2002 MT 322, ¶ 33, 313 Mont. 162, 60 P.3d 966 (citation omitted). “[A]lthough the merits of a proposed amended claim are generally not to be considered by the court, the merits of a claim are to be considered if the claim is frivolous, meritless, or futile.” Hickey, ¶ 33. 3 ¶4 Jonathan Motl (Motl) is the Montana Commissioner of Political Practices (COPP). The COPP is authorized to investigate violations of Montana’s election laws and, in conjunction with county attorneys, is responsible for enforcing those elections laws. Sections 13-37-111 through -124, MCA. M+R Strategic Services, Inc. (M+R) is a New York corporation licensed to do business in Montana. C.B. Pearson (Pearson) is the senior vice president of M+R. Pearson provides expert services to M+R’s clients, including expert opinion and testimony on campaign issues related to direct mailing and voter persuasion. ¶5 At issue in this case are two contracts for services between the COPP and M+R. Under the first contract (2013 Contract), M+R agreed to provide expert witness services at a rate of $125 per hour, not to exceed a total of $5,000. M+R submitted invoices under the 2013 Contract totaling $4,500. Under the second contract (2014 Contract), M+R agreed to provide expert witness services at a rate of $200 per hour for depositions, testimony, and trial testimony, and $125 per hour for all other services. The total payment allowed under the 2014 Contract was capped at $6,000. Under the 2014 Contract, M+R submitted invoices totaling $12,770.49. ¶6 In his original complaint, Skattum sued the Defendants, alleging violations of the Montana False Claims Act. Skattum alleged M+R did not perform the work billed under the 2013 Contract. The Defendants moved for summary judgment on the issue. Before the District Court ruled on summary judgment, Skattum sought to amend his complaint to include allegations that the invoices submitted under the 2014 Contract constituted false 4 claims because they exceeded the total amount permissible under the 2014 Contract. The District Court issued an order granting summary judgment to the Defendants for claims under the 2013 Contract, and denying Skattum’s motion to amend the complaint to include claims under the 2014 Contract. Skattum appeals only the District Court’s denial of the motion to amend, arguing the District Court erred when it looked to the merits of amended complaint. ¶7 A person is liable to a government entity if he or she “knowingly presents or causes to be presented a false or fraudulent claim for payment or approval[.]” Section 17-8-403(1)(a), MCA. In its order denying the motion to amend, the District Court noted there was no specific allegation that M+R had not performed the work it submitted invoices for under the 2014 Contract. The District Court further noted all evidence indicated M+R performed the work for which they billed and were paid. The District Court concluded that Skattum’s motion to amend was futile because there was a complete absence of any evidence indicating M+R had presented a false claim for payment. ¶8 The District Court did not abuse its discretion when it examined the merits of Skattum’s proposed amended complaint. “[T]he merits of a claim are to be considered if the claim is frivolous, meritless, or futile.” Hickey, ¶ 33. Skattum offered no evidence, however speculative, of a violation of the Montana False Claims Act. As such, the District Court properly concluded any such amendment would be frivolous, meritless, or futile. 5 ¶9 We have determined to decide this case pursuant to Section 1, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. This appeal presents no constitutional issues, no issues of first impression, and does not establish new precedent or modify existing precedent. ¶10 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

August 23, 2016

64e5924a-961c-451b-ae7e-0ec24bcf4947

Wagner v. MSE Technology Applications, Inc.

2016 MT 215

DA 15-0448

Montana

Montana Supreme Court

DA 15-0448 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 215 CHRIS WAGNER, Plaintiff and Appellant, v. MSE TECHNOLOGY APPLICATIONS, INC. MSE INFRASTRUCTURE SERVICES, INC., BUTTE LOCAL DEVELOPMENT CORPORATION, and SHEA REALTORS, PLLC, Defendants and Appellees. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte-Silver Bow, Cause No. DV-10-298 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Todd A. Stubbs, Stubbs Law, P.C., Manhattan, Montana For Appellee MSE: Cynthia L. Walker, Emma R. Armstrong, Poore, Roth & Robinson, P.C., Butte, Montana For Appellee Butte Local Development Corporation: William M. O’Leary, Fleming & O’Leary, PLLP, Butte, Montana For Appellee Shea Realtors, PLLC: William T. Wagner, Garlington, Lohn & Robinson, PLLP, Missoula, Montana 08/30/2016 Case Number: DA 15-0448 2 Submitted on Briefs: June 8, 2016 Decided: August 30, 2016 Filed: __________________________________________ Clerk 3 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Chris Wagner appeals from the District Court’s dismissal of his claims at trial pursuant to M. R. Civ. P. 50. We affirm in part and reverse in part. ¶2 We restate the issues on appeal as follows: Issue 1: Did the District Court err in dismissing Wagner’s intentional interference claims against all defendants and granting them judgment as a matter of law pursuant to M. R. Civ. P. 50(a)? Issue 2: Did the District Court err in dismissing Wagner’s claims by granting Shea Realtors summary judgment, and judgment as a matter of law pursuant to M. R. Civ. P. 50(a)? FACTUAL AND PROCEDURAL BACKGROUND ¶3 In 2009 Wagner sought to buy land in Butte to establish a commercial nursery. He hired Shea Realtors as his agent in purchasing approximately sixty acres of land from the Montana Tech Foundation. Shea became the agent of both Wagner and the Foundation, and in November 2009 Wagner and the Foundation entered a buy-sell agreement under which Wagner would purchase the land. Shea agreed to not engage in negotiations with any other persons or to show the property while the buy-sell agreement was in place. The parties agreed to close the purchase on January 8, 2010. ¶4 Wagner inserted four contingencies into the buy-sell agreement with the Foundation. Those were that he would not be required to bore underneath adjacent railroad tracks for utility installation; that he not be required to use city water for irrigation; that he could subdivide the property; and that his business would meet zoning 4 requirements. There are numerous references in this case to an “easement” condition, but no such condition appears on the face of the buy-sell. ¶5 In December 2009 Wagner hired Gaston Engineering to advise him about the feasibility of subdividing the property and selling the majority of it to others. Gaston identified access as an issue and concluded that the only feasible access was an existing road that was on adjacent property owned by MSE. A Gaston representative spoke to MSE Vice President Tretheway about securing an easement for use of the existing road. Tretheway told Gaston that MSE “would not stand in the way” of Wagner’s purchase and would not “throw monkey wrenches” into the process. After additional investigation Gaston advised Wagner that it was feasible for him to subdivide the land into six parcels and to sell five of them. ¶6 MSE requested that Gaston provide more information about Wagner’s plans for the land. On January 5, 2010, Gaston responded with a simple “conceptual plan” that showed possible boundaries for dividing the land into six lots. The Foundation agreed to extend the closing date to January 29, 2010. Wagner waited to hear from MSE about an easement and testified that his several attempts to contact MSE about this were unsuccessful. The Foundation agreed to extend the closing date again, to February 15, 2010. ¶7 On January 29, 2010, representatives of the Butte Local Development Corporation (BLDC), the Foundation and MSE met to discuss the property. During the meeting, Mr. Kebe from MSE called Shea to ask whether Wagner would be interested in purchasing a forty-seven-acre parcel owned by MSE adjacent to the land he was trying to buy from the 5 Foundation. At Shea’s request Wagner visited the property and then told Shea that he was not interested in it. While the forty-seven-acre parcel contained the existing road that Wagner needed for access to the sixty acres, Wagner never knew this and never obtained an easement from MSE. ¶8 On February 9, 2010, the same persons who were at the January 29 meeting met again to work out an agreement for BLDC to buy the sixty acres from the Foundation and for MSE to provide the necessary easements. On or after February 11, 2010, Shea began working to implement BLDC’s purchase of the sixty acres from the Foundation. Wagner knew nothing about the January 29 or February 9 meetings and knew nothing about Shea’s involvement. Shea claimed at trial that on or about February 11 Wagner told him he was no longer interested in buying the sixty acres. Wagner denied saying that. ¶9 The February 15, 2010 closing date on the Wagner-Foundation buy-sell agreement passed and Wagner did not close. On February 26, 2010, BLDC purchased the land from the Foundation for the same price contained in the buy-sell with Wagner, and MSE granted easements over its land to BLDC. ¶10 In July 2010 Wagner sued the MSE entities and BLDC, contending that they had improperly interfered with his attempt to purchase the sixty acres from the Foundation. Wagner later amended the complaint to add Shea Realtors as a defendant. The case stagnated and Wagner could not get the District Court to issue a scheduling order or to rule on pending motions. In May 2014 Wagner applied to this Court for a writ of supervisory control. This Court granted relief, ordering the District Court to rule on pending motions and to issue a scheduling order, including a trial date. After the District 6 Court’s rulings on motions and two more amendments to the complaint, Wagner’s claims were distilled to intentional interference with his prospective economic advantage against all defendants; constructive fraud against Shea and MSE; professional negligence against Shea; breach of contract against Shea; and breach of the covenant of good faith and fair dealing against Shea. Prior to trial the District Court granted partial summary judgment against Wagner by dismissing the professional negligence claim against Shea because Wagner did not have an expert to establish the standard of care for a realtor. ¶11 The case went to jury trial on the remaining claims in June 2015, and Wagner presented his case-in-chief over four days. Witnesses who testified included defendant Shea; Mike Johnson, former president of the Foundation; Jeremy Olson from Gaston Engineering; Mr. Tretheway, former vice president of MSE; Jim Smitham, executive director of BLDC; William Kebe, a member of the board of directors of both MSE and BLDC; and Chris Wagner. At the close of Wagner’s case the District Court granted the defendants’ M. R. Civ. P. 50 motions for judgment as a matter of law in their favor. ¶12 The District Court concluded that Wagner had not presented sufficient evidence to allow the jury to reasonably find facts that would support a verdict against any of the defendants. The District Court found that Wagner failed to present any evidence that any of the defendants prevented him from purchasing the land from the Foundation. To the contrary the District Court noted Wagner’s own testimony that he was free to purchase the Foundation land up to the final closing date (February 15, 2010), and that none of the defendants prohibited him from doing so. The District Court determined that Wagner 7 presented insufficient evidence that any of the defendants intentionally interfered with his prospective economic advantage and that the claims for tortious interference must fail.1 ¶13 As to the breach of contract claim against Shea, the District Court found that while Shea moved on to become the dual realtor in the BLDC-Foundation transaction for the same land, this did not occur until after Wagner’s buy-sell with the Foundation expired. The District Court also concluded that Wagner had failed to present sufficient evidence that he was actually damaged and that the defendants were entitled to judgment as a matter of law on that ground alone. ¶14 Wagner appeals. STANDARD OF REVIEW ¶15 This Court reviews a district court’s M. R. Civ. P. 50 decision granting or denying judgment de novo, as an issue of law, without special deference to the views of the trial court. Johnson v. Costco Wholesale, 2007 MT 43, ¶ 18, 336 Mont. 105, 152 P.3d 727. A district court should grant judgment as a matter of law only where there is a complete lack of any evidence which would justify submitting an issue to the jury, considering all evidence and any legitimate inferences that might be drawn from it in a light most favorable to the opposing party. Deonier & Assoc. v. Paul Revere Life Ins. Co., 2004 MT 297, ¶ 18, 323 Mont. 387, 101 P.3d 742. 1 The District Court also found that Wagner failed to present sufficient evidence that any defendant misrepresented any fact to him that was material to the land purchase agreement with the Foundation. Absent a misrepresentation of material fact, the District Court determined that Wagner’s claims for constructive fraud and negligent misrepresentation failed. Wagner did not appeal that decision. 8 ¶16 This Court reviews a district court’s decision on summary judgment to determine whether it is correct, using the same criteria under M. R. Civ. P. 56. Pilgeram v. GreenPoint Mortgage, 2013 MT 354, ¶ 9, 373 Mont. 1, 313 P.3d 839. The district court must apply the facts in a way most favorable to the opposing party, and may not grant summary judgment if there are genuine issues of material fact. Pilgeram, ¶ 12. DISCUSSION ¶17 Issue 1: Did the District Court err in dismissing Wagner’s intentional interference claims against all defendants and granting them judgment as a matter of law pursuant to M. R. Civ. P. 50(a)? ¶18 Montana Rule of Civil Procedure 50(a) provides: (1) If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may: (A) resolve the issue against the party; and (B) grant a motion for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue. A district court should grant judgment as a matter of law under Rule 50(a) only where there is a complete lack of any evidence which would justify submitting an issue to the jury, considering all evidence and any legitimate inferences that might be drawn from it in a light most favorable to the opposing party. Deonier, ¶ 18. In this case the defendants invoked Rule 50(a) at the close of Wagner’s presentation of his evidence, and the District Court granted judgment against Wagner on all his claims. The issue is whether Wagner presented sufficient evidence of his claims to warrant allowing the jury to determine the case. 9 ¶19 Wagner first claims on appeal that all the defendants should have been held liable to him for intentionally interfering with his prospective economic advantage. This Court has recognized the tort of intentional interference with contractual or business relations under the Restatement (Second) of Torts. In Bolz v. Meyers, 200 Mont. 286, 292-93, 651 P.2d 606, 609 (1982), we adopted the language of the Restatement describing this tort: One who intentionally and improperly interferes with the performance of a contract (except a contract to marry) between another and a third person, by preventing the other from performing the contract or causing his performance to be more expensive and burdensome is subject to liability to the other for the pecuniary loss resulting to him. Restatement (Second) of Torts 766A (1977). This tort may be maintained only against a person who is a stranger to the contractual or business relationship at issue. Bolz, 200 Mont. at 293, 651 P.2d at 610. Establishing a prima facie claim requires evidence that the defendant’s acts were intentional and willful; that they were calculated to cause damage to the plaintiff or the plaintiff’s business; that they were done with the unlawful purpose of causing damage or loss without right or justifiable cause; and that damage resulted. Bolz, 200 Mont. at 295, 651 P.2d at 611; Emmerson v. Walker, 2010 MT 167, ¶ 23, 357 Mont. 166, 236 P.3d 598. ¶20 In this case the contract or relationship at issue is Wagner’s buy-sell agreement with the Foundation for purchase of the sixty acres of land. The issue is whether Wagner presented sufficient proof for a jury to find that any of the defendants prevented him from completing his buy-sell agreement with the Foundation. The evidence presented at trial during Wagner’s case-in-chief directly contradicted his premise. As the District Court 10 noted, Wagner himself testified that no party had prevented him from following through with the purchase of the property and that he could have done so up to the final extended closing date of February 15, 2010. Wagner however chose not to complete the purchase, apparently based upon the contingencies that he inserted into the agreement. ¶21 In Emmerson this Court upheld a district court’s decision that a third party committed the tort of intentional interference with a property exchange agreement. In that case, the third party decided that he needed to frustrate the exchange agreement to obtain property that he desired. The defendant set about to entice one of the parties to repudiate the agreement; offered the party substantially more money to repudiate the agreement; connived to obtain legal advice for the party that would support his position and ultimately filed a legal action seeking to invalidate the agreement. These actions were improper and were sufficient to establish the tort of intentional interference. Emmerson, ¶ 25. Nothing in the present case rises to the level of interference seen in Emmerson. ¶22 Wagner waited for MSE to come to him with an offer of an easement, while acknowledging in testimony that he had no right to an easement from MSE and had no contract with MSE for an easement. While Wagner’s testimony established that he believed that his purchase depended upon getting an easement from MSE, he did very little to seek an easement and did not list obtaining an easement from MSE as a contingency of the buy-sell. Wagner relies heavily upon a statement that MSE made to Gaston that MSE would not stand in the way of the project and would not “monkey wrench” it. While these statements may have encouraged Wagner in his project, they fall 11 far short of imposing a legal obligation upon MSE to do anything at all, and certainly do not support a claim that MSE had an obligation to take affirmative steps to provide an easement across its property. An agreement to transfer an interest in real property must be in writing, signed by the party to be charged with the obligation. Section 28-2-903(1)(d), MCA; Hinebauch v. McRae, 2011 MT 270, ¶ 21, 362 Mont. 358, 264 P.3d 1098. ¶23 The District Court met the high standards required to grant a Rule 50 motion. Based upon the evidence presented at trial, the District Court correctly granted judgment for all defendants on Wagner’s claim for intentional interference with the buy-sell contract with the Foundation. ¶24 Issue 2: Did the District Court err in dismissing Wagner’s claims by granting Shea Realtors summary judgment, and judgment as a matter of law pursuant to M. R. Civ. P. 50(a)? ¶25 Initially Wagner argues that the District Court improperly granted pre-trial summary judgment to defendant Shea on Wagner’s claim of professional negligence. Shea moved for summary judgment after Wagner announced that he did not intend to call an expert witness to support his claim of professional negligence. Wagner argued that he did not need to present an expert on the professional negligence claim because a realtor’s duties under Montana law are specifically set out in § 37-51-313, MCA. The District Court concluded that while a realtor’s duties may be defined by statute, expert testimony is still required to show a breach of those duties because the “practice of real estate professionals, and the manner in which they communicate with and act on behalf of their clients are matters beyond the common experience of ordinary lay jurors.” 12 ¶26 Wagner’s Third Amended Complaint alleged claims against Shea. Wagner alleged that Gary Shea acted as a dual agent for him and for the Foundation in Wagner’s attempt to purchase the property, and that Shea simultaneously acted as dual agent for the Foundation and for the BLDC in its attempt to buy the same land. Wagner alleged that after he entered the buy-sell agreement with the Foundation and developed a conceptual plan for the property, Shea changed allegiances to break up the agreement. Finally Wagner alleged that Shea’s acting simultaneously as his agent as well as the agent for the BLDC constituted a conflict of interest and that Shea withheld and failed to communicate information about BLDC’s plan to purchase the land. Wagner alleged that Shea’s actions and his failure to communicate information interfered with his effort to obtain an easement from MSE. Wagner alleged that Shea breached his professional duty to protect his interests in the attempt to purchase the land from the Foundation and that Shea’s actions were a direct cause of damages including emotional distress, lost profits, and costs. ¶27 At the time that the District Court granted summary judgment against Wagner on the professional negligence claim, it should have been clear that there were genuine issues of material fact as to the allegations of negligence against Shea. The fundamental factual issues of what Gary Shea knew about the BLDC transaction; of when he knew of that transaction; and of the extent to which he participated in that transaction were all in dispute. Summary judgment is not appropriate if there are genuine issues of material fact concerning the dispute. Pilgeram, ¶ 12. 13 ¶28 Further, as a general rule a plaintiff must support a claim of professional negligence with expert testimony as to the professional’s duty and as to breach of that duty. May v. ERA Landmark, 2000 MT 299, ¶ 66, 302 Mont. 326, 15 P.3d 1179. However, if the determination of professional negligence involves issues “easily within the common experience and knowledge of lay jurors,” expert testimony may not be necessary. Dulaney v. State Farm Fire and Cas., 2014 MT 127, ¶ 14, 375 Mont. 117, 324 P.3d 1211; M. R. Evid. 702. As to real estate professionals, Montana law specifies in detail “the duties [that] govern the relationships between brokers and salespersons and buyers or sellers and are intended to replace the duties of agents as provided elsewhere in state law and replace the common law as applied to these relationships.” Section 37-51-313(1), MCA (emphasis added). Additionally § 37-51-102, MCA, provides extensive and detailed definitions of the various relationships in real estate transactions. ¶29 Shea’s duties to Wagner were therefore provided by statute and expert testimony may not have been necessary to establish those duties. Zuazua v. Tibbles, 2006 MT 342, ¶ 16, 335 Mont. 181, 150 P.3d 361. However, even if Shea’s duties were established by statute, expert testimony may be required to explain to a jury whether or not Shea breached that duty. As this Court has noted, § 37-51-313, MCA, is “not a model of clarity.” Zuazua, ¶ 14. Nevertheless, in that case we answered questions posed by the United States District Court by analyzing the facts and applying the statute to determine the real estate professional’s duties without making reference to any need for expert testimony. Zuazua, ¶ 4. 14 ¶30 In summary, when a plaintiff makes a claim of professional negligence against a real estate professional, expert testimony may or may not be required to explain the applicable statutory duty and whether that duty was breached. It is the responsibility of the district court to analyze the claims and the evidence in each case to determine the extent to which expert testimony may be required. It was error for the District Court in this case to grant summary judgment to Shea solely because there was a claim of professional negligence. ¶31 Wagner secondly argues on appeal that the District Court’s M. R. Civ. P. 50 order was error, asserting that his claims of breach of contract and breach of the covenant of good faith and fair dealing against Shea Realtors should have gone to the jury. The parties agree that Shea acted as realtor for both Wagner and the Foundation for purposes of buying the property from the Foundation. Shea and Wagner each signed a document entitled “Relationships/Consents in Real Estate Transactions,” dated November 11, 2009. This is clearly a contract, § 28-2-102, MCA, Chipman v. Northwest Healthcare Corp., 2014 MT 15, ¶ 15, 373 Mont. 360, 317 P.3d 182, that binds Shea to a number of obligations as to Wagner. Those include the obligation to act “solely in the best interests of the buyer”; the obligation to not represent other buyers without Wagner’s written consent; the obligation to “disclose all relevant and material information” about the transaction; and the obligation to “exercise reasonable care, skill, and diligence in pursuing the buyer’s objectives.” ¶32 Wagner presented sufficient evidence at trial that Shea may have acted contrary to Wagner’s interests based upon his involvement in and knowledge of the sale of the 15 property to BLDC. Wagner presented sufficient evidence at trial that Shea may have acted contrary to Wagner’s interests and may have violated his disclosure obligation by holding undisclosed information about a potential sale of the property to BLDC. These were questions that, at the close of Wagner’s evidence, were sufficient to be presented to the jury. ¶33 Wagner also contends that Shea violated the covenant of good faith and fair dealing that is implied into “every contract, regardless of type” under Montana law. Phelps v. Frampton, 2007 MT 263, ¶ 29, 339 Mont. 330, 170 P.3d 474. This covenant requires that the parties deal with each other in good faith without any attempt to deprive the other party of the benefits of the contract through dishonesty or abuse of discretion. Phelps, ¶ 29. ¶34 Wagner’s trial testimony was somewhat equivocal in that he appeared to vouch for Shea’s honesty and performance, but he still testified that there came a point in their relationship when Shea became unresponsive to his communications. If the jury inferred from the evidence that Shea was actually working on the sale of the property to BLDC while the Foundation’s sale to Wagner was still pending, it could have found, based upon evidence presented in Wagner’s case-in-chief, that Shea violated the covenant of good faith and fair dealing. ¶35 Wagner next argues that the District Court dismissed his claims based upon an improper finding that Wagner “failed to offer sufficient evidence” that he sustained actual damages. As noted above, the standard to be applied in a Rule 50 motion is whether there was a complete absence of any evidence on damages. It is clear that Wagner 16 presented some evidence of damages. He testified that he paid Gaston Engineering $6,937 for work on the project; that he had to buy another parcel of land at a higher cost per acre; and that he lost between $300,000 and $350,000 because he was unable to purchase the land from the Foundation. This was clearly some evidence of damages and was sufficient to withstand the motions for a judgment as a matter of law. Casiano v. Greenway, 2002 MT 93, ¶¶ 32-33, 309 Mont. 358, 47 P.3d 432. ¶36 We emphasize that the sole issue on appeal under M.R. Civ. P. 50 is whether there was a “complete lack of any evidence which would justify submitting [Wagner’s claims against Shea] to the jury.” Deonier, ¶ 18 (emphasis added). We are not called upon to determine whether Wagner should ultimately prevail on his claims after a full trial, and we express no view on whether Wagner can or should ultimately prevail in his claims against Shea. CONCLUSION ¶37 We affirm the District Court’s decision granting judgment as a matter of law to MSE Technology Applications, MSE Infrastructure Services, and Butte Local Development Corporation. We reverse the District Court’s decisions granting summary judgment to Shea Realtors and granting Shea’s motion for judgment as a matter of law pursuant to M. R. Civ. P. 50. ¶38 Affirmed in part, reversed in part, and remanded for further proceedings consistent with this Opinion. /S/ MIKE McGRATH 17 We Concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE

August 30, 2016

bf940d6a-1bd7-4b9b-af6e-cba794a662fa

Wrzesien v. Mont. Pub. Employee Ret. Admin.

2016 MT 242

DA 15-0554

Montana

Montana Supreme Court

DA 15-0554 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 242 EDWARD D. WRZESIEN and LACEY VAN GRINSVEN, individually and on behalf of all similarly situated persons, and MEGAN ASHTON, individually, Plaintiffs and Appellants, v. STATE OF MONTANA, and MONTANA PUBLIC EMPLOYEE RETIREMENT ADMINISTRATION, Defendants and Appellees. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. DDV 2012-931 Honorable James P. Reynolds, Presiding Judge COUNSEL OF RECORD: For Appellant: Travis Dye, Kalkstein, Johnson & Dye, PC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, J. Stuart Segrest, Assistant Attorney General, Helena, Montana Submitted on Briefs: July 20, 2016 Decided: September 28, 2016 Filed: __________________________________________ Clerk 09/28/2016 Case Number: DA 15-0554 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Edward Wrzesien, Lacey Van Grinsven, and Megan Ashton (collectively, “Participants”) appeal an order of the First Judicial District Court, Lewis and Clark County, granting summary judgment to the State of Montana and Montana Public Employee Retirement Administration (collectively, “State”) on the grounds that: (1) participants in the Defined Benefit Retirement Plan (DB Plan), Defined Contribution Retirement Plan (DC Plan), and Montana University System Retirement Plan (University Plan) are not members of similarly situated classes under an equal protection analysis; and (2) employer contributions to the trust that funds the retirement benefits of all DB Plan participants (DB Trust) that are calculated based on the salaries of DC and University Plan participants do not violate substantive due process. We address: 1. Whether the District Court correctly concluded that DB Plan, DC Plan, and University Plan participants are not members of similarly situated classes. 2. Whether the District Court correctly concluded that employer contributions to the DB Trust that are calculated based on the salaries of DC Plan and University Plan participants do not violate substantive due process. ¶2 We affirm. PROCEDURAL AND FACTUAL BACKGROUND ¶3 This case concerns three retirement plans established by the Montana Legislature under the Montana Public Employee Retirement System (PERS). All eligible state employees must participate in a PERS retirement plan. For most employees, this means choosing between the DB and DC Plans. Eligible employees of the Montana University System also have a third option: the University Plan. All covered employees participate 3 in the DB Plan unless, within one year of hire, they elect to join the DC Plan or, if applicable, the University Plan. Sections 19-3-401(1), -2111(1), -2112(2), MCA. An employee’s decision to participate in the DC or University Plan, or to remain in the default DB Plan, is irrevocable. Sections 19-3-2111(2)(c), -2112(2)(d), MCA. ¶4 All employees contribute 7.9 percent1 of their earnings to their respective retirement plan. Section 19-3-315(1), MCA. Under the DB Plan, each employee’s contribution goes to the DB Trust. Sections 19-2-501, -3-315(1)(a), MCA. By contrast, under the DC and University Plans, each employee’s contribution goes into an individual account, which the employee chooses how to invest. See §§ 19-3-315, -2102, -2122, 19-21-214, MCA. ¶5 State employers are required to contribute an amount equal to 8.17 percent2 of each employee’s earnings to the retirement system, regardless of which retirement plan the employee chooses. Section 19-3-316(1), (3) MCA. For DB Plan participants, the majority of this contribution goes to the DB Trust. Sections 19-3-108(5), -316, MCA. After meeting age and service requirements, DB Plan participants may withdraw a statutorily-prescribed benefit from the trust. Sections 19-3-901 through -904, MCA. For DC Plan participants, the employer contribution is allocated between the participant’s individual account and several other funds, including the DB Trust. Section 19-3-2117(2), MCA. The portion of the DC Plan employer contribution that goes to the 1 The Montana Public Employees’ Retirement Board annually reviews this contribution amount and recommends adjustments to the Montana Legislature; thus, this percentage is subject to change. Section 19-3-315(1), MCA. 2 This amount is subject to change. See § 19-3-316(4), MCA. 4 DB Trust is called the “Plan Choice Rate,” and is calculated to ensure that the DB Trust is actuarially sound. Section 19-2-303(38), MCA. A DC Plan participant’s retirement benefit consists of the accumulated funds in his or her individual account, along with any investment gain or loss. Section 19-3-2116, MCA. DC Plan participants are not entitled to any payments from the DB Trust. See § 19-3-909, MCA. University Plan employee and employer contributions are allocated in a similar, though not identical, manner to the DC Plan. See §§ 19-21-101 through -214, MCA. Because it has no effect on our legal analysis, for purposes of this Opinion, the DC and University Plans will be treated as though they were administered in the same way. ¶6 Participants all elected to participate in the DC and University Plans. In October 2012, Participants filed a complaint alleging that they are treated unequally from similarly-situated DB Plan participants, violating the equal protection clause of the Montana Constitution. Participants also alleged that requiring the State employers of DC and University Plan participants to contribute to the DB Trust violates Participants’ substantive due process rights. The parties cross-filed motions for summary judgment, and the District Court granted summary judgment to the State, concluding that the statutes creating the DC and University Plans did not violate equal protection or substantive due process. The District Court reached this decision by concluding that the classes at issue—members of the three retirement plans—were not similarly situated, that maintaining the actuarial soundness of the DB Trust is a legitimate governmental purpose, and that Participants were never entitled to the money allocated to the DB Trust. Participants appealed. 5 STANDARDS OF REVIEW ¶7 “We review summary judgment rulings de novo, applying the criteria set forth in M. R. Civ. P. 56.” Mont. Cannabis Indus. Ass’n v. State, 2016 MT 44, ¶ 11, 382 Mont. 256, 368 P.3d 1131. “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.” Arnone v. City of Bozeman, 2016 MT 184, ¶ 4, 384 Mont. 250, 376 P.3d 786 (citing M. R. Civ. P. 56(c)(3)). We exercise plenary review of constitutional issues. Mont. Cannabis Indus. Ass’n, ¶ 12. DISCUSSION ¶8 1. Whether the District Court correctly concluded that DB Plan, DC Plan, and University Plan participants are not members of similarly situated classes. ¶9 Under the equal protection clause of the Montana Constitution, “[n]o person shall be denied the equal protection of the laws.” Mont. Const. art. II, § 4. However, “[a] statute does not violate the right to equal protection simply because it benefits a particular class.” Bean v. State, 2008 MT 67, ¶ 13, 342 Mont. 85, 179 P.3d 524. Rather, “[e]qual protection provides a check on governmental action that treats similarly situated persons in an unlike manner.” Caldwell v. MACo Workers’ Comp. Trust, 2011 MT 162, ¶ 14, 361 Mont. 140, 256 P.3d 923. “Consequently, when addressing an equal protection challenge, this Court must first identify the classes involved and determine whether they are similarly situated.” Powell v. State Comp. Ins. Fund, 2000 MT 321, ¶ 22, 302 Mont. 518, 15 P.3d 877. 6 ¶10 In reaching its conclusion that DB, DC, and University Plan participants are not similarly situated, the District Court cited Bean and Gulbrandson v. Carey, 272 Mont. 494, 901 P.2d 573 (1995). In Bean and Gulbrandson, we held that laws giving different retirement benefits to employees based on their date of hire or date of retirement did not violate equal protection. Although the employees performed the same duties, faced the same job hazards, and worked in the same positions regardless of when they were hired, the challenged laws created two dissimilar classes and operated equally with respect to all members within each class. See Bean, ¶¶ 17, 20; Gulbrandson, 272 Mont. at 504, 901 P.2d at 580. ¶11 Here, the Legislature chose to give State employees an option in choosing how their retirement benefit will be calculated and invested. Pursuant to § 19-3-904, MCA, a DB Plan participant’s benefit is calculated based on the participant’s highest average compensation and length of service or the participant’s accumulated contributions to the DB Trust. The statute does not provide for a retirement benefit based on the employer’s contributions to the DB Trust. If a DB Plan participant leaves state employment after his or her retirement benefit vests, the participant may immediately withdraw an amount equal to his or her contribution to the DB Trust, but may not withdraw any employer contribution. See § 19-2-602, MCA. By contrast, if a DC or University Plan participant leaves state employment after his or her retirement benefit vests, the participant may immediately withdraw the employer contribution in addition to his or her own contribution. Sections 19-3-2116, -2123, MCA. Unlike DB Plan participants, DC and University Plan participants may choose how to invest their retirement funds. As a 7 trade-off, employers do not contribute as much to a DC Plan participant’s individual account as they contribute to the DB Trust for DB Plan participants. ¶12 As the District Court recognized, the Legislature created dissimilar classes: “risk-averse state employees who wish to forego any potential investment gain in favor of a known, guaranteed retirement benefit, and risk-accepting state employees who wish to maintain control over how their retirement funds are invested.” Participants are not statutorily precluded from participating in either plan. Rather, while the State provides options, employees make the choice and create the dissimilar classifications. As in Bean and Gulbrandson, DC, DB, and University Plan participants are not similarly situated. Participants’ ability to choose which dissimilar class they would like to join does not violate their equal protection rights. See Bean, ¶ 13 (“An equal protection challenge fails if the groups at issue do not constitute similarly situated classes.”). ¶13 2. Whether the District Court correctly concluded that employer contributions to the DB Trust that are calculated based on the salaries of DC Plan and University Plan participants do not violate substantive due process. ¶14 Pursuant to Article II, Section 17 of the Montana Constitution, “[n]o person shall be denied life, liberty, or property without due process of law.” Substantive due process requires that statutes enacted by the Legislature be reasonably related to legitimate state interests. Powell, ¶ 29. Article VIII, Section 15 of the Montana Constitution requires that “[p]ublic retirement systems shall be funded on an actuarially sound basis.” The Legislature created the Plan Choice Rate “to actuarially fund the unfunded liabilities and the normal cost rate changes in a defined benefit plan resulting from member selection of the defined contribution plan.” Section 19-2-303(38), MCA. The District Court 8 determined that the Plan Choice Rate was reasonably related to the legitimate state interest of keeping the retirement system actuarially sound because DC and University Plan participants do not contribute to the DB Trust and therefore, absent the Plan Choice Rate, “the amount the [DB Trust] fund takes in would be proportionally less than it was” before the DC and University Plans existed. ¶15 Participants agree that maintaining an actuarially sound DB Plan is a legitimate state interest, but contend that the Plan Choice Rate is not reasonably related to that interest because it directs a portion of DC Plan participants’ employer contributions to the DB Plan and thus “deprive[s] Montanans of their hard earned money for no consideration.” (Citing Hardy v. Progressive Specialty Ins. Co., 2003 MT 85, ¶ 37, 315 Mont. 107, 67 P.3d 892.) The District Court rejected this argument, finding that “DB [P]lan members only have an interest in the employer contribution insofar as it helps maintain the actuarial soundness of the fund that pays their retirement benefit.” In reaching this conclusion, the District Court found that Participants’ assertion that all PERS-eligible employees receive an employer-paid contribution equal to 8.17 percent of their respective salaries was incorrect. Under the DB Plan, rather than going to the employee, the majority of the employer contribution goes to the DB Trust. By contrast, under the DC and University Plans, a portion of the employer contribution goes directly into the employee’s individual account and a portion goes to various other funds, including the DB Trust. DC and University Plan participants were promised an employer contribution of 4.19 percent, not 8.17 percent. In exchange for a lower employer contribution, Participants have the flexibility to control their accounts. The State’s use of 9 their earnings for purposes of calculating employer contributions to the DB Trust is merely a variable for the calculation to maintain actuarial soundness of the DB Trust. Contrary to Participants’ argument, the State is not depriving DC and University Plan participants of their “hard earned money,” because the lower employer contribution is simply the result of the choice that DC and University Plan participants made in exchange for the flexibility to control their accounts and to have the employer contribution go directly into their accounts instead of a separate trust. As far as the employer contribution goes, DC and University Plan participants are getting precisely what they bargained for when they voluntarily chose those plans. Therefore, employer contributions to the DB Trust do not violate DC or University Plan participants’ substantive due process rights. CONCLUSION ¶16 We affirm the District Court’s Order. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ JIM RICE

September 28, 2016

1503f7b4-32dd-4036-aa41-c90ed13fc671

Sagami v. Johns

2016 MT 228N

DA 16-0092

Montana

Montana Supreme Court

DA 16-0092 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 228N TONY L. SAGAMI, Plaintiff and Appellee, v. KELLY JOHNS, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DV 13-387(A) Honorable Amy Eddy, Presiding Judge COUNSEL OF RECORD: For Appellant: Kelly Johns, Self-Represented, Kalispell, Montana For Appellee: Marybeth M. Sampsel, Paul Sullivan, Measure, Sampsel, Sullivan & O’Brien, P.C., Kalispell, Montana Submitted on Briefs: July 20, 2016 Decided: September 13, 2016 Filed: __________________________________________ Clerk 09/13/2016 Case Number: DA 16-0092 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 The marriage of Plaintiff Tony L. Sagami (Tony) and Defendant Kelly Johns (Kelly) was dissolved on August 22, 2008, in the Eleventh Judicial District Court by the Honorable Katherine R. Curtis. The decree of dissolution awarded Local Joe’s, LLC, a marital asset, to Kelly and Monocle Systems, LLC, also a marital asset, to Tony. The court directed that Monocle be sold to a long term employee, Ray Dominick (Ray), and assigned a value to the asset of $130,439.00. The decree provided that “[Kelly], with the cooperation of [Tony], should see to the terms and conditions of the sale and the management of Monocle pending the sale. [Tony] should be the recipient of the proceeds of the sale.” ¶3 Following the parties’ dissolution, Ray took over Tony’s role of primarily managing Monocle, while Kelly continued to pay the bills and take care of the finances, as she had previously done. On October 7, 2008, prior to the trial in the dissolution proceedings, Kelly wrote and signed a check from Monocle to Local Joe’s in the amount of $6,500. It is undisputed that Local Joe’s had written three checks totaling $9,500 to Monocle during 2008. Kelly represented that the $6,500 check from Monocle was only a 3 partial payment on the $9,500 loan from Local Joe’s to Monocle. The removal of these funds from Monocle rendered Monocle insolvent. ¶4 Kelly subsequently entered into a contract with Ray and signed a corresponding Bill of Sale which was to be effective December 20, 2008. The sale, however, did not take place because a data feed from another corporation, Advisor’s Square, and upon which Monocle relied to generate stock market information for its clients, was cut off on December 19, 2008. As a result, Tony filed a motion for contempt in 2011 in the underlying dissolution proceeding, Cause No. DR-07-392 (B), alleging that Kelly’s failure to sell Monocle was a violation of the decree. ¶5 On May 31, 2011, Judge Curtis conducted a hearing on Tony’s motion for contempt. Tony appeared with his attorney and testified. Kelly appeared pro se and also testified. At that time, Tony owed child support arrearages approaching $145,000. He asked that Kelly be held in contempt for failing to ensure the sale of Monocle and that the value attributed to Monocle in the decree of $130,439 be credited towards his child support arrearage. During the hearing, Tony explained that the $6,500 check Kelly wrote out of the Monocle account “essentially emptied out the entire working capital of that business, including the payroll taxes withholded [sic] for Ray Dominic, and so essentially Monocle had zero money to pay its bills, including payroll or to any of its vendors.” The $6,500 check was admitted into evidence and further testimony from Kelly explained that the check was a partial repayment of the $9,500 loan Local Joe’s had made to Monocle. During cross-examination by Tony’s counsel, Kelly explained to the court that she did 4 not disclose the $6,500 because, “I continued managing all of Monocle’s bills, paying employees and doing everything I had done always, bringing in deposits, paying the bills, issuing loans to it, returning the loans.” At the conclusion of the hearing, the court found that Kelly had done “everything within her power to sell Monocle” and that she managed Monocle for a year following the divorce without any cooperation from Tony. The court denied Tony’s motion for contempt. ¶6 In 2013, Tony, through counsel, filed a new cause of action against Kelly, DV-13-387 (A), alleging breach of fiduciary duty, constructive fraud and conversion related to Kelly’s issuance of the $6,500 check in 2008. Both parties filed motions for summary judgment. Kelly, appearing pro se, argued that res judicata applied to the Complaint because the issue regarding conversion of the $6,500 was raised in the contempt proceeding. In an order dated March 25, 2014, the Honorable Ted O. Lympus denied both parties’ motions for summary judgment without addressing Kelly’s argument of res judicata. ¶7 A bench trial was held two years later on January 28, 2016. The District Court, the Honorable Amy Eddy presiding, issued an order on January 29, 2016, concluding that Kelly had converted the $6,500 from Monocle to Local Joe’s to Tony’s detriment. The court found in Tony’s favor and awarded the amount of $6,500 plus 10% interest from the date of conversion, October 7, 2008. Prejudgment interest was $4,749.36, making the total judgment against Kelly $11,249.36. 5 ¶8 Kelly appeals, arguing that the issue of whether she wrongfully converted the $6,500 check was before Judge Curtis in 2011 and that Judge Curtis did not hold her in contempt. Tony does not dispute that Kelly is appealing from Judge Lympus’ March 25, 2014 order denying Kelly summary judgment and rejecting her argument that the proceeding was barred by res judicata. We thus consider whether conversion of the $6,500 was raised and considered by Judge Curtis in the contempt proceedings, rendering the current proceeding barred by res judicata. ¶9 A matter is barred by the doctrine of res judicata if four elements are met: (1) the parties or their privies are the same; (2) the subject matter of the present and past actions is the same; (3) the issues are the same and relate to the same subject matter; and (4) the capacities of the parties are the same as to the subject matter and issues between them. Baltrusch v. Baltrusch, 2006 MT 51, ¶¶ 15-16, 331 Mont. 281, 130 P.3d 1267; Wiser v. Mont. Bd. of Dentistry, 2011 MT 56, ¶ 9, 360 Mont. 1, 251 P.3d 675. Here, elements (1) and (4) are met as the parties are the same and their capacity in relation to the disputed $6,500 check are likewise the same. Further, element (2) is satisfied because the subject matter of both the contempt proceeding and the complaint for conversion addressed and considered the propriety of Kelly’s action in writing the $6,500 check from Monocle’s account. Finally, Tony argued in the contempt proceeding that Kelly failed to disclose and without lawful authority removed property belonging to Tony when she wrote the check for $6,500 from Monocle’s account. “The essential elements of an action for conversion are the plaintiff’s ownership and right of possession of the personalty, its 6 conversion by defendant, and resulting damages.” Gebhardt v. D.A. Davidson & Co., 203 Mont. 384, 389, 661 P.2d 855, 858 (1983). While contempt is a different action than conversion, it is undeniable that Tony alleged in the contempt proceeding that Kelly’s act in issuing the check was unlawful and constituted a basis for the court to conclude she was in violation of the decree. The court could have ordered Kelly to pay Tony the $6,500 had it concluded that she was in contempt of the decree of dissolution. See Marez v. Marshall, 2014 MT 333, ¶ 32, 377 Mont. 304, 340 P.3d 520 (quoting Milanovich v. Milanovich, 201 Mont. 332, 336, 655 P.2d 963, 965 (1982)) (“In family law cases, ‘the best remedy to [e]nsure respect for the law and the orderly progress of relations between family members split by dissolution is to give effect to the contempt powers of the District Court.’”). Accordingly, all elements of res judicata were satisfied and Judge Lympus incorrectly rejected Kelly’s argument that the action was barred by res judicata. We conclude that summary judgment should have been granted in Kelly’s favor. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for noncitable memorandum opinions. The issues in this case are legal and are controlled by settled Montana law, which the District Court incorrectly interpreted. The judgment of the District Court is reversed and the District Court is directed to enter summary judgment for Kelly and dismiss Tony’s complaint. /S/ LAURIE McKINNON 7 We Concur: /S/ BETH BAKER /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE

September 13, 2016

e6ed8199-c629-42cb-9767-6dd25d4c3e79

Matter of B.R. J.R. YINC

2016 MT 234N

DA 15-0512

Montana

Montana Supreme Court

DA 15-0512 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 234N IN THE MATTER OF: B.R. and J.R., Youths in Need of Care APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause Nos. ADN-12-150 and ADN-12-151 Honorable Gregory G. Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Scott Albers, Attorney at Law, Great Falls, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana John Parker, Cascade County Attorney, Valerie M. Winfield, Deputy County Attorney, Great Falls, Montana Allen P. Lanning, Lanning, Harris & Conklin, P.C., Great Falls, Montana (Attorney for Youths) Submitted on Briefs: June 22, 2016 Decided: September 20, 2016 Filed: __________________________________________ Clerk 09/20/2016 Case Number: DA 15-0512 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Ju.R. (Father) appeals the order of the Eighth Judicial District Court, Cascade County, terminating his parental rights to J.R. and B.R. (Children). The Children are enrolled members of the Chippewa Cree Tribe (Tribe), thus making them Indian children under the Indian Child Welfare Act (ICWA). We address whether the District Court’s Order is supported by evidence beyond a reasonable doubt that Father’s custody of the Children would likely result in serious emotional or physical damage to the Children.1 We affirm. ¶3 This case began in 2009, when the Department of Public Health and Human Services (Department) became involved with S.R. (Mother) and the Children. On December 23, 2009, Father stipulated to the Children being adjudicated youths in need of care and signed a treatment plan. On December 27, 2010, the District Court noted that “Father continues to state he does not want to do nor does he think he should have to do a treatment plan.” On December 8, 2011, the Department petitioned to terminate Father’s 1 In Father’s Reply Brief to this Court, he alleges that the District Court “terminate[d] his parental relationship with his children simply as a matter of retribution for a perceived insult to the Court’s authority.” Father fails to express what the “perceived insult” is, and fails to cite to the record or any legal authority in support of this allegation. We therefore decline to address it. 3 parental rights for failure to complete his treatment plan and abandonment. On March 1, 2012, the Department petitioned to terminate Mother’s parental rights for failure to complete her treatment plan. On March 8, 2012, the District Court granted Father’s motion to continue the termination hearing. On May 11, 2012, the District Court transferred jurisdiction of the matter to the Tribe, pursuant to ICWA. The Tribe returned the Children to Mother. ¶4 On October 1, 2012, the Department petitioned for emergency protective services, adjudication as youths in need of care, and temporary legal custody of the Children because Mother violated the Order of Protection she had against Father by taking the Children to Father’s residence, where Mother was arrested for assaulting Father. On February 20, 2013, the District Court held a Show Cause and Adjudicatory Hearing on the Department’s petition. The resulting order adjudicated the Children youths in need of care because it found, among other facts, that: (1) Father “violated the order of protection [on several occasions] because ‘they’re my family’”; (2) the Department effectuated emergency removal of the Children from Father’s residence after police were involved with a domestic disturbance between Father and Mother; (3) Father “ha[d] been very hostile and intimidating with [the Department] . . . threaten[ing] to ‘track [or hunt] down the kids’ at their foster home and stated he had previously been to the foster home”; and (4) Father failed to sign a form to allow the foster parents to provide out-of-town treatment for J.R.’s abscessed tooth. ¶5 In March of 2013, Father moved to dismiss the case and objected to the treatment plan, alleging the Department lacked evidence and even allegations of Father abusing or 4 neglecting the Children. On April 2, 2013, the District Court overruled Father’s motions and objections, stating in part that the record contains sufficient evidence showing Father’s “very clear anger, violence and paranoia.” In a June 28, 2013 Order, the District Court noted “the parents are making visits but that they are not cooperating on doing any other part of their treatment plans.” ¶6 On September 18, 2013, the Department petitioned to terminate Father’s and Mother’s parental rights for failure to complete the treatment plans. On January 3, 2014, the Department withdrew the petition, in order to give the parents an additional three months to work on the treatment plans, even though Father had yet to complete any portion of his treatment plan, except for occasionally visiting the Children. On April 25, 2014, the District Court granted the Department’s motion to extend temporary legal custody of the Children. ¶7 On June 6, 2014, the Department filed another petition to terminate Mother’s and Father’s parental rights. The Department attached an affidavit from the case’s Child Protective Specialist (CPS) to the petition. The CPS attested that family-based services had to stop for Father and Mother because they constantly missed visitations and, when visitations did occur, the environment was hostile, which also led to death threats from Father to the CPS. One CPS testified: “And [Father] said, I will [expletive omitted] hunt you down. I’ll [expletive omitted] kill you.” Two other CPSs were able to corroborate this testimony because Father was on speaker-phone. Father’s anger issues and failure to make his treatment plan a success, among other issues, led the District Court to terminate his parental rights. 5 ¶8 On July 28, 2014, the District Court held a termination hearing. On September 30, 2014, the District Court issued an order terminating Father’s and Mother’s parental rights. On October 28, 2014, Father’s counsel moved for a new trial for Father because Father allegedly was not afforded additional time required by ICWA to prepare for the termination hearing. The District Court granted a new trial, to be held on December 12, 2014. ¶9 On December 11, 2014, the District Court spoke with the Children in camera. The District Court held the termination hearing the next day and informed the parties that the Children stated they did not want to go home to their parents because they were scared to do so. The District Court then suspended the hearing to address a potential contradiction in testimony, in light of testimony from a collateral criminal matter involving Father. After resolving that issue, the District Court scheduled the termination hearing to continue. ¶10 On May 28, 2015, before the termination hearing resumed, another district court sentenced Father to the Department of Corrections for ten years, with five years suspended. On June 25, 2015, the termination hearing resumed. On July 13, 2015, the District Court entered its findings of fact, conclusions of law, and order, in which it concluded beyond a reasonable doubt that terminating Father’s parental rights, and keeping the Children in their current placement, best serves the Children’s interests. Father appeals. ¶11 We review a district court’s decision to terminate parental rights for abuse of discretion. In re K.B., 2013 MT 133, ¶ 18, 370 Mont. 254, 301 P.3d 836. In ICWA 6 cases, we will uphold the district court’s termination of parental rights if a reasonable fact-finder could conclude beyond a reasonable doubt that allowing the parent to continue with custody would likely “result in serious emotional or physical damage to the child.” K.B., ¶ 18. A district court abuses its discretion when it acts “arbitrarily, without employment of conscientious judgment or in excess of the bounds of reason, resulting in substantial injustice.” In re M.J., 2013 MT 60, ¶ 17, 369 Mont. 247, 296 P.3d 1197 (citation omitted). We review a district court’s factual findings for clear error. In re A.K., 2015 MT 116, ¶ 20, 379 Mont. 41, 347 P.3d 711. We review a district court’s conclusions of law for correctness. K.B., ¶ 18. ¶12 Title 25, Section 1912(f) of the U.S. Code provides: No termination of parental rights may be ordered in [a] proceeding [involving an Indian child] in the absence of a determination, supported by evidence beyond a reasonable doubt, including testimony of qualified expert witnesses that the continued custody of the child by the parent or Indian custodian is likely to result in serious emotional or physical damage to the child. The District Court terminated Father’s parental rights, finding “by proof beyond a reasonable doubt that continued custody of the [Children] by the parents is likely to result in serious emotional or physical damage to the children.” Notwithstanding the considerable evidence to support the District Court’s finding—as summarized above— Father contends the District Court erred because of alleged conflicting testimony given at the termination hearing. Father relies on the testimony of a Department employee, a forensic evaluator, a licensed clinical professional counselor, and a mental health professional. We consider the testimony of each of these witnesses in turn. 7 ¶13 The Department employee Father relies on was involved in this matter from May 6, 2013, to March 12, 2014. On January 22, 2014, she helped Father obtain an extension to complete his treatment plan because “[t]he children wanted to stay with their parents. They expressed that constantly.” The employee also testified to a number of other issues that were all unresolved at the time she stopped working on the case. Although the Department employee stated the Children wanted to stay with Father, those interactions with the Children contradict the District Court’s subsequent in camera interview with the Children, indicating the Children’s fear of Father made them not want to stay with Father. A mental health professional testified that the Children were “scared to go to [Father’s] house, to the parents’ house when [the Department was] not there.” Further, on January 16, 2014, the Guardian ad Litem reported to the District Court that the Children “have been out of their parental care and home for 47 months since 2009,” and the Children’s time with their foster parents “is the only period of time that the children have done well . . . .” ¶14 The forensic evaluator Father relies on completed a parenting evaluation of Father on February 1, 2014. The evaluation concluded that Father should “complete the State’s treatment plan that had been presented to him” and attend co-parenting counseling. At the hearing, the evaluator learned about Father’s pending criminal charges, which he was “very concerned about.” The evaluator further stated that he would also be concerned if Father “had not completed his treatment plan as recommended.” Father did not complete his treatment plan or apply its lessons to his home environment. 8 ¶15 While acknowledging that Father still loved Mother and the Children, the licensed clinical professional counselor upon whom Father relies testified that “[Father] was not open to individual therapy . . . [and] did not do the homework.” ¶16 The mental health professional upon whom Father relies testified, as noted above, that J.R. “did not seem very happy about visits at the parents’ home . . . [and] stated . . . he was scared to go to his house, to the parents’ house when [the Department was] not there.” Father’s cross-examination of this witness attempted to attribute all of the family’s parenting problems on Mother. However, when asked whether she would “approve of [Father] keeping his parental rights” as long as Mother is out of the picture, the mental health professional offered a qualified answer that such might be possible “under certain circumstances.” This qualified possibility was considered by the District Court along with the years of opportunities Father had to comply with his treatment plan, restraining orders he ignored, and parenting instruction he failed to implement. ¶17 The Department provided ample testimony from other witnesses to support the District Court’s determination that Father’s custody of the Children is likely to result in serious emotional or physical damage to the Children. The District Court correctly applied ICWA’s § 1912(f) criteria to its findings of fact, and the District Court correctly applied all the necessary Montana and ICWA criteria to hold, on multiple grounds, that Father’s parental rights had to be terminated. ¶18 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear 9 application of applicable standards of review. The District Court did not abuse its discretion in terminating Father’s rights. Substantial evidence beyond a reasonable doubt supported the District Court’s determination that Father’s custody of the Children is likely to result in serious emotional or physical damage to the Children. The District Court therefore did not abuse its discretion when terminating Father’s parental rights. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ PATRICIA COTTER /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ JIM RICE

September 20, 2016

f1567404-f8d1-430a-be7f-85eed1940bd8

State v. Krause

2016 MT 241N

DA 15-0700

Montana

Montana Supreme Court

DA 15-0700 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 241N STATE OF MONTANA, Plaintiff and Appellee, v. TERRY DUANE KRAUSE, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-11-319(B) Honorable Robert B Allison, Presiding Judge COUNSEL OF RECORD: For Appellant: Terry D. Krause, Self-Represented, Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Tammy A. Hinderman, Assistant Attorney General, Helena, Montana Ed Corrigan, Flathead County Attorney, Alison E. Howard, Deputy County Attorney, Kalispell, Montana Submitted on Briefs: August 17, 2016 Decided: September 27, 2016 Filed: __________________________________________ Clerk 09/27/2016 Case Number: DA 15-0700 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Terry Duane Krause appeals the order by the Eleventh Judicial District Court, Flathead County, denying his Petition for Remission of Fines, Costs and Restitution. We address whether the District Court abused its discretion when it denied Krause’s Petition for Remission of Fines, Costs and Restitution. We affirm. ¶3 On September 27, 2011, Krause was charged with one count of purposely or knowingly exploiting a developmentally disabled person in violation of § 52-3-825(3)(a), MCA. Krause convinced C.R., a mentally ill woman, to write checks for his medication. Krause told C.R. that if she wrote the checks, he would pay them off with his anticipated gambling winnings before the checks were deposited. C.R. believed Krause was paying off the checks as promised; however, collection agencies contacted C.R. after she wrote fifty-three nonsufficient funds checks totaling $3,688.83. ¶4 On June 21, 2012, Krause entered into a plea agreement with the State, whereby he agreed to plead guilty to the exploitation charge in exchange for the dismissal of a felony charge of issuing a bad check. On October 25, 2012, the District Court accepted Krause’s guilty plea and the State’s recommended deferred sentence for a period of six years, and ordered Krause to pay $3,688.83 in restitution to C.R. and an additional 3 $14,621.41 to victims in the dismissed matter. The District Court also ordered Krause to determine whether accrued Social Security Disability back pay totaling $6,412 could be reissued as partial payment of his restitution award, to which Krause agreed. On February 7, 2013, Krause’s probation officer filed a report of violation, alleging Krause failed to report to the Butte Probation and Parole Office after his sentencing hearing and never made any payments on his restitution obligations. On February 27, 2013, the State filed a petition to revoke Krause’s deferred imposition of sentence. Krause denied the allegations, but failed to appear for his revocation hearing. ¶5 On December 5, 2013, the District Court found that Krause violated the conditions of his deferred sentence, and committed Krause to the custody of the Department of Corrections for ten years with three years suspended. The suspended portion of Krause’s sentence imposed the same conditions as his deferred sentence. On January 15, 2014, the District Court issued the written revocation order, which Krause did not appeal. He later filed an application for sentence review, and the Sentence Review Division affirmed his sentence. On July 6, 2015, Krause filed a motion to be released of all financial obligations, asserting that he had no income while incarcerated, and that when released on parole, he cannot work due to a disability and will only receive $843 in monthly disability income. On September 11, 2015, the District Court issued an order denying the motion. On November 12, 2015, sixty-two days after the order, Krause filed his notice of appeal. Krause’s petition requested remission of the restitution imposed and referenced his anticipated $920 a month disability pay as evidence of his inability to pay with no other change in circumstances beyond his control. 4 ¶6 We review the grant or denial of a post-trial motion for an abuse of discretion. State v. Griffin, 2007 MT 289, ¶ 10, 339 Mont. 465, 172 P.3d 1223. Under § 46-18-201(5), MCA, when an offender is found guilty of an offense and the sentencing court finds that a victim has sustained a pecuniary loss, the court shall require payment of full restitution to the victim. Unlike § 46-18-232(2), MCA, which requires the sentencing court to consider an offender’s ability to pay other costs, § 46-18-241, MCA, does not require a court to consider an offender’s financial resources or ability to pay with regard to restitution. See State v. Kuykendall, 2006 MT 110, ¶ 12, 332 Mont. 180, 136 P.3d 983 (citing State v. Workman, 2005 MT 22, ¶ 15, 326 Mont. 1, 107 P.3d 462). The sentencing court shall require an offender to make full restitution to victims that sustained a pecuniary loss, including an economic loss, unless the court finds that “because of circumstances beyond the offender’s control, the offender is not able to pay any restitution.” Section 46-18-241(3), MCA. ¶7 Although we grant wider latitude to pro se litigants in pro se proceedings, Krause’s appeal alleges no facts and cites nothing in the record to support a contention that he is unable to pay any restitution because of circumstances beyond his control. See State v. Ferre, 2014 MT 96, ¶ 16, 374 Mont. 428, 322 P.3d 1047. We conclude the District Court did not abuse its discretion when it denied Krause’s Petition for Remission of Fines, Costs and Restitution based on hardship. He agreed to pay over $6,400 in disability back pay, which the District Court considered in initially giving him a probationary sentence. However, he failed to make any payments toward restitution during his probation. Krause’s Petition does not meet any of the standards for relief from 5 restitution. Because we decide this case on the merits, we decline to address whether Krause’s appeal should be dismissed as untimely or whether this Court should affirm the District Court’s order denying Krause’s Petition for Remission of Fines, Costs and Restitution on the grounds that the petition was untimely and contained only claims that were procedurally barred. However, we note § 46-18-246, MCA, provides that a petition to adjust or otherwise waive payment of ordered restitution or amount paid pursuant to § 46-18-241(2)(a), MCA, may be filed at any time. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s denial of Krause’s Petition for Remission of Fines, Costs, and Restitution was not an abuse of discretion. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JIM RICE

September 27, 2016

b0a93cac-aa14-4ae1-a045-d02d29b64011

Carbon County Res. Council v. Bd. of Oil & Gas Conservation

2016 MT 240

DA 15-0613

Montana

Montana Supreme Court

DA 15-0613 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 240 CARBON COUNTY RESOURCE COUNCIL, a Montana Non-profit public benefit corporation, and NORTHERN PLAINS RESOURCE COUNCIL, Montana Non-profit, public benefit corporation, Plaintiffs and Appellants, v. MONTANA BOARD OF OIL AND GAS CONSERVATION, Defendant and Appellee. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 14-0027 Honorable Mary Jane Knisely, Presiding Judge COUNSEL OF RECORD: For Appellants: Jack R. Tuholske, Tuholske Law Office, P.C., Missoula, Montana Amanda R. Knuteson, Knuteson Law Office PLLC, Bozeman, Montana For Appellee: Robert Stutz, James M. Scheier, Assistant Attorneys General, Helena, Montana For Amicus Curiae Montana Petroleum Association: Colby L. Branch, Jeffery J. Oven, Shalise C. Zobell, Crowley Fleck PLLP, Billings, Montana Submitted on Briefs: June 15, 2016 Decided: September 27, 2016 09/27/2016 Case Number: DA 15-0613 2 Filed: __________________________________________ Clerk 3 Justice Beth Baker delivered the Opinion of the Court. ¶1 Carbon County Resource Council and Northern Plains Resource Council (collectively Resource Councils) oppose hydraulic fracturing at the Hunt Creek 1-H well, an exploratory gas well in Carbon County, Montana. Resource Councils challenged the Montana Board of Oil and Gas Conservation’s (the Board) approval of well stimulation activities at the site, claiming that they were denied a meaningful opportunity to participate in the process. The Thirteenth Judicial District Court held that Resource Councils’ concerns were speculative and therefore not ripe for judgment. We disagree and hold that Resource Councils’ claims are ripe for judicial review. We conclude that the Board did not violate their right to participate in its consideration of the permit issued in this case. We thus find it unnecessary to decide whether the Board’s “48-hour notice” rule may be unconstitutional in other circumstances. PROCEDURAL AND FACTUAL BACKGROUND ¶2 The Montana Constitution guarantees citizens a “reasonable opportunity” to participate in government operations. Mont. Const. art. II, § 8. In executing this constitutional mandate, agencies are obligated to “develop procedures for permitting and encouraging the public to participate in agency decisions that are of significant interest to the public.” Section 2-3-103, MCA. As a quasi-judicial state agency administratively attached to the Department of Natural Resources and Conservation, the Board is required to ensure public participation in its decision-making procedural processes. Sections 2-3- 103, 2-4-201, 2-15-3303, MCA. 4 ¶3 The Board’s procedural rules require oil and gas well operators to file an application for a permit to drill with the Board. Admin. R. M. 36.22.601(1). If the proposed well is outside of an existing oil and gas field delineated by the Board, the operator must publish notice of its intent to drill and file proof of publication with the Board. Admin. R. M. 36.22.601(1). The application for a permit to drill must be set for notice and public hearing if an interested person demands an opportunity to be heard pursuant to the procedures provided for under the relevant Administrative Rules. Admin. R. M. 36.22.601(4). Following a hearing, the Board may either grant or deny the permit. Admin. R. M. 36.22.601(5). If the Board grants the permit, it may impose “such conditions” as it finds “proper and necessary.” Admin. R. M. 36.22.601(5)(a). ¶4 Well completion activities such as “hydraulic fracturing, acidizing, or other chemical stimulation . . . are considered permitted activities under the drilling permit for that well only if the processes, anticipated volumes, and types of materials planned for use are expressly described in the permit application for that well.” Admin. R. M. 36.22.608(1).1 Admin. R. M. 36.22.608(2) (the Rule) provides that for exploratory wells—like the well at issue here—the well operator must notify the Board of its “intent to stimulate or chemically treat a well . . . prior to commencing such activities.” The well operator must describe the “fracturing, acidizing, or other chemical treatment” in the 1 “Hydraulic fracturing” or “fracturing,” also known as “fracking,” “fracing,” or “hydro-fracking,” is an oil and gas extraction technique. The Administrative Rules of Montana define “fracturing” as “the introduction of fluid that may or may not carry in suspension a propping agent under pressure into a formation containing oil or gas for the purpose of creating cracks in said formation to serve as channels for fluids to move to or from the well bore.” Admin. R. M. 36.22.302(28). 5 notice, and the operator must give the Board notice “at least 48 hours before commencement of well stimulation activities.” Admin. R. M. 36.22.608(2)(a). A well operator is required to disclose the amount and type of materials used in its well stimulation activities, Admin. R. M. 36.22.1015, and comply with safety and well control requirements if it engages in hydraulic fracturing, Admin. R. M. 36.22.1106. ¶5 In October 2013, Energy Corporation of America (Energy Corp.) announced that it planned to develop oil and gas leases in the Beartooth Mountains. Energy Corp. then filed an application with the Board for a permit to drill an exploratory oil and gas well in Carbon County known as the Hunt Creek 1-H well (Hunt Creek Well). Energy Corp.’s application did not describe any well completion activities pursuant to Admin. R. M. 36.22.608(1). Resource Councils, which are affiliated grassroots conservation and agriculture groups, objected to the permit. Despite procedural problems with Resource Councils’ objection, the Board held a hearing on Energy Corp.’s drilling permit application in February 2014. Nine local residents and an expert testified on behalf of Resource Councils. The residents presented their concerns with the permit application, the environmental assessment’s adequacy, and the potential environmental impacts of hydraulic fracturing at the Hunt Creek Well. The expert, an environmental geologist, testified and submitted a report highlighting the risks associated with the proposed drilling plan as well as risks associated with hydraulic fracturing at the site. ¶6 During the hearing, the Board noted that Energy Corp. proposed drilling an exploratory well to evaluate the site’s potential for development. The Board emphasized 6 that Energy Corp.’s application did not propose hydraulic fracturing and that there was no indication from the application that hydraulic fracturing was planned in the future. At the close of the hearing, the Board approved the permit with the condition that Energy Corp. comply with certain water standards should it propose hydraulic fracturing at the Hunt Creek Well in the future. The Board’s order approving the permit reiterated that Energy Corp. did not propose hydraulic fracturing at the Hunt Creek Well. ¶7 On July 7, 2014, Energy Corp. submitted a sundry notice to the Board pursuant to the Rule. In its notice, Energy Corp. indicated that it intended to “stimulate” or “chemically treat” the Hunt Creek Well and “perform a diagnostic fracture injection test” (diagnostic test) on the well. The notice provided a detailed description of the planned work and stated that the well would be shut in once “25-30 barrels [had] been pumped into the formation.” Pursuant to the Rule, the Board approved Energy Corp.’s notice and allowed it to perform the diagnostic test without engaging in any additional review or public process. ¶8 After the hearing, but prior to Energy Corp.’s submitting notice pursuant to the Rule, Resource Councils challenged the Board’s permitting process for the Hunt Creek Well. Resource Councils claimed, in part, that the Board’s application of the Rule violated their constitutional right to meaningfully participate in government decisions. On the parties’ cross-motions for summary judgment, the District Court held that because 7 hydraulic fracturing had not occurred at the Hunt Creek Well, Resource Councils’ constitutional challenge was not ripe for judgment.2 Resource Councils appeal. STANDARDS OF REVIEW ¶9 We review summary judgment rulings de novo. Reichert v. State, 2012 MT 111, ¶ 18, 365 Mont. 92, 278 P.3d 455. Issues of justiciability—such as standing, mootness, ripeness, and political question—are questions of law that we also review de novo. Reichert, ¶ 20. Our review of constitutional questions is plenary. Williams v. Bd. of Cnty. Comm’rs, 2013 MT 243, ¶ 23, 371 Mont. 356, 308 P.3d 88. DISCUSSION ¶10 1. Whether the District Court erred in concluding that Resource Councils’ challenge was not ripe. ¶11 Relying on Reichert, the District Court first concluded that Resource Councils’ right to participate claim would be ripe only if Energy Corp. had expanded its drilling permit to include hydraulic fracturing without public input. The court found that Energy Corp.’s diagnostic test did not meet the definition of hydraulic fracturing under Admin. R. M. 36.22.302(28). Thus, the court concluded that Resource Councils’ assertion that hydraulic fracturing had occurred at the Hunt Creek Well was “speculation unsupported by any specific facts.” The District Court concluded therefore that Resource Councils’ right to participate claim was unripe for judgment. 2 Resource Councils also claimed that the Board acted arbitrarily and capriciously in approving the permit. The District Court granted the Board summary judgment on the issue. Resource Councils do not appeal that holding. 8 ¶12 It is well-established that “the judicial power of Montana’s courts is limited to ‘justiciable controversies.’” Reichert, ¶ 53 (quoting Plan Helena, Inc. v. Helena Reg’l Airport Auth. Bd., 2010 MT 26, ¶ 6, 355 Mont. 142, 226 P.3d 567). A justiciable controversy is, in general terms, “one that is definite and concrete . . . as distinguished from an opinion advising what the law would be upon a hypothetical state of facts, or upon an abstract proposition.” Reichert, ¶ 53 (citations and internal quotations omitted). Ripeness—which is a specific justiciability doctrine—“is concerned with whether the case presents an ‘actual, present’ controversy.” Reichert, ¶ 54 (quoting Mont. Power Co. v. Mont. Pub. Serv. Comm’n, 2001 MT 102, ¶ 32, 305 Mont. 260, 26 P.3d 91). As such, “cases are unripe when the parties point only to hypothetical, speculative, or illusory disputes as opposed to actual, concrete conflicts.” Reichert, ¶ 54 (citations omitted). ¶13 In their amended complaint, Resource Councils asserted that the Rule allows a company to proceed with hydro-fracking upon providing the Board’s staff certain specified information 48 hours in advance of commencing hydro-fracking. The Board staff is under no obligation to take further action, inform the Board or the public of the fact that hydro-fracking will occur at the [Energy Corp.] well. They asserted further that no additional “environmental review, public participation or Board deliberation is required under the terms of [the Rule].” Resource Councils argued that the Rule, as applied here, consequently violated their “fundamental right to meaningfully participate in government decisions.” Therefore, contrary to the District Court’s conclusion, Resource Councils’ right to participate claim does not hinge on whether Energy Corp. engaged in hydraulic fracturing at the Hunt Creek Well. Rather, 9 their claim centers on whether they had the opportunity to participate in the permitting process. ¶14 It is undisputed that Energy Corp. filed a sundry notice pursuant to the Rule’s procedures, which the Board approved. Therefore, the controversy—whether Resource Councils had the opportunity to participate in the process—was not a “hypothetical, speculative, or illusory dispute[ ].” Reichert, ¶ 54. On the contrary, Resource Councils’ claim that the Board violated their right to participate in applying the Rule raised “an actual, present controversy” because the Board applied the Rule. Reichert, ¶ 54 (citation and internal quotations omitted). ¶15 The District Court erred in concluding that Resource Councils’ right to participate claim was unripe. We proceed to consider the claim and its merits. ¶16 2. Whether the Board violated Resource Councils’ right to participate. ¶17 Resource Councils assert that the Board expanded the original well permit’s scope when it approved Energy Corp.’s sundry notice pursuant to the Rule because the notice, not the original application for a permit to drill, “is where the operator discloses a desire to chemically stimulate a well and provides specific information about the proposed activities.” As such, Resource Councils assert that the “Board failed to provide adequate notice or meaningful opportunity for public participation in the decision making process” that led to the Board’s approving chemical stimulation activities under the Rule. Resource Councils argue that the Board therefore violated their fundamental right to 10 participate under both the Public Participation in Governmental Operations Act, §§ 2-3- 101 to 2-3-301, MCA, and Article II, Section 8, of the Montana Constitution. ¶18 Resource Councils acknowledge that the Board provided them an opportunity to participate during the February 2014 hearing on Energy Corp.’s application for a permit to drill the exploratory Hunt Creek Well. They contend, however, that that “hearing cannot suffice as a meaningful opportunity to participate in a decision to chemically stimulate the [Energy Corp.] well” because the Board made clear during the hearing that it was considering only an exploratory well, the permit’s environmental assessment did not address hydraulic fracturing, and the Board’s decision to approve the exploratory well “did not implicate the concerns of the public” regarding hydraulic fracturing. Moreover, Resource Councils allege, the Board “stated it lacked authority or jurisdiction to consider specific concerns regarding” hydraulic fracturing during the hearing. Finally, Resource Councils contend that hydraulic fracturing at the Hunt Creek Well is a matter of significant public interest and therefore the Board was required to adopt procedures to ensure adequate notice and public participation in the Rule’s procedural process, which it failed to do. ¶19 The Board counters that its approval of well stimulation activities pursuant to the Rule was not an expansion of the original drilling permit’s scope because well stimulation is allowed under a drilling permit. As such, the Board contends, its rules and procedures ensuring notice and public participation during the permitting process include the well stimulation activities allowed under a drilling permit. The Board contends that 11 the record demonstrates that Resource Councils always knew that well stimulation activities could occur under a drilling permit. The Board and Amicus Montana Petroleum Association also maintain that the diagnostic test did not constitute hydraulic fracturing because the test’s purpose was to temporarily test the well’s reservoir pressure and did not involve well stimulation. ¶20 The Board argues that Resource Councils had the opportunity to participate in— and did participate in—the Board’s decision to approve the drilling permit, which included consideration of the potential for hydraulic fracturing at the Hunt Creek Well. As evidence that Resource Councils “meaningfully participated in the Board’s decision,” the Board points to the considerable testimony Resource Councils’ members and their expert provided during the hearing as well as the fact that the Board approved the permit with the condition that Energy Corp. comply with certain water standards should it engage in hydraulic fracturing. Because Resource Councils participated in the permit approval process—which the Board claims included consideration of well stimulation activities—the Board asserts that providing Resource Councils with an additional opportunity to participate was not required. ¶21 “The essential elements” required to meet Montana’s constitutional and statutory guarantees of public participation are “notice and an opportunity to be heard.” Bitterroot River Protective Ass’n v. Bitterroot Conservation Dist., 2008 MT 377, ¶ 21, 346 Mont. 507, 198 P.3d 219 (citing § 2-3-103(1)(a), MCA). Public participation procedures “must 12 include a method of affording interested persons reasonable opportunity to submit data, views, or arguments.” Section 2-3-111(1), MCA. ¶22 The record demonstrates that Resource Councils had notice not only of the application for a permit to drill, but also of the potential for well stimulation activities at the Hunt Creek Well pursuant to the Rule. Affidavits of Resource Councils’ members state explicitly that they received notice of Energy Corp.’s application for a permit to drill. Based on this notice, Resource Councils sent the Board a letter on October 23, 2013, requesting a hearing to discuss their concerns with the proposed permit. The testimony of Resource Councils’ members at the hearing focused on the potential negative impacts of hydraulic fracturing at the site. Furthermore, Resource Councils’ expert submitted a report that focused, in part, on the risks associated with hydraulic fracturing “[g]iven the likelihood that hydraulic fracturing will take place at the proposed well.” ¶23 The record demonstrates further that Resource Councils were given an opportunity to be heard on their concerns about well stimulation activities under the Rule. Although the Board could have declined to hold a hearing due to Resource Councils’ procedural problems in objecting to the permit, Admin R. M. 36.22.601(4), the Board held a full hearing on the permit application due, in part, to the “extensive media coverage and public comments received during the public comment period.” Resource Councils’ members and their expert testified for nearly an hour and a half during the hearing. Their testimony focused on the potential negative environmental impacts associated with 13 hydraulic fracturing at the Hunt Creek Well. The recorded hearing testimony demonstrates that the Board clearly afforded Resource Councils an opportunity “to submit data, views, or arguments” related to well stimulation at the site. Section 2-3- 111(1), MCA. Moreover, the Board made clear during the hearing that it retained “the full authority to grant, deny, or grant conditionally the application for a drilling permit.” That the Board approved the permit with the condition that Energy Corp. comply with certain water standards should it propose hydraulic fracturing at the Hunt Creek Well in the future demonstrates that Resource Councils were heard on the issue. ¶24 The District Court additionally observed “that the record clearly reflects that the Board has continually guaranteed to [Resource Councils] that [they] will be given the opportunity to weigh in on any [hydraulic fracturing] ventures that might someday be brought forth.” During the hearing, the Board’s administrator noted that “wastewater and hydraulic fracturing are regulated under the rules [the Board] adopted a couple of years ago. If hydraulic fracturing isn’t approved with the drilling permit then there’s another process that has to be followed to approve it.” The administrator emphasized that “hydraulic fracturing has not been proposed in the permit. The environmental assessment assesses what was proposed, which was a potential horizontal well, but does not propose hydraulic fracturing.” In its briefing on appeal, the Board emphatically asserts that hydraulic fracturing has not occurred at the Hunt Creek Well. It does not take issue with the District Court’s statement that the Board guaranteed that Resource Councils will be 14 given the opportunity to participate should hydraulic fracturing be proposed at the Hunt Creek Well in the future. ¶25 It is unclear from the record, the Board’s briefing, and our review of the pertinent Administrative Rules what process the Board anticipates should Energy Corp. propose hydraulic fracturing at the Hunt Creek Well. The Board’s representations, however, demonstrate that it will further consider the matter should Energy Corp. make that proposal, and that it will afford additional process at that time. On this record, we conclude that Resource Councils had notice and an opportunity to participate in the Board’s consideration of the permit and to present evidence about their concerns for well stimulation activities at the site. Accordingly—under the facts presented here—the Board did not violate Resource Councils’ right to participate. CONCLUSION ¶26 We reverse the District Court’s holding that Resource Councils’ right to participate challenge was unripe; however, we conclude that the Board did not violate Resource Councils’ right to participate in applying the Rule to the permit it issued for the Hunt Creek Well. /S/ BETH BAKER We concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA /S/ JIM RICE 15 Chief Justice Mike McGrath, concurring. ¶27 Because of the unique procedural nature of this case, CCRC is left without a resolution on the merits of its constitutional and statutory challenge to the sundry notice and forty-eight-hour provisions of Admin. R. M. 36.22.608. ¶28 The District Court determined that the challenge was not ripe because hydraulic fracturing had not occurred. The majority Opinion, which I have signed, reverses the District Court on ripeness. We conclude that the February 2014 hearing was sufficient to satisfy the right to participate challenges brought regarding the Board’s grant of the initial permit to drill, but specifically determine it is unnecessary to decide whether the Board’s forty-eight-hour notice rule may be unconstitutional in other circumstances. ¶29 The District Court specifically noted: [T]his Court anticipates a claim regarding the constitutionality of Administrative Rules of Montana § 36.22.608(2) may become ripe for adjudication in the future if it is used to expand an APD to include fracking. The Court notes that 48 hours is a short notification period in this developing industry and recognizes that other states have expanded this time frame. The District Court’s anticipation was strongly anchored in the record. Both the administrator and the Board made it clear they were considering a vertical wildcat well and that fracking was not proposed. As the majority notes, the Board does not challenge the District Court’s assumption and has continually guaranteed that the plaintiffs will have the opportunity to participate should any “[hydraulic] fracking ventures . . . someday be brought forth.” 16 ¶30 The Board asserts in its brief to this Court that hydraulic fracturing has not occurred at, or been proposed for, this well. It is with this understanding that I have signed the majority Opinion. If hydraulic fracturing is proposed for this well, the Board will implement procedure to ensure that the public’s right to a meaningful opportunity to participate is protected. ¶31 I concur. /S/ MIKE McGRATH Justices James Jeremiah Shea and Michael E Wheat join the concurring Opinion of Chief Justice Mike McGrath. /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA

September 27, 2016

51645624-35af-4a4c-a370-1efd64f2638b

In re A.G.

2016 MT 203

DA 15-0769

Montana

Montana Supreme Court

DA 15-0769 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 203 IN THE MATTER OF: A.G. and T.G., Youths in Need of Care. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DN 11-9C and DN 14-41C Honorable John C. Brown, Presiding Judge COUNSEL OF RECORD: For Appellant: Kathryn McEnery, McEnery Law Office, P.C., Hot Springs, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Martin Lambert, Gallatin County Attorney, Bozeman, Montana Submitted on Briefs: June 8, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 J.G. (Father) appeals from two orders entered by the Eighteenth Judicial District Court, Gallatin County, terminating his parental rights to his daughter A.G. and son T.G. We affirm. ¶2 Father presents the following issue for review: Did the Department of Health and Human Services (the Department) make reasonable efforts to prevent the necessity of removing A.G. and T.G. as required by § 41-3-423, MCA? FACTUAL AND PROCEDURAL BACKGROUND ¶3 Father and K.G. (Mother) have two minor children together, A.G., born in 2009, and T.G., born in 2014. In 2009, K.G. was intoxicated, operating a motor vehicle, and involved in an accident while A.G. was in the vehicle. As a result, the Department entered into a voluntary services agreement with Mother to work with her chemical dependency issues and parenting of A.G., then only two months old. On February 16, 2010, Mother left A.G. in her unlocked vehicle parked in a lot while she was in a store shopping. As a result, a police officer cited Mother with endangering the welfare of a child and the Department and Mother entered into a second voluntary services agreement. On February 24, 2011, a police officer arrested Father for assaulting Mother in A.G.’s presence. Both parents were intoxicated. Father was charged with Aggravated Assault. The Department entered into a third voluntary services agreement with the family. ¶4 On June 21, 2011, the Department removed A.G. because Mother was attempting to drive to North Dakota under the influence of drugs and alcohol with A.G. in the vehicle. Mother pled guilty to endangering the welfare of a child and DUI. On June 24, 3 2011, the Department filed a petition for emergency protective services and temporary legal custody of A.G. Mother stipulated, but Father contested A.G.’s adjudication as a youth in need of care and the Department’s petition for emergency protective services. After conducting a hearing, the District Court adjudicated A.G. a youth in need of care and granted the Department temporary legal custody for six months. The District Court approved a treatment plan and Father signed it on January 9, 2012. The District Court extended temporary legal custody several times. ¶5 On April 30, 2013, the Department placed A.G. with Father for a trial home visit in North Dakota. The visit was successful and Father successfully completed his treatment plan. On June 25, 2013, Mother relinquished her parental rights to A.G. On August 2, 2013, the District Court sentenced Mother to thirteen months commitment to Department of Corrections with five years suspended for criminal endangerment and DUI, both felonies, in connection with an incident wherein Mother left an unrelated child unattended in a vehicle in hot weather. On November 18, 2013, the District Court terminated Mother’s parental rights to A.G. On December 17, 2013, the District Court ordered permanent placement of A.G. with Father and the dependent and neglect proceeding concerning A.G. was dismissed. A child protection specialist involved in the case cautioned Father that if Father and Mother resumed their relationship and Mother resumed drinking alcohol, Father needed to protect A.G. Father agreed that protecting A.G. was his priority. ¶6 Upon discharge from her period of commitment, Mother and Father resumed their relationship in North Dakota, Mother resumed drinking alcohol, and the parties married. 4 Thereafter, Father routinely left A.G. in Mother’s care without supervision of Mother’s parenting. Father, however, contacted North Dakota police and asked them to remove Mother because she was drunk and out of control in Father’s home. Mother returned to Montana because she violated her probation by drinking alcohol in North Dakota. She again drank when she returned to Montana. Father and A.G. then moved back to Montana to live with Mother. ¶7 On May 14, 2014, Father bought Mother a bottle of wine to drink, even though he knew Mother was pregnant. Father admitted he understood that Mother consuming large amounts of alcohol while pregnant can harm the fetus. Father also admitted that he advised Mother to stay in the vehicle and bought her the alcohol because she was drunk and pregnant and he was embarrassed. That night, A.G. was not home and Mother and Father drank and watched movies together. According to Father, Mother “got a little physical” and he locked himself in the bedroom. Neighbors contacted police when they heard Mother and Father arguing. Mother picked the bedroom door lock and Father locked himself in the bathroom until police arrived. When police arrived they believed Mother was intoxicated. They observed alcohol bottles, noticed that Mother was slurring her words, struggling to balance, and leaning on the walls for support. Both Mother and Father were arrested—Father because he had an outstanding warrant and Mother for violating her probation by drinking alcohol. Police contacted the Department. The Department removed A.G. and placed her in kinship care. Again, the Department filed a petition for emergency protective services and temporary legal custody “based on the Father’s physical neglect of A.G., including exposure to alcohol abuse, domestic 5 violence, and failure to protect against [Mother] whose parental rights to A.G. were terminated.” ¶8 In June 2014, while Mother was five months pregnant, a motorist found her drunk and lying in a roadway. The motorist tried to take her home, but Mother could not describe to him where she lived. He took her to his house instead, where she became aggressive and he contacted police. Police arrived and took Mother to the hospital. Mother went from the hospital to jail where a breath test indicated she had a blood alcohol content of .238. Mother’s probation officer contacted the Department. Mother’s probation officer also listened to a recording of a phone call Mother made to Father while she was incarcerated wherein Father indicated he planned to flee the state with A.G. ¶9 Later that month, a neighbor observed Father with A.G. According to the neighbor, Father and A.G. were alone at a pond, although he was not allowed unsupervised visits with A.G. at the time. Father was intoxicated and repeatedly dunking A.G. underwater. The neighbor explained that A.G. was crying, choking, and reminding her father that she did not know how to swim, but Father continued dunking and throwing her into the water. The neighbor contacted the Department. Afterwards, Father left a message on the neighbor’s husband’s phone saying he was so angry he could “kill someone” and warning that his wife should “stay[] the fuck out of [his] life.” The neighbor and her husband obtained an order of protection against Father. ¶10 T.G. was born in September 2014, and the Department removed him the following day before Mother and Father could leave the hospital with him. The reasons listed for T.G.’s removal were Mother and Father’s history of domestic violence, alcohol abuse, 6 A.G.’s pending dependent and neglect case, the Department’s prior history with Mother and Father, and T.G.’s vulnerability as a newborn. T.G. was placed in foster care for several days and then in kinship care with A.G. On October 3, 2014, the Department filed for emergency protective services and temporary legal custody of T.G. ¶11 After conducting a hearing, the District Court adjudicated A.G. a youth in need of care. In its findings of fact and conclusions of law, issued November 10, 2014, the District Court concluded that the Department had made reasonable efforts to prevent A.G.’s removal: [I]ncluding providing the Father a Treatment Plan and services in the prior DN; providing reunification services in the prior DN; placing A.G. in kinship placement in this case; and arranging for supervised parenting time in this case. The Court make[s] this determination recognizing per § 41-3-423, MCA, the child’s health and safety are of paramount concern in making reasonable efforts. Mother and Father stipulated to T.G. being a youth in need of care. The District Court concluded reasonable efforts had been made; however, “no services could have been provided to the family which would have prevented or eliminated the need” for T.G.’s removal. The District Court approved a treatment plan and Father signed it on November 26, 2014. The District Court also granted the Department temporary legal custody of A.G. and T.G. for six months. ¶12 Also on November 26, 2014, the Department placed A.G. and T.G. with Mother and Father for a trial home visit. On December 23, 2014, police and the Department were contacted after A.G., aged five, and her cousin, also five, were found walking around town unsupervised. When found, the two said they had been sleeping in a park 7 and someone’s dad had dropped them off there. The children were taken home, where Mother was found intoxicated. Police were contacted and arrested Mother for violating her probation. The Department removed A.G. and T.G. from their trial home visit. ¶13 Father did not successfully complete his treatment plan. On May 26, 2015, the Department filed a petition to terminate Father’s parental rights to A.G. and T.G. Mother relinquished her rights to T.G. On November 30, 2015, the District Court terminated Mother’s parental rights to T.G. The District Court held a termination hearing for Father. Father failed to appear. On December 1, 2015, the District Court terminated Father’s parental rights to A.G. and T.G. In its orders terminating Father’s parental rights, the District Court concluded reasonable efforts had been made given the need to protect the children’s health and safety. ¶14 Father appeals. STANDARDS OF REVIEW ¶15 We review a district court’s decision to terminate parental rights for an abuse of discretion. In re C.J.M., 2012 MT 137, ¶ 10, 365 Mont. 298, 280 P.3d 899 (citation omitted). We review a district court’s findings of fact for clear error and its conclusions of law for correctness. C.J.M., ¶ 10 (citations omitted). DISCUSSION ¶16 Did the Department make reasonable efforts to prevent the necessity of removing A.G. and T.G. as required by § 41-3-423, MCA? ¶17 “It is the policy in Montana to protect children whose health and welfare may be threatened by those persons responsible for their care, but this protection must be 8 provided in a manner that preserves the family environment, if possible.” In re C.J., 2010 MT 179, ¶ 23, 357 Mont. 219, 237 P.3d 1282, citing § 41-3-101(1)(a)-(b), MCA. Section 41-3-423(1), MCA, provides: The department shall make reasonable efforts to prevent the necessity of removal of a child from the child’s home and to reunify families that have been separated by the state. Reasonable efforts include but are not limited to voluntary protective services agreements, development of individual written case plans specifying state efforts to reunify families, placement in the least disruptive setting possible, provision of services pursuant to a case plan, and periodic review of each case to ensure timely progress toward reunification or permanent placement. In determining preservation or reunification services to be provided and in making reasonable efforts at providing preservation or reunification services, the child’s health and safety are of paramount concern. We have stated that this statute “obligates the Department to make ‘reasonable efforts’ to reunify families; however, the statute does not define the term and indeed it would be impossible to do so, as each case must be evaluated on its own facts. But clearly the statute does not require herculean efforts.” In re K.L., 2014 MT 28, ¶ 41, 373 Mont. 421, 318 P.3d 691. We similarly understand that “reasonable efforts” are required to prevent the necessity of removal; however, these efforts must be tailored to the facts of each case and clearly “herculean efforts” are not required. ¶18 Father argues § 41-2-423, MCA, requires the Department “make reasonable efforts prior to the removal in each and every case” and, here, the Department failed to make reasonable efforts prior to removing A.G. in May 2014 and prior to removing T.G., the day after he was born. The Department counters that the children’s health and safety required their removal and nothing could have been done to prevent it. We agree with the Department. The Department removed A.G. in May 2014 after Father bought Mother 9 alcohol during her pregnancy with T.G. and a neighbor contacted police when they could hear Mother and Father arguing. Both parents were subsequently arrested. The Department removed T.G. when he was two days old because he was vulnerable and there were no viable options to assure his in-home safety amid Mother and Father’s repeated instances of alcohol abuse and domestic violence. ¶19 Here, the Department had been involved with and receiving referrals regarding this family since A.G. was two months old. The Department entered into three voluntary services agreements before removing A.G. for the first time. The Department provided treatment plans and services during the first removal. Father was successful, Father and A.G. were reunified, and the first proceeding was dismissed. Father was cautioned to prioritize A.G.’s protection, including protecting her from Mother and he agreed that A.G.’s safety was a priority. Father reinitiated his relationship with Mother and married her knowing Mother was an alcoholic and drinking. He recognized that Mother’s parental rights to A.G. had been terminated and that Mother had multiple citations for endangering the welfare of his children. In spite of this history, Father allowed Mother to care for A.G. without supervision. Father also recognized that Mother was drinking during her pregnancy and that this could harm the fetus. Nonetheless, Father purchased alcohol for Mother and consumed alcohol with Mother during her pregnancy with T.G. ¶20 Reasonable efforts must be reasonable under the circumstances. What may have been reasonable prior to removing A.G. the first time—providing three separate voluntary services agreements—was not reasonable for the Department prior to removing A.G. for the second time and removing T.G. shortly after his birth. Father argues “the 10 Department made no efforts whatsoever” to prevent A.G.’s removal in May 2014, but fails to assert what efforts the Department could have utilized when Father was arrested that evening on an outstanding warrant. Conversely, we believe it would have been unreasonable for the Department not to resume responsibility for A.G. at that point because Mother’s rights had been terminated and Father was taken into custody, leaving no one responsible for A.G.’s health and safety. Father also fails to assert what efforts the Department could have utilized to assure T.G.’s safety after his birth. We believe it would have been unreasonable for the Department to allow Mother and Father to leave the hospital with T.G. knowing T.G.’s vulnerability as a newborn and that Mother and Father had exposed him to alcohol and domestic violence prior to his birth. ¶21 In consideration of the paramount importance of A.G. and T.G.’s health and safety and given the evidence of extensive interaction between the Department and this family from the time A.G. was two months old until Father’s termination, we conclude the District Court correctly determined that the Department made reasonable efforts to prevent the necessity of their removal. CONCLUSION ¶22 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER

August 23, 2016

760a9ce8-4b12-4618-852f-244a1f823390

State v. C. Stevenson

2016 MT 221N

DA 15-0435

Montana

Montana Supreme Court

DA 15-0435 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 221N STATE OF MONTANA, Plaintiff and Appellee, v. CELENA STEVENSON, Defendant and Appellant. APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. ADC 14-276 Honorable Greg G. Pinski, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Moses Okeyo, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana John W. Parker, Cascade County Attorney, Carey Ann Shannon, Deputy County Attorney, Great Falls, Montana Submitted on Briefs: August 3, 2016 Decided: September 6, 2016 Filed: __________________________________________ Clerk 09/06/2016 Case Number: DA 15-0435 2 Justice James Jeremiah Shea delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Celena Stevenson appeals her conviction of felony criminal possession of dangerous drugs in the Eighth Judicial District Court, Cascade County. We address whether the District Court erred in concluding the search warrant application for Stevenson’s residence contained sufficient probable cause when the District Court denied her motion to suppress and dismiss. We affirm. ¶3 Stevenson pled guilty to possession of dangerous drugs, while reserving her right to appeal the denial of her motion to suppress and dismiss. The motion contends the search warrant’s application did not have sufficient probable cause for the issuing judicial officer to grant the warrant and allow the search that led to the seizure of methamphetamine in Stevenson’s residence. ¶4 On June 23, 2014, Great Falls Police Department Detective Jason Gange provided the District Court with an Application for Search Warrant (Application), to search Stevenson’s residence and attached garage. To establish probable cause, Gange wrote that: (1) on October 9, 2013, a methamphetamine dealer, labeled as a cooperating subject (informant), told police the address of a residence he obtained his methamphetamine from, later confirmed to be Stevenson’s residence; (2) on April 1, 2014, a second 3 informant informed the Drug Task Force that Stevenson’s husband was selling pound quantities of methamphetamine and had witnessed several pounds of methamphetamine in Stevenson’s home three weeks prior; (3) on the same day, a third informant told the Drug Task Force he had been buying methamphetamine out of Stevenson’s garage for the past month and a half; (4) on May 22, 2014, a confidential informant (CI) attempted a “controlled buy” with Stevenson’s husband, under the Drug Task Force’s supervision; Stevenson’s husband told the CI he did not have any methamphetamine; and (5) on June 18, 2014, a fourth informant informed the Drug Task Force he saw a male—known to the Task Force as “Lurch”—buy methamphetamine from Stevenson and her husband in their garage on June 16, 2014. ¶5 On June 23, 2014, the District Court granted the search warrant to search the Stevensons’ residence and attached garage. On July 1, 2014, law enforcement executed the warrant and discovered illegal drugs. After Stevenson admitted to being involved with her husband selling methamphetamine, the State charged her with possession of illicit drugs and drug paraphernalia. ¶6 Stevenson moved to dismiss her case and suppress evidence seized in the search pursuant to the warrant, contending it relied on stale information and unreliable witnesses. On February 4, 2015, the District Court held a hearing on the motion to suppress. On February 19, 2015, the District Court denied Stevenson’s motion, concluding that the issuing judicial officer had substantial basis for determining probable cause existed for the search warrant. Stevenson appeals. 4 ¶7 “We review 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 application of the law is correct.” State v. Kasparek, 2016 MT 163, ¶ 6, 384 Mont. 56, __ P.3d __. We review a district court’s ruling on a criminal defendant’s motion to dismiss de novo, to determine whether the district court’s conclusions of law were correct. State v. Barron, 2008 MT 69, ¶ 10, 342 Mont. 100, 179 P.3d 519. ¶8 Stevenson contends the informants’ reports do not show a “continuing” criminal activity or a criminal activity during the time period the search warrant was applied for, granted, or executed. She argues that the informants’ reports are stale and insufficient to establish probable cause. Stevenson further contends that the CI information is unreliable because the attempted drug-buy was not successful and failed to show criminal activity. Finally, Stevenson contends that each informant is too unreliable to create the necessary probable cause for a search warrant. The State counters by pointing to the consistency of the five combined informants, all of whom provided information within a year of the warrant, with the most recent one being five days before the search warrant was issued. The State therefore contends that the District Court correctly determined that the totality of the circumstances created probable cause for the search warrant. ¶9 A search warrant application must provide facts sufficient to show probable cause to believe an offense has been committed and that evidence of the crime may be found in the place to be searched. Section 46-5-221, MCA; State v. Tucker, 2008 MT 273, ¶ 16, 345 Mont. 237, 190 P.3d 1080. To evaluate whether probable cause supported a warrant’s issuance, we apply the “totality of the circumstances” test. Tucker, ¶ 16 (citing 5 Illinois v. Gates, 462 U.S. 213, 103 S. Ct. 2317 (1983)). The totality of the circumstances test requires the issuing judicial officer to “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.” Tucker, ¶ 16 (citations omitted). ¶10 The issuing judicial officer’s probable cause determination does not require facts sufficient to make a showing of criminal activity; only a probability of criminal activity must be present. Tucker, ¶ 17. This Court determines whether the issuing judicial officer had a “substantial basis” to determine that probable cause existed. Tucker, ¶ 17. When making that determination, the “issuing judicial officer’s determination . . . [is] paid great deference and every reasonable inference possible [is] drawn to support that determination of probable cause.” Tucker, ¶ 17. ¶11 Reliability of the informants is part of the totality of the circumstances. When a search warrant application relies on informants, and those informants are not anonymous and have provided their personal observations, we evaluate the information’s reliability by determining whether “the informant has provided reliable and accurate information to the officers in the past, whether the admission is against the informant’s interest, or whether the informant was motivated by good citizenship.” Tucker, ¶ 18 (quoting State v. Beaupre, 2004 MT 300, ¶ 38, 323 Mont. 413, 102 P.3d 504). Those factors are not a strict test, but guidelines for evaluating a search warrant. Tucker, ¶ 19. ¶12 Here, the first informant made a statement against interest because he admitted to purchasing methamphetamine from Stevenson’s residence. The third informant also 6 made a statement against interest because he admitted to purchasing methamphetamine from Stevenson’s husband for a month and a half. Neither the first nor third informant were anonymous, therefore as in Tucker, the informants’ information is reliable because they were not anonymous and gave personal accounts amounting to statements against their interests. ¶13 The second and fourth informants did not make statements against their interests. However, both personal accounts corroborate the first and third informants’ information. Consistent information bolstered the issuing judicial officer’s decision as to whether a “fair probability exists that contraband or evidence of a crime will be found in” Stevenson’s residence. As we made clear in Tucker, the issuing officer makes a “common sense determination” when evaluating the totality of circumstances, and four informants corroborating each other creates a “common sense determination” that criminal activity is occurring. ¶14 Although Stevenson correctly points out that the search warrant application did not speak to whether the first or third informant provided reliable information in other matters, the guidelines above are disjunctive. Thus, every factor need not be present. Stevenson also contends that the statements were not against the informants’ interests because they received beneficial treatment for providing information. Neither the search warrant application nor anything else in the record indicates such treatment, and we will not assume facts into the record. See M. R. App. P. 12(1)(d) (requiring appellants to cite the portions of the record at which material facts appear). Stevenson further contends that the first informant did not make a statement against interest because law enforcement 7 already had enough incriminating information on him: illegal possession and distribution of methamphetamine. Sufficient information to convict a defendant does not strip away additional incriminating information of its significance, such as an admission to purchasing methamphetamine. ¶15 We next turn to whether the informants’ information was stale. The timeliness and relationship between each piece of information from an informant in the search warrant application helps determine whether the information is stale. The issuing judicial officer may not rely on stale information when issuing a search warrant. State v. Valley, 252 Mont. 489, 493, 830 P.2d 1255, 1258 (1992). A staleness determination depends on “the nature of the property and activity in issue” and whether the criminal activity is “continuing in nature,” in which case more time may elapse before information becomes stale. State v. Tackitt, 2003 MT 81, ¶ 39, 315 Mont. 59, 67 P.3d 295. ¶16 Information seven-to-ten months old is not considered stale if the information exposes continuing criminal activity. State v. Anderson, 1999 MT 60, ¶ 15, 293 Mont. 490, 977 P.2d 983. In Anderson, we held that tips regarding Anderson’s drug activities between seven and ten months prior to the search at issue were not stale because he also had drug-related arrests five years and seven months prior to the search. Therefore, “[a]lthough the informant tips and arrest information may be stale when each is considered individually, the combined effect of the information . . . reveals a pattern of continuous conduct by Anderson, thus making the information more relevant in a probable cause determination.” Anderson, ¶ 15. 8 ¶17 By contrast, we have found tips eleven months to seven years old stale, because none led to corroboration of whether the criminal activity was still occurring during the search at issue. Valley, 252 Mont. at 493, 830 P.2d at 1257. We have also found that a recent, yet anonymous, tip relevant to seven-to-ten year old criminal activity to be insufficient for probable cause because too much time had passed between the tips. Tackitt, ¶¶ 5-6, 36, 40. ¶18 Here, the search warrant application has supporting information regarding events occurring between October 2013 and June 2014, with the most recent event occurring days before the warrant’s issuance. The application’s information was more recent than Anderson, Valley, or Tackitt. Further, a large gap of many years existed between information in Valley and Tackitt. Here, however, authorities collected all four pieces of information within a year of the search warrant’s issuance. All four pieces of information implicated Stevenson’s residence and the same type of illicit activity occurring in the residence or its attached garage. As seen in Anderson, the information’s combined effect therefore creates a “pattern of continuous conduct” that ensures the information is not stale, and in turn reliable for an issuing judicial officer to consider when determining whether probable cause exists for a search warrant. The District Court therefore correctly determined that the application’s information was not stale. After determining the search warrant application’s information was not stale, and its informants were reliable, the District Court correctly concluded that sufficient facts created probable cause to issue the warrant. See Anderson, ¶ 15. 9 ¶19 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the case presents a question controlled by settled law or by the clear application of applicable standards of review. The District Court’s findings of fact are not clearly erroneous and its interpretation and application of the law were correct. We affirm. /S/ JAMES JEREMIAH SHEA We Concur: /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ JIM RICE

September 6, 2016

c6ff8de4-34c7-4d35-8991-e2697946de58

Tidyman’s Mgmt. Servs., Inc. v. Nat’l Union Fire Ins. Co.

2016 MT 201

DA 15-0583

Montana

Montana Supreme Court

DA 15-0583 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 201 TIDYMAN'S MANAGEMENT SERVICES INC., a Washington corporation; LENORA DAVIS BATEMAN, VICKI EARHART, CAROL HEALD, THERESA YOUNGQUIST, BARBARA GAUSTAD, SHARON YOUNG, DIANE MOLES, KYLE BAILEY, MARK RADEMAN, DREW OLSEN, CHADNEY SAWYER, THOMAS NAGRONE, DAN NAGRONE, DARRELL NACCARATO, PAT DAHMEN, JANELLE SELLS, TERRI ORTON, WILLIAM EVANSON, BILL EVANSON, TAMMY EVANSON, LARRY THOMPSON, JASON GUICE, JAMIE GUICE, LAURA SQUIBB, RICK BAILLIE, JEFFREY TUCKER, AMY TUCKER, MARYBETH WETSCH, LAURA STOCKTON, JERRY STREETER, CLARA KUHN, NANCY McDONALD, TED NUXOLL, CINDY NUXOLL and DEAN CARLSON, individuals, Plaintiffs and Appellees, v. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA and JOHN DOES 1-10, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DV 10-695 Honorable Karen Townsend, Presiding Judge COUNSEL OF RECORD: For Appellant: James H. Goetz, Goetz, Baldwin & Geddes, P.C., Bozeman, Montana Robert F. James, Mary K. Jaraczeski, Ugrin, Alexander, Zadick & Higgins, P.C., Great Falls, Montana 08/23/2016 Case Number: DA 15-0583 2 Timothy R. Macdonald, Nathaniel J. Hake, Arnold & Porter LLP, Denver Colorado, (Attorneys for National Union Fire Insurance Co. of Pittsburgh, PA) For Appellees: G. Patrick HagEstad, Milodragovich, Dale & Steinbrenner, P.C., Missoula, Montana (Attorney for Individual Plaintiffs, Individual Appellees) Michael G. Black, Black Law Office, Helena, Montana (Attorney for Tidyman’s Management Services, Inc.) W. William Leaphart, Attorney at Law, Helena, Montana Gregory S. Munro, Attorney at Law, Missoula, Montana (Co-Counsel for Plaintiffs, Appellees) For Amicus Curiae Montana Trial Defense Lawyers: Paul R. Haffeman, Davis, Hatley, Haffeman & Tighe, Great Falls, Montana Martha Sheehy, Sheehy Law Firm, Billings, Montana Submitted on Briefs: May 18, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 3 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 In Tidyman’s Management Services v. Davis (Tidyman’s I), 2014 MT 205, 376 Mont. 80, 330 P.3d 1139, we affirmed the District Court’s finding that National Union Fire Insurance (NUFI) breached its duty to defend its insureds, Davis and Maxwell, but we reversed the District Court’s approval of a stipulated settlement between Davis and Maxwell and Plaintiffs for $29 million. We remanded for a hearing on the reasonableness of the settlement amount. The District Court conducted a reasonableness hearing, and again approved the stipulated settlement. NUFI appeals. We remand for a second reasonableness hearing. ISSUES ¶2 We restate the issues on appeal as follows: ¶3 Did the District Court err in using a “reliable evidence” test to assess the reasonableness of the stipulated judgment? ¶4 Did the District Court err by not deducting from the $29 million judgment the amount paid out to ESOP participants following Tidyman’s merger with SuperValu? ¶5 Did the District Court err in awarding prejudgment interest from January 4, 2013? FACTUAL AND PROCEDURAL BACKGROUND ¶6 This is the second time this case has come before us. We set forth the underlying facts in Tidyman’s I, and we will not repeat them here. In Tidyman’s I, we affirmed the District Court’s finding that NUFI unjustifiably refused to defend its insured, Davis and Maxwell, and was therefore estopped from denying coverage. Tidyman’s I, ¶ 33. However, we reversed the District Court’s entry of summary judgment to the extent it approved a stipulated judgment of $29 million, and remanded for the District Court to hold a hearing to assess the reasonableness of the settlement amount. Tidyman’s I, ¶ 44. On remand, we deferred to the District Court to set 4 the parameters of the reasonableness hearing, and to determine whether and to what extent further discovery was warranted. Tidyman’s I, ¶ 44. We also instructed that the burden of establishing the unreasonableness of the stipulated judgment would rest with NUFI. Tidyman’s I, ¶ 44. ¶7 The District Court determined that additional but limited discovery was necessary prior to a hearing on reasonableness, so it opened discovery for the narrow purpose of obtaining information regarding the reasonableness of the underlying judgment. The District Court then held a reasonableness hearing on January 28-30, 2015. Following the hearing, the District Court concluded that “Maxwell and Davis were justified in settling for the amount of $29 million based [on] their knowledge of Plaintiffs’ claims and their exposure to financial ruin created by NUFI’s failure to defend.” The District Court therefore found that NUFI had not borne its burden to prove the stipulated judgment was unreasonable, and entered judgment against NUFI for $29 million. NUFI appeals. STANDARD OF REVIEW ¶8 This Court reviews de novo issues of law, including a district court’s decision about which legal standard to apply in assessing the reasonableness of a stipulated judgment. Tidyman’s I, ¶ 13; see e.g. Seltzer v. Morton, 2007 MT 62, ¶ 152, 336 Mont. 225, 154 P.3d 561 (holding that we review de novo a district court’s application of certain “guideposts” in assessing whether a jury’s punitive damages verdict is “grossly excessive”). The decision to grant or deny prejudgment interest is also reviewed de novo. Tidyman’s I, ¶ 13. 5 DISCUSSION ¶9 Did the District Court err in using a “reliable evidence” test to assess the reasonableness of the stipulated judgment? ¶10 In Tidyman’s I, we concluded that “further consideration is necessary to determine whether the 29 million dollar stipulated settlement is reasonable, in light of the questions NUFI has raised.” Tidyman’s I, ¶ 44. Among the questions raised by NUFI were whether the $29 million figure was unreasonable “because it was based only on unsworn opinions of experts whom plaintiffs retained and paid and who have never been cross-examined by [NUFI’s] counsel” (internal quotations omitted); because “no buyer had been identified at the price TMSI’s financial advisor, Zachary Scott, suggested the corporation might bring if sold to another chain—the figure on which the 29 million dollars is based”; because “the settlement amount is magnitudes greater than the amount for which the plaintiffs had settled with other directors and the amount the plaintiffs had offered Davis himself in settlement”; and because “the plaintiffs’ own numbers reveal that Zachary Scott opined that the value of the corporation as a standalone entity was 11 million dollars.” Tidyman’s I, ¶ 42. With these questions in mind, we reversed the District Court’s entry of summary judgment to the extent it approved of the $29 million sum, and remanded for a hearing focused on the reasonableness of the settlement amount. Tidyman’s I, ¶ 44. ¶11 On remand, the District Court articulated its own subjective standard for assessing the reasonableness of the settlement amount: To determine whether the stipulated settlement is within the range of reasonableness, the Court has considered reasonableness from the perspective of the insured at the time of the stipulation, whether the information relied upon possessed sufficient indicia of reliability and whether the damages represented might naturally have been expected to result from the breach of the duty to defend. 6 Over the course of a three day hearing, the District Court received evidence and testimony from Plaintiffs and NUFI. Although the District Court allowed testimony from NUFI’s expert that the stipulated settlement was not reasonable because it exceeded his assessment of the value of the company prior to the insurer’s breach of the duty to defend, the District Court found that this perspective “fail[ed] to account for the measure of damages for the breach of the duty to defend.” The District Court, citing State Farm Mut. Auto. Ins. Co. v. Freyer, 2013 MT 301, ¶ 35, 372 Mont. 191, 312 P.3d 403, concluded that “[w]here an insurer has left its insured on its own to challenge liability, the insurer should not be able to reach back and interject itself in a controversy it has sidestepped to void a deal the insured has entered into to eliminate personal liability.” Reasoning that NUFI had lost the right to litigate the merits of the underlying case, the court therefore largely precluded the parties from conducting discovery or introducing evidence on matters related to the merits of the case. ¶12 However, as NUFI argues on appeal, by failing to consider the merits and value of the underlying case in assessing the reasonableness of the settlement amount, the District Court failed to comply with our instructions on remand. Instead of considering the challenges to reasonableness raised by NUFI and highlighted in our opinion in Tidyman’s I, the District Court based its conclusion that the settlement was reasonable on its assessment that “[t]he materials relied up[on] by Plaintiffs and Maxwell and Davis possess sufficient indicia of reliability.” We have previously stated that “[t]he insurer, even when in breach of its obligations to its insured, is entitled to have the district court make a determination of the reasonableness of a settlement entered by the insured.” Abbey/Land LLC v. Interstate Mechanical, Inc., 2015 MT 77, ¶ 12, 378 Mont. 372, 345 P.3d 1032 (citing Tidyman’s I, ¶ 41). The District Court did not actually assess the reasonableness of the settlement in this case, but rather sought to determine whether the $29 7 million amount had some grounding in reliable evidence from the perspective of Davis and Maxwell. We therefore remand this case for a second hearing on the reasonableness of the stipulated settlement. On remand, the District Court shall assess reasonableness using the standard set forth below. ¶13 NUFI and amicus curiae Montana Defense Trial Lawyers urge this Court to announce a requirement that “the settlement amount be analyzed from the perspective of the objective merits of the case and not from the subjective perspective of whether the insured was justified in accepting a release of liability in exchange for whatever the plaintiff requested” (emphasis in original). In support of this approach, NUFI cites cases from several of our sister states that analyze the merits of the underlying case, the plaintiff’s theory of liability and damages, the strength of available defenses, and the risks and expenses to both parties of continued litigation in order to determine the reasonableness of a stipulated settlement amount. See e.g. Bird v. Best Plumbing Grp., LLC, 287 P.3d 551, 556 (Wash. 2012); Great Divide Ins. Co. v. Carpenter, 79 P.3d 599, 613 (Alaska 2003); Himes v. Safeway Ins. Co., 66 P.3d 74, 85 (Ariz. Ct. App. 2003); Associated Wholesale Grocers v. Americold Corp., 934 P.2d 65, 87 (Kan. 1997). However, none of the cases cited by NUFI involved an insurer’s breach of the duty to defend its insured. NUFI is untroubled by this dissimilarity; according to NUFI, the fact that an insurer breached its duty to defend its insured is not relevant to an assessment of the value of the underlying case. ¶14 All parties agree that a reasonableness hearing should be conducted objectively from the point of view of a prudent person in the position of the insured defendant. See e.g. Miller v. Shugart, 316 N.W.2d 729, 735 (Minn. 1982). But as Plaintiffs and amicus curiae Montana Trial Lawyers Association point out, in a case in which there has been a breach of the duty to defend, such a defendant is no longer an insured defendant and is faced with personal responsibility for a 8 potentially very large sum. We agree with Plaintiffs that a breach of the duty to defend is a factor that a prudent person in the position of the defendant would consider when determining what settlement amount is acceptable to him or her. In other words, an objective standard of reasonableness should account for a prudent assessment of the merits and value of the plaintiff’s case, but also for the position in which the defendant has been left following an insurer’s breach of the duty to defend. No prudent defendant would fail to consider the latter circumstance. On the other hand, it should not be the court’s objective to further punish the insurer for its failure to defend its insured. The insurer has already suffered the consequences of its failure to defend by having lost the right to invoke insurance contract defenses as well as the right to assert its policy limits. ¶15 On remand, the District Court shall employ an objective standard for assessing reasonableness. We borrow the Minnesota Supreme Court’s articulation of such a standard— “The test as to whether the settlement is reasonable and prudent is what a reasonably prudent person in the position of the defendant would have settled for on the merits of plaintiff’s claim. This involves a consideration of the facts bearing on the liability and damage aspects of plaintiff’s claim, as well as the risks of going to trial.” Miller, 316 N.W.2d at 735—but we note that in cases such as the one before us, a “reasonably prudent person in the position of the defendant” does not have the benefit of insurance coverage. Therefore, in assessing the reasonableness of a stipulated settlement when there has been a breach of the insurer’s duty to defend, a district court should objectively consider both the merits of the underlying case and the value to a prudent uninsured defendant of confessing judgment in exchange for a covenant not to execute. If after applying this objective standard the District Court finds $29 million to be a reasonable settlement amount, it shall enter findings of fact establishing the reasonableness and 9 judgment in favor of Plaintiffs for $29 million. If the District Court finds $29 million to be an unreasonable amount, it shall enter findings of fact and conclusions of law to that effect and reject the settlement. ¶16 On a final note, although the District Court retains discretion to determine what evidence to admit or refuse in a reasonableness hearing, it cannot refuse to consider material and relevant evidence. Cartwright v. Equitable Life Assurance Soc’y of the United States, 276 Mont. 1, 19, 914 P.2d 976, 987-88 (1996) (citing M. R. Evid. 401, 402). We determined in Tidyman’s I that the questions NUFI raised about the valuation of the corporation are relevant to an assessment of the reasonableness of the stipulated settlement, so the District Court should allow additional discovery on and consider such evidence during the second reasonableness hearing. Tidyman’s I, ¶¶ 42, 44. ¶17 In his Dissent, Justice Wheat argues that remand for another reasonableness hearing is not necessary because the court listened to extensive testimony on the valuation of the company during the reasonableness hearing. It is true that NUFI presented such testimony, but the court rejected the valuation testimony offered by its witnesses because it “fail[ed] to account for the measure of damages for the breach of duty to defend.” Because we previously found that NUFI was estopped from denying coverage for unjustifiably refusing to defend its insureds, any measure of damages for breach of the duty to defend has no place in an ensuing reasonableness analysis. The court said it would consider reasonableness “from the perspective of the insured at the time of the stipulation,” and indeed, it was only such evidence to which the court gave credence. As noted in ¶ 11 but side-stepped by both Dissents, the District Court concluded that NUFI had lost the right to litigate the merits of the underlying case. What we are directing the court to do on remand is determine value based both on an objective determination of where the 10 stipulated settlement is within a reasonable range of what an arms’-length negotiation would have produced and the value to a prudent uninsured defendant of confessing judgment. The court erred as a matter of law in subjectively considering valuation solely from the perspective of the uninsured defendants. ¶18 Did the District Court err by not deducting from the $29 million judgment the amount paid out to ESOP participants following Tidyman’s merger with SuperValu? ¶19 NUFI argues that the $29 million judgment is “based on impermissible double counting.” Some retirees who retired after Tidyman’s 1998 merger with SuperValu received payouts from the employee stock ownership plan (ESOP), and some of those retirees are now plaintiffs in this case. NUFI alleges that these retirees are “double counting” damages by accepting the ESOP payments and seeking damages in this case. NUFI argues that the $29 million judgment should be reduced by at least $7 million, the minimum amount paid out to ESOP participants after the merger. Plaintiffs counter that NUFI’s argument is based upon a “mischaracterization of the relationships between the parties and the different Tidyman’s entities.” According to Plaintiffs, $29 million is the amount of damage done by Davis and Maxwell to TMSI (the entity formed in the merger), and whether retirees are entitled to any of that money as employee owners of the company is a wholly separate issue governed by the terms of the ESOP and federal ERISA law. We agree with Plaintiffs. ¶20 By definition, a stipulated or consent judgment is not a court’s or a jury’s calculation of actual damages to which individual plaintiffs are entitled, but rather the amount for which two parties have freely agreed to settle a claim. As we have said before, “[a] consent judgment is ‘a judgment, the provision and terms of which are settled and agreed to by the parties to the action.’ A judgment by consent or stipulation of the parties is construed as a contract between them embodying the terms of the judgment. It operates to end all controversy between the parties, 11 within the scope of the judgment.” First Bank, (N.A.) v. District Court for Fourth Judicial Dist., 226 Mont. 515, 523, 737 P.2d 1132, 1137 (1987) (quoting Black’s Law Dictionary (5th ed.) at 436); see also Linder v. Missoula County, 251 Mont. 292, 296, 824 P.2d 1004, 1004 (1992). Indeed, this reality is one of the reasons courts conduct a reasonableness hearing in the case of a stipulated settlement: “in these types of negotiations . . . there is no assurance that the settlement represents a proper calculation of actual damages.” Tidyman’s I, ¶ 40. ¶21 The $29 million judgment in this case is a stipulated judgment, freely agreed to by Davis and Maxwell and Plaintiffs, and approved by the District Court. While the stipulated judgment is subject to an overall reasonableness assessment, it was not the result of a precise damages calculation performed by the District Court, so it does not account for deductions, credits, or offsets claimed by the insurer but not stipulated to by both parties. The question is simply “whether the settlement amount stipulated to is reasonable.” Tidyman’s I, ¶ 40. On remand, and after considering the valuation evidence presented, the District Court may decide to take into account the ESOP payouts in assessing the reasonableness of the settlement amount. However, because we are addressing a settlement here and not a trial recovery subject to statutory offsets, we conclude that the District Court did not err in declining to engage in the reductions and collateral source offsets urged by NUFI that are typical of post-trial adjustments in tort recovery actions. ¶22 Did the District Court err in awarding prejudgment interest from January 4, 2013? ¶23 We said in Tidyman’s I that “the District Court correctly determined the plaintiffs were entitled to pre-judgment interest beginning on January 4, 2013, when the court approved the stipulated settlement agreements and entered judgment in the plaintiffs’ favor.” Tidyman’s I, ¶ 53. Following our remand and the first reasonableness hearing, the District Court complied 12 with our instructions and granted the Plaintiffs prejudgment interest from January 4, 2013. However, we reached the conclusion that Plaintiffs were entitled to prejudgment interest from the day the $29 million stipulated settlement was approved even though we reversed the judgment approving the settlement amount and remanded the case for a reasonableness hearing. Tidyman’s I, ¶ 50. This was in error. Plaintiffs would have been entitled to postjudgment interest, not prejudgment interest, from the day the District Court approved the settlement, but only if we had affirmed the amount of the judgment. Section 25-9-205, MCA; M. R. App. P. 19(4); Tipp v. Skjelset, 1998 MT 263, ¶¶ 16-19, 291 Mont. 288, 967 P.2d 787. ¶24 We take this opportunity to clarify that Plaintiffs are not entitled to prejudgment interest from January 4, 2013, because interest accruing after that date—the date of the court’s judgment—would by definition be postjudgment and not prejudgment interest. Rather, Plaintiffs may be entitled to postjudgment interest according to the instructions below. ¶25 The Montana Rules of Appellate Procedure provide that “[i]f a judgment for money in a civil case is affirmed, whatever interest is allowed by law shall be payable from the date the judgment was rendered or made in the district court,” but if, as is the case here, “a judgment is modified or reversed with a direction that a judgment for money be entered in the district court, the mandate shall contain instructions with respect to allowance of interest.” M. R. App. P. 19(4). We have instructed before that In those cases in which a money judgment rendered in the district court is reversed, modified, or vacated on appeal, with the consequence that the district court is directed to enter an entirely new judgment no portion of which is discreetly identifiable from the original verdict or judgment, then interest on the new judgment shall begin to accrue only from the date the new judgment is entered on remand pursuant to this Court’s direction. Woods v. Burlington N. & Santa Fe Ry. Co., 2004 MT 384, ¶ 10, 325 Mont. 106, 104 P.3d 1045. Therefore, if following our remand and a second reasonableness hearing the District Court 13 approves the stipulated settlement, Plaintiffs will be entitled to postjudgment interest from the day of the new judgment, but not from the days on which the District Court approved the settlement the first and second times. Plaintiffs are not entitled to prejudgment interest, and we and the District Court erred in so holding. CONCLUSION ¶26 For the foregoing reasons, we remand the case to the District Court for a second hearing to determine the reasonableness of Davis and Maxwell’s decision to settle with the Plaintiffs for $29 million in exchange for a covenant not to execute. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ BETH BAKER /S/ JIM RICE Justice James Jeremiah Shea, concurring in part and dissenting in part. ¶27 I concur with the Court’s disposition of Issues 2 and 3. I also agree with the standard the Court establishes for assessing the reasonableness of a stipulated settlement when there has been a breach of the duty to defend. Opinion, ¶ 15. However, I agree with Justice Wheat’s observation that the standard the Court articulates here is only a slight degree of separation from the standard applied by the District Court in the first reasonableness hearing. I also disagree with the Court’s conclusion that the District Court failed to consider the challenges to reasonableness raised by NUFI and highlighted 14 in our opinion in Tidyman’s I. Therefore, I dissent from the Court’s conclusion on Issue 1 that this case should be remanded for a second reasonableness hearing. ¶28 The Court begins its analysis of Issue 1 by noting that in Tidyman’s I we concluded that “further consideration is necessary to determine whether the 29 million dollar stipulated settlement is reasonable, in light of the questions NUFI has raised.” Opinion, ¶ 10 (quoting Tidyman’s I, ¶ 44). The Court then states that “[i]nstead of considering the challenges to reasonableness raised by NUFI and highlighted in our opinion in Tidyman’s I, the District Court based its conclusion that the settlement was reasonable on its assessment that ‘[t]he materials relied up[on] by Plaintiffs and Maxwell and Davis possess sufficient indicia of reliability.’” Opinion, ¶ 12. In fact, the District Court specifically noted its obligation to consider the reasonableness of the stipulated settlement in light of the challenges raised by NUFI and highlighted in Tidyman’s I, 4th Judicial Dist. Ct., Or., p. 4 (May 12, 2015) (hereinafter, “Order”), and addressed those challenges in Findings of Fact 89 through 92, Order, pp. 39–42. I believe the Court’s characterization of the District Court’s reasonableness assessment gives short shrift to the work the District Court did in the first reasonableness hearing. ¶29 To the extent that the Court suggests that the standard applied by the District Court in the first reasonableness hearing was deficient as compared to the standard the Court articulates in this Opinion, I submit the differences are, at most, semantic. In the first reasonableness hearing, the District Court applied the following standard for assessing the reasonableness of the settlement amount: 15 To determine whether the stipulated settlement is within the range of reasonableness, the Court has considered reasonableness from the perspective of the insured at the time of the stipulation, whether the information relied upon possessed sufficient indicia of reliability and whether the damages represented might naturally have been expected to result from the breach of the duty to defend. Order, p. 7. The Court criticizes this standard as “subjective” and instructs the District Court to employ the following standard when conducting yet another reasonableness hearing on remand: [I]n assessing the reasonableness of a stipulated settlement when there has been a breach of the insurer’s duty to defend, a district court should objectively consider both the merits of the underlying case and the value to a prudent uninsured defendant of confessing judgment in exchange for a covenant not to execute. Opinion, ¶ 15. A comparison of the two standards, however, evinces little, if any, substantive difference. ¶30 Broken down to its discrete elements, the reasonableness standard the District Court applied in the first reasonableness hearing has three parts: (1) consider reasonableness from the perspective of the insured at the time of the stipulation; (2) assess whether the information relied upon in arriving at the stipulated settlement amount possessed sufficient indicia of reliability; and (3) determine whether the damages represented might naturally have been expected to result from the breach of the duty to defend. So how do these elements compare to the standard the Court instructs the District Court to apply in the second reasonableness hearing? ¶31 First, if considering reasonableness from the perspective of the insured at the time of the stipulation is a subjective standard, I fail to see how it is any more subjective than 16 determining reasonableness by considering “the value to a prudent uninsured defendant of confessing judgment in exchange for a covenant not to execute,” which is what the Court instructs the District Court to do in the second reasonableness hearing. The perspective that the District Court considered in the first reasonableness hearing was Maxwell and Davis’s perspective as defendants who were left without “the benefit of insurance coverage” due to NUFI’s breach, a factor this Court says is an appropriate consideration, Opinion, ¶ 15. The District Court considered Maxwell and Davis’s perspective “at the time of the stipulation,” because that is the time when, to borrow the language the Court uses in the new standard, Maxwell and Davis “confess[ed] judgment in exchange for a covenant not to execute.” I view these elements as substantively the same. ¶32 Second, the District Court considered whether the information relied upon in arriving at the stipulated settlement possessed “sufficient indicia of reliability.” Again, I view this as substantively the same as the Court’s directive that the District Court should “objectively consider . . . the merits of the underlying case.” The information relied upon by the parties in arriving at the stipulated settlement included the merits of the underlying case, at least as those merits had been developed by the time Maxwell and Davis “confess[ed] judgment in exchange for a covenant not to execute.” In that regard, it should be borne in mind that among the “benefit[s] of insurance coverage” that Maxwell and Davis were denied because of NUFI’s breach was the provision of defense costs necessary to develop the merits of the underlying case. Since NUFI’s breach deprived Maxwell and Davis of the means and wherewithal to develop the merits of their defense, 17 they had to play the cards they were dealt. Nevertheless, the District Court recognized that it would be unreasonable to allow Maxwell and Davis to just sign off on any amount in exchange for a covenant not to execute. This is why the District Court objectively evaluated the information upon which the settlement was based to confirm that it “possessed sufficient indicia of reliability.” ¶33 Finally, the District Court assessed “whether the damages represented might naturally have been expected to result from the breach of the duty to defend.” By incorporating this element into its reasonableness analysis, the District Court was merely incorporating the well-established principle that when an insurer breaches the duty to defend, it is liable for all damages flowing from the breach, including consequential damages, which we have defined as damages “such as might naturally be expected to result from” the breach. Freyer, ¶ 42 (quoting Mont. Petroleum Tank Release Comp. Bd. v. Crumleys, Inc., 2008 MT 2, ¶ 64, 341 Mont. 33, 174 P.3d 948). This third element does not have a corollary requirement in the standard the Court instructs the District Court to use in the second reasonableness hearing. I would submit, therefore, that the District Court’s incorporation of a consequential damages element if anything made the District Court’s reasonableness standard more demanding than the standard it is now instructed to use in the second reasonableness hearing. Therefore, I cannot see how this provides a basis for reversal. ¶34 After this matter was remanded the first time, the District Court followed our instructions and allowed additional discovery, conducted a three day reasonableness hearing, and then issued a thorough Order in which it answered the questions that were 18 set forth in Tidyman’s I. Now, the Court remands for a second reasonableness hearing with instructions to apply a standard I find to be either substantively the same as, or less stringent than, the standard the District Court applied during the first reasonableness hearing. Therefore I dissent as to the Court’s resolution of Issue 1. I concur with the Court’s resolution of Issues 2 and 3. /S/ JAMES JEREMIAH SHEA Justice Michael E Wheat, concurring in part and dissenting in part. ¶35 I concur with the Court’s disposition of Issues 2 and 3. However, I disagree with the Court’s conclusion on Issue 1 that this case should be remanded for a second reasonableness hearing. In my opinion the Court is improperly interjecting its judgment in the place of the District Court by requesting the District Court repeat what has already been accomplished. ¶36 In Tidyman’s I we directed the District Court to conduct a “hearing focused on the reasonableness of the settlement amount,” with the burden of establishing unreasonableness of the judgment on NUFI. Tidyman’s I, ¶¶ 44, 50. We directed the court to set the parameters of the hearing at its discretion as to the need for the further discovery of pertinent information related to the limited scope of the remand. Tidyman’s I, ¶ 44. The directive we gave to the District Court was to follow the mandate of § 27-1-302, MCA, that settlement amounts in civil cases must be reasonable. We were explicit and clear that in this case, where the insurer elected to deny coverage and breached its duty to defend its insureds, no further analysis of whether there was 19 coverage under the policy was necessary or acceptable under the law. Tidyman’s I, ¶¶ 28, 30, 33. (“If we were to hold the District Court in error for failing to analyze coverage . . . we would be providing insurers with an avenue to circumvent the clear requirement imposed by our precedent that where the insurer believes a policy exclusion applies, it should defend under a reservation of rights and seek a determination of coverage through a declaratory judgment action.” Tidyman’s I, ¶ 28.) We determined that the District Court was obligated under the law to determine only the substantive reasonableness of the stipulated settlement amount without evaluating the underlying policy coverage or any inquiry into potential collusion, as we determined it did not exist in this case. Tidyman’s I, ¶¶ 28, 50. ¶37 The Court now articulates a standard borrowed from the Minnesota Supreme Court to be used in this case to determine whether a settlement amount is reasonable. Opinion, ¶ 15. This standard includes the consideration of the liability and damage aspects of the Plaintiffs’ case, including the risks of going to trial, and in this case, a consideration of the insurer’s breach of its duty to defend its insureds. Opinion, ¶ 15. Yet, we have already determined that the settlement should be given the presumption of reasonableness, and the burden is on defendant NUFI to show unreasonableness. Tidyman’s I, ¶ 41. The Court now asks the District Court to inquire into NUFI’s questions of unreasonableness, which are almost exclusively based on issues involving the valuation of the corporation, under what it calls an objective standard when the court already conducted a three-day hearing and listened to testimony on those very issues. 20 ¶38 We have often repeated the maxim that district courts have broad discretion to make determinations related to evidence, which we rightfully review only for the abuse of this discretion. Watkins v. Williams, 265 Mont. 306, 311, 877 P.2d 19, 21-22 (1994). The abuse of discretion inquiry is “not whether this Court would have reached the same decision, but, whether the district court acted arbitrarily without conscientious judgment or exceeded the bounds of reason.” Chipman v. Northwest Healthcare Corp., 2012 MT 242, ¶ 17, 366 Mont. 450, 288 P.3d 193 (quoting Newman v. Lichfield, 2012 MT 47, ¶ 22, 364 Mont. 243, 272 P.3d 625) (emphasis added). ¶39 Even if an insurer breaches its duty to its insured, it is still entitled to have a district court make a determination of the reasonableness of a settlement; however the settlement is presumed to be reasonable unless the insurer is able to show evidence of the lack of reasonableness. Abbey/Land LLC, ¶ 17; Tidyman’s I, ¶ 41. In this case, the District Court conducted a three-day hearing, and heard and evaluated the evidence presented by both sides. The evidence included testimony from various experts offered by both sides regarding the valuation of the company. NUFI has consistently argued that without a buyer the settlement amount in this case is a pie-in-the-sky scenario and therefore unreasonable. However, the court heard testimony that the existence of a buyer is not the determinative factor in the valuation of a company. The Plaintiffs presented evidence, NUFI presented evidence, and the court then evaluated the evidence to determine that NUFI did not meet its burden to overcome the presumption of reasonableness. But this Court is now asking the District Court to go back once again, sift through the same evidence and apply a new standard, which in my opinion in this 21 case, is only a slight degree of separation from what the court has already done pursuant to our direction upon initial remand. Because this is a stipulated settlement the court has one of two options: accept or reject the settlement amount. Opinion, ¶ 15. We have already determined that there is no proof of collusion between the Plaintiffs and Maxwell and Davis, and the record shows that the settlement amount was derived from the conservative end of an independent valuation of the company—the assessment that was available to defendants Maxwell and Davis at the time of the settlement negotiations. ¶40 The Court now requires the District Court to employ a new objective standard— whether a reasonably prudent person in the position of the defendant would have settled, taking into consideration the liability and damage aspects of the claims, the risks of going to trial, and the lack of insurance coverage—but to what end? Not to conduct a trial on the merits of Plaintiffs’ claims and allow NUFI to reach back and interject itself into the litigation it chose to avoid when it left its insureds on their own to challenge the litigation, in direct contravention of our case law. Farmers Union Mut. Ins. Co. v. Staples, 2004 MT 108, ¶ 28, 321 Mont. 99, 90 P.3d 381. Nor to make a determination of fraud or collusion, in direct contravention of our findings in Tidyman’s I. Nor to independently monetize each individual aspect of the considerations included in the objective standard, which would be an absurd and untenable exercise. NUFI was given the opportunity to provide its best evidence of the unreasonableness of the stipulated judgment and it simply failed to meet its burden. In my view the Court is in error by effectively interjecting its judgment into this case and allowing NUFI a second bite at the apple to attempt to substantiate the arguments it has already failed to adequately 22 substantiate. I believe the Court has improperly lost sight of the settlement’s presumption of reasonableness. ¶41 The Court also indicates using the proposed objective standard will avoid further punishing the insurer for its failure to defend its insureds because the “insurer has already suffered the consequences of its failure to defend by having lost the right to invoke insurance contract defenses as well as the right to assert its policy limits.” Opinion, ¶ 14. While I agree that the District Court should not seek to further punish NUFI, an additional consequence of its failure to defend Maxwell and Davis is the loss of its ability to negotiate the settlement at the time its insureds entered into a settlement agreement with the Plaintiffs. There is little doubt that if NUFI would have chosen differently and opted to defend Maxwell and Davis that the settlement negotiations would have ended with a different result. To that I reiterate the sentiment we noted in Tidyman’s I: so what? Without collusive wrongdoing, the result is a consequence of NUFI’s failure to defend its insureds. Tidyman’s I, ¶ 48. I believe with this Opinion the Court is now allowing NUFI too great an opportunity to meddle in the settlement negotiations it was excluded from by its own choice. In my opinion, the District Court followed our directive in Tidyman’s I to allow NUFI an opportunity to rebut the presumption of reasonableness of the stipulated judgment, where we explicitly allowed it to set the parameters of the hearing including conducting further discovery, and reached a conclusion that was neither arbitrary, nor exceeded the bounds of reason, and should be affirmed. Tidyman’s I, ¶ 44. It is the District Court’s duty, not this Court’s, to determine the facts, and weigh the credibility of the evidence presented before it to make reasoned findings and we should not supplant its 23 judgment with our own. If the Court desires to adopt a new objective standard for district courts to apply in cases such as these, at most we should do so in this Opinion and find any error that occurred on remand to be harmless because the court did what we asked of it in Tidyman’s I and the result did not create reversible error. ¶42 For the foregoing reasons, I respectfully dissent from the Court’s disposition of Issue 1 regarding the remand of this case for a second reasonableness hearing. I concur with the majority on Issues 2 and 3 of this Opinion. Therefore, I would affirm the District Court’s order as to Issues 1 and 2. /S/ MICHAEL E WHEAT

August 23, 2016

b395521b-718b-4723-aff6-77f5897d1d62

State v. Pierce

2016 MT 308

DA 14-0071

Montana

Montana Supreme Court

DA 14-0071 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 308 STATE OF MONTANA, Plaintiff and Appellee, v. ROBERT PIERCE, Defendant and Appellant. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Anaconda-Deer Lodge, Cause No. DC-12-29 Honorable Brad Newman, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Eileen A. Larkin, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Ben Krakowka, Anaconda-Deer Lodge County Attorney, Dan Guzynski, Mary E. Cochenour, Special Deputy County Attorneys, Helena, Montana Submitted on Briefs: September 21, 2016 Decided: November 29, 2016 Filed: __________________________________________ Clerk 11/29/2016 Case Number: DA 14-0071 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Robert Pierce appeals from the order entered in the Third Judicial District Court, Anaconda-Deer Lodge County, denying his motions for discovery sanctions and for mistrial. Pierce was convicted by a jury of sexual intercourse without consent and sexual assault involving his step-granddaughter, M.R., who was age nine and eleven at the time of the offenses. We affirm. ¶2 Pierce presents the following issues for review: 1. Whether the District Court abused its discretion when it denied Pierce’s request for continuance. 2. Whether the District Court abused its discretion when it denied Pierce’s motion for mistrial. FACTUAL AND PROCEDURAL BACKGROUND ¶3 M.R.’s father died prior to her birth in 1998 and M.R. was raised by her mother Malissa (Mother). M.R.’s paternal grandmother (Grandmother) and Grandmother’s husband (Pierce) assisted Mother with raising M.R and her siblings. M.R. frequently spent weekends and holidays with Pierce and Grandmother; camped together; hunted together; and did many family activities together. ¶4 On February 5, 2012, when M.R. was fourteen, Mother had a Super Bowl party that Grandmother and Pierce attended. Mother noticed that M.R. was distant and cross towards her. M.R. was on the phone with her boyfriend during the party and was told by her boyfriend that she was a “prude.” The accusation prompted M.R. to respond to her boyfriend that she had been touched by Pierce. Following this disclosure, M.R.’s boyfriend insisted that M.R. tell her mother or, alternatively, that he would tell M.R.’s 3 mother the next day. After everyone left the party, M.R. told Mother about Pierce’s abuse. ¶5 M.R. disclosed to Mother that Pierce first touched her when she was in the third grade while M.R. was visiting at Grandmother’s home. M.R. was alone playing video games when Pierce sat down next to her. Pierce unbuttoned M.R.’s pants, held her down with one hand, slipped his other hand down her pants, and put his fingers inside of her. When M.R. struggled, Pierce held her down and covered her mouth when she tried to scream for Grandmother. Pierce told M.R. not to tell anybody because he would get into a lot of trouble. M.R. described that “it hurt really bad” when Pierce touched her vagina, and she had trouble urinating later “because it burned so bad.” M.R. could feel Pierce’s penis touching her leg through his pants. Afterwards, M.R. ran downstairs and sat with Grandmother, but M.R. did not tell Grandmother what Pierce had done. ¶6 M.R. also disclosed to Mother two other incidents when Pierce abused her. These incidents occurred when the family was traveling. Once, in a Missoula hotel, M.R. was sleeping in bed with Grandmother and Pierce. Grandmother was facing away from M.R. and Pierce began to suck on M.R.’s breasts. M.R. responded by moving to the other side of Grandmother in the bed. The second time was at a hotel in Kalispell. While in bed with Grandmother and Pierce, Pierce touched M.R.’s breasts and placed her hand on his penis. M.R. again moved, but this time M.R. got into a different bed with her brother. ¶7 Following these disclosures, Mother testified M.R. sat in her arms and they both held each other and cried through the night. That morning, Mother called her friend, Assistant Chief of Police of Anaconda, Bill Sather (Sather), asking for guidance. Mother 4 testified she “had no idea what to do, and [she] knew he would have some options.” Sather informed Mother that he was a mandatory reporter and advised Mother to tell Grandmother of M.R.’s disclosures. ¶8 After speaking with Sather, Mother called her family counselor, Heidi Matlack-Larson (Matlack-Larson), who similarly informed Mother that she was a mandatory reporter. Matlack-Larson advised Mother to tell Grandmother of M.R.’s disclosures. Pierce was in Las Vegas at the time so Mother went over to Grandmother’s home and told her what M.R. had said. Both agreed that they should confront Pierce together, but were unable to reach him on the phone. Later, after Mother had left Grandmother’s home, Grandmother spoke to Pierce and told Pierce of M.R.’s disclosures. Grandmother’s conversation with Pierce occurred before Mother or M.R. had confronted Pierce about M.R.’s disclosures. ¶9 After Mother learned of Grandmother’s conversation with Pierce, Mother called Pierce herself. Pierce said that M.R. was lying and had made up her story because of peer pressure; specifically, that M.R.’s friends were talking about being molested or M.R.’s boyfriend set M.R. up to tell the story. Pierce was calm while talking to Mother and not angry. Mother explained to Pierce that if he admitted to M.R.’s allegations the family would get him help; but if he continued to deny M.R.’s allegations and “make my daughter out to be a liar, you will be prosecuted.” When Pierce learned that Mother had contacted Sather he became very angry. The phone call ended when Mother lost reception. 5 ¶10 M.R. became angry when she learned from Mother that Pierce had said she was lying. Mother and M.R. decided to call Pierce. When Pierce answered, M.R. did not tell him that Mother was also listening in on the phone call. M.R. asked Pierce why he was lying and would not just admit to what he had done to her. Pierce asked M.R. why she was bringing this up now and to whom M.R. had made her disclosures. Pierce told M.R. that this could ruin his career and it was killing Grandmother. Pierce suggested that maybe it was M.R. who had touched him, that he would turn the story around and tell people she had touched him, and that her life would be horrible if she continued to insist her story was true. Pierce threatened M.R. that he was in a tall building and that he might jump from the window. M.R. told Pierce he had a choice to admit that he did this to her, in which case they would get him help and the matter would end. Pierce insisted he did not abuse her. At this point, Mother took the phone from M.R. and accused Pierce of being a pervert, that he was going to die, that he would be prosecuted, and that she was calling the police. Mother hung up the phone. Pierce called back and said he would not admit to anything and “I sign [Sather’s] paychecks.” Mother then yelled at Pierce again and hung up. Soon afterwards, Sather picked up Mother and M.R. and took them to the police station where they provided written statements. ¶11 Sather initiated an investigation of Pierce. However, the case was quickly transferred to the Division of Criminal Investigation (DCI) due to Pierce’s position as Deer Lodge County Commissioner. DCI Agent Phil Matteson (Agent Matteson) was assigned to the case and made a physical copy of the County’s law enforcement file. The Anaconda-Deer Lodge County Department of Law Enforcement (A-DLCDLE) uses a 6 computer system named “Swift” to store investigative reports. After the investigation had begun, Sather produced a report (Sather Report) which was not included in the Swift program and apparently was also not contained within the physical file that Agent Matteson copied. Agent Matteson subsequently retired and the case was taken over by DCI Agent Sullivan. Agent Sullivan first discovered the Sather Report on April 16, 2013, just a few days before the scheduled trial date of April 22, 2013, when he went to retrieve a better copy of a different document from A-DLCDLE. Neither Agent Sullivan nor either party’s counsel had seen the Sather Report prior to April 16, 2013. Upon learning of the Sather Report, the State immediately filed a Notice of Compliance and provided a copy of the Sather Report to the defense. ¶12 In response to disclosure of the Sather Report, Pierce filed a motion for sanctions and requested additional time to locate and interview witnesses identified in the document.1 The District Court held a hearing on April 18, 2013, during which Agent Sullivan explained the contents of the Sather Report and discussed whether the substance of the information contained within the Sather report had already been provided to the defense. The Sather Report was admitted into evidence. The State could not explain why the Sather Report was not in the Swift program, why it was not part of the original copy of the Swift file, or how it subsequently was placed into the Swift file where Agent Sullivan discovered it. However, Agent Sullivan testified the only new information not previously disclosed to Pierce were alleged comments made by Chief Executive Officer 1 In the District Court, Pierce also asked for time to investigate the identity of persons in photos that the State had recently provided during discovery. Pierce does not raise any issues regarding these photos on appeal. 7 of Anaconda, Becky Guay (Guay), that Pierce was the “real victim” and that people presumed Pierce was “guilty until proven innocent.” Agent Sullivan testified that the information did not suggest that Guay had any personal knowledge about the case, and that it appeared her statements were merely her personal belief. Relying on State v. Golder, 2000 MT 239, 301 Mont. 368, 9 P.3d 635, the court held that the record did not support Pierce’s claim of undue surprise or prejudice and the court, accordingly, denied Pierce’s motion for sanctions. Pierce’s jury trial began on April 22, 2013. ¶13 During opening statements the State described the struggles M.R. had coming forward with her disclosures and how it similarly would be difficult for M.R. to continue to speak of her abuse at trial. The State explained that Mother wanted to keep M.R.’s disclosures within the family and that Mother told Pierce if he would admit to her and M.R. that he had committed the offenses the matter would be kept within the family. Pierce did not object at any time during the State’s opening statement. ¶14 The following morning Pierce moved for a mistrial. Pierce alleged the State’s opening statement improperly sought sympathy for M.R. and that the State sought to “comment, imply or otherwise impress upon the jury that the Defendant is somehow committing another crime, or further victimizing M.R. by not confessing when confronted by M.R. and her mother [ ] and by exercising his right to a trial.” The State argued that it permissibly summarized what actually happened and the evidence that would be presented. The State denied having suggested that Pierce should be punished for invoking his right to trial. The District Court denied Pierce’s motion for mistrial, 8 concluding the State had not acted improperly and had not commented on Pierce’s invocation of a constitutional right. ¶15 Pierce appeals the District Court’s denial of his motion for discovery sanctions, specifically the denial of a continuance, and Pierce’s motion for mistrial. STANDARDS OF REVIEW ¶16 We review a court’s imposition of sanctions and the admission of the material in controversy for an abuse of discretion. See Golder, ¶ 7. When reviewing a district court’s ruling on a motion for a continuance, we apply an abuse of discretion standard as well. State v. Toulouse, 2005 MT 166, ¶ 14, 327 Mont. 467, 115 P.3d 197. When a district court acts arbitrarily, without conscientious judgment or exceeds the bounds of reason it has abused its discretion. State v. Hernandez, 2009 MT 341, ¶ 7, 353 Mont. 111, 220 P.3d 25. A “district court cannot be overturned on appeal in absence of a showing of prejudice to the movant.” State v. Klemann, 194 Mont. 117, 120, 634 P.2d 632, 634, (1981). ¶17 We similarly review a district court’s denial of a motion for a mistrial for abuse of discretion. State v. Moree, 2010 MT 148, ¶ 11, 357 Mont. 24, 235 P.3d 585. We apply a deferential standard to the district court because the trial judge is in the best position to make the determination. Moree, ¶¶ 11, 18. 9 DISCUSSION ¶18 1. Whether the District Court abused its discretion when it denied Pierce’s request for continuance. ¶19 Pursuant to § 46-15-322(1)(a) and (c), MCA, the prosecution is required to provide a defendant with “the names, addresses, and statements of all persons whom the prosecutor may call as witnesses in the case in chief” and “all written reports or statements of experts who have personally examined the defendant or any evidence in the particular case . . . .” Failure to comply with discovery requirements subjects the prosecution to the possible imposition of sanctions pursuant to § 46-15-329, MCA. Relevant to Pierce’s request for a continuance, a “court may impose any sanction that it finds just under the circumstances, including but not limited to: . . . (2) granting a continuance . . . .” Section 46-15-329(2), MCA (emphasis added). ¶20 We have continuously recognized that the statutory language “may” in § 46-15-329, MCA, grants the court discretion regarding imposition of sanctions where there has been a failure to comply with a discovery order. Golder, ¶ 11. Such discretion allows the court to consider the reason why disclosure was not made, whether noncompliance was willful, the amount of prejudice to the opposing party, and any other relevant circumstances. Golder, ¶ 11, citing State v. Waters, 228 Mont. 490, 495, 743 P.2d 617, 621 (1987). ¶21 Here, the court noted that it was undisputed that the materials were immediately disclosed to the defense when DCI and the prosecution became aware of them. Further, the evidence presented by the State established that while the Sather Report had not been 10 disclosed prior to April 16, 2013, the information included in the Sather Report, with the exception of one item, had previously been made available to Pierce in a timely manner. The only portion of the Sather Report not previously disclosed were the comments made by Guay. Pierce does not allege how Guay’s comments surprised or unfairly prejudiced him, particularly since the comments did not involve new evidence or investigation about the case and appeared only to express Guay’s opinion or sympathy for Pierce. Furthermore, Pierce has failed to show how his inability to contact Guay has harmed his defense. There was no indication in the Sather Report that Guay might have had personal knowledge or aided the defense in any way. ¶22 Based upon the foregoing, we conclude the District Court did not abuse its discretion when it denied Pierce’s request for a sanction, in the form of a continuance, because the State’s failure to disclose the Sather Report was not willful and Pierce has failed to demonstrate prejudice or surprise. Significantly, the substance of Guay’s statements did not derive from first-hand knowledge and appeared to be merely Guay’s opinion. ¶23 2. Whether the District Court abused its discretion when it denied Defendant’s motion for mistrial.2 ¶24 When determining whether to grant or deny a motion for mistrial the trial court will look to whether a defendant has been denied a fair and impartial trial. State v. 2 The State argues that Pierce waived any objection to the prosecution’s opening statement because he did not raise a contemporaneous objection. Here, conversely, the State responded substantively in chambers to Pierce’s motion for mistrial which included discussion of the State’s opening statement. The State may not change its theory on appeal. State v. Anderson, 1999 MT 60, ¶ 25, 293 Mont. 490, 977 P.2d 983 (citation omitted). Accordingly, this Court will not entertain the State’s waiver argument on appeal. 11 Bollman, 2012 MT 49, ¶ 33, 364 Mont. 265, 272 P.3d 650. We apply a two-step process when determining if the defendant has been denied a fair and impartial jury trial. State v. Lindberg, 2008 MT 389, ¶ 25, 347 Mont. 76, 196 P.3d 1252. First, we consider whether the prosecutor’s comments were improper. Lindberg, ¶ 25. Next, we look to whether the improper comments prejudiced the defendant’s right to a fair trial. Lindberg, ¶ 25. ¶25 Pierce contends that the State made three improper comments or suggestions during opening statements: (1) the State misinformed the jury that the matter would have been kept in the family if Pierce admitted to M.R.’s allegations, (2) the State impermissibly burdened Pierce’s right to a jury trial by commenting that the jury trial was a result of his denial of M.R.’s allegations, and (3) the State was attempting to invoke sympathy for M.R. based on Pierce exercising his right to a jury trial. ¶26 Mother and M.R. testified that they wished to keep the matter within the family and to get Pierce help for his problems. Significantly, the State did not produce testimony that the State would have kept the incident within the family had Pierce not invoked his right to jury trial. The State appropriately allowed Mother and M.R. to testify it was their hope that the matter could be kept within the family. Mother’s testimony also explained why she delayed acting and reporting following M.R.’s disclosures and further explained the confrontation on the phone with Pierce in the presence of M.R. A consistent theme of the defense was to portray M.R. as lying about the allegations because of peer pressure and to avoid being considered a “prude” by her boyfriend. The testimony from M.R. and Mother refuted this attack on M.R.’s credibility by demonstrating M.R. was motivated to avoid exposure of the incidents and further 12 disclosures to the police, in addition to being required to potentially expose the matter to a jury. Pierce had the opportunity to cross-examine Mother and M.R. regarding the truthfulness of their statements and to attempt to undermine each’s credibility. The record establishes the State’s comments during opening statement were borne out by the evidence through the testimony of Mother and M.R.; that is, they both testified they wanted to avoid trial and to keep the matter within the family. The State was entitled to present this evidence as facts relevant to the presentation of its case and it was permissible for the State to provide an opening statement to the jury outlining the evidence it intended to present. ¶27 Pierce does not cite any specific failure of proof regarding the prosecution’s opening statement. While Pierce maintains that Mother could not have intended to “keep the matter within the family” because she had already alerted two mandatory reporters to the allegations, Mother testified at trial that she did not know at the time she spoke to Sather and Matlack-Larson what a mandatory reporter was. The prosecution’s statements about the consequences M.R. suffered as a result of making the allegations were supported by the evidence, to which Pierce did not object when the testimony was being produced. We conclude that Pierce has failed to meet his burden under the first prong of Lindberg—that the prosecution’s statements were improper—and for this reason the District Court did not abuse its discretion in denying Pierce’s motion for mistrial. ¶28 We feel one final matter cannot be ignored. This Court is obliged to review the entirety of the record and, upon doing so here, we were confronted with the following statement delivered by Pierce’s defense counsel during closing argument, “And for you 13 men, I know if you’ve ever tried to undress a woman, if she’s fighting you, you can’t get that done . . . .” While contained within closing argument and not prejudicial to Pierce’s defense, this statement nonetheless warrants attention. Not only does such a statement minimize sexual assaults, but it assumes men sitting on the jury have similarly committed sexual assaults. We can appreciate the position of the prosecution and the trial judge deciding not to object or comment on the inappropriateness of such a statement in front of the jury in the interest of avoiding a mistrial. However, we are not so constrained and will not allow the silence to be perpetuated and the statement to escape criticism. The trial judge and opposing counsel should never be placed in such a compromising position. Neither should a jury, who are unable to object or otherwise protest, be forced to suffer such an inappropriate suggestion. Dedicated representation does not include making statements minimizing sexual assaults or assuming male jurors have similarly committed sexual and criminal offenses. Nonetheless, we give defense counsel the gift of doubt that, at best, such a statement was carelessly uttered. CONCLUSION ¶29 The District Court did not abuse its discretion in denying Pierce’s request for a discovery sanction in the form of a continuance. The District Court similarly did not abuse its discretion in denying Pierce’s motion for mistrial. ¶30 Affirmed. /S/ LAURIE McKINNON 14 We Concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ JIM RICE

November 29, 2016

27f6fcf9-83e2-4f46-9c09-7d2492dbd2f4

In re Marriage of Scanlon

2016 MT 190

DA 15-0727

Montana

Montana Supreme Court

DA 15-0727 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 190 IN RE THE MARRIAGE OF: LONA ANN CARTER-SCANLON, Petitioner and Appellee, and JOSEPH D. SCANLON, Respondent and Appellant. APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDR-2000-373 Honorable Jeffrey M. Sherlock, Presiding Judge COUNSEL OF RECORD: For Appellant: Mark P. Yeshe, Attorney at Law, Helena, Montana For Appellee: David B. Gallik, Attorney at Law, Helena, Montana Submitted on Briefs: June 29, 2016 Decided: August 9, 2016 Filed: __________________________________________ Clerk 08/09/2016 Case Number: DA 15-0727 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Joseph Scanlon (Joseph) appeals from the denial of his motion to modify his child support obligation entered by the First Judicial District Court, Lewis and Clark County. ¶2 We affirm and address the following issue on appeal: Did the District Court abuse its discretion when it denied the motion to modify child support? PROCEDURAL AND FACTUAL BACKGROUND ¶3 This appeal is Joseph’s second attempt in as many years to modify his child support obligation for the two children he has with Lona Carter-Scanlon (Lona). We chronicled much of Joseph’s and Lona’s legal dispute, dating back to their 2003 divorce, in In re Marriage of Carter-Scanlon, 2014 MT 97, 374 Mont. 434, 322 P.3d 1033, and need not repeat that history here. ¶4 Joseph moved the District Court to modify his child support obligation on April 30, 2015. The basis for Joseph’s motion was that he had been determined to be “a person with a most significant disability” by Montana Vocational Rehabilitation (MVR), an agency of Montana’s Department of Public Health and Human Services. Joseph asked the District Court to lower his monthly payments from $814 per month to $21.50 per month per child. The District Court held a hearing on the matter on October 21, 2015. ¶5 At the hearing, Morgan Vincent, a vocational rehabilitation counselor with MVR, testified at length about Joseph’s condition. Ms. Vincent works with individuals who have disabilities and assists them in returning to employment and living independently. Ms. Vincent testified Joseph had been designated a person with “a most significant 3 disability,” which means he has a physical or mental impairment that constitutes or results in a substantial impediment to employment. Joseph and Ms. Vincent developed an employment plan for Joseph because, according to Ms. Vincent, Joseph was not able to do the work he had done in the past. The plan contemplated that Joseph would receive training to become an equine dentist. However, Ms. Vincent stated that Joseph needed surgery on his rotator cuffs, as well as neck surgery, and that the plan may need to be adjusted depending on the success of his surgeries. Ms. Vincent added that Joseph is “willing to pursue other employment if this career is not possible after he has undergone surgery,” and that “[d]epending on how [Joseph’s] treatment progresses, a vocational evaluation or training may be needed to either change his [employment plan] or progress towards his goal. These services will assist [Joseph], as his disabilities are currently changing, and help him with stability on his job.” Joseph’s physician did not testify, nor were Joseph’s medical records submitted to the court. ¶6 The District Court heard testimony from forensic CPA Nicholas Bourdeau, who opined that Joseph’s income was significantly higher than that reported on his tax returns. Bourdeau imputed Joseph’s income in 2015 to be $73,000. The District Court received testimony that Joseph had recently competed in, and won, the National Finals Ski Joring horse race in Red Lodge. The District Court also received evidence that Joseph had a 25% ownership stake in a 300-lot subdivision. ¶7 The District Court entered its findings of fact, conclusions of law, and order denying Joseph’s motion to modify child support. The District Court concluded there 4 was a change in Joseph’s circumstances “that significantly impacts his ability to pay $814 per month in child support,” but went on to conclude that “it does not appear that this condition is so substantial and continuing as to make the eventual payment of child support unconscionable.” The District Court stayed Joseph’s child support obligation for thirteen months, reasoning that “to make [Joseph] currently pay this amount when faced with his impending medical expense and retraining period would make it inequitable . . . .” After the stay of thirteen months, monthly child support would resume and Joseph would be required to pay off the child support accumulated during the stay over the next twelve months. Joseph appeals. STANDARD OF REVIEW ¶8 A district court’s decision on modification of child support is reviewed for an abuse of discretion. In re Marriage of Wilson, 2009 MT 203, ¶ 12, 351 Mont. 204, 210 P.3d 170. A trial court abuses its discretion when it acts arbitrarily without conscientious judgment or so exceeds the bounds of reason as to work a substantial injustice. In re Kessler, 2011 MT 54, ¶ 15, 359 Mont. 419, 251 P.3d 147. The district court’s findings of fact are reviewed for clear error, and its conclusions of law are reviewed for correctness. In re Marriage of Damschen, 2011 MT 297, ¶ 22, 363 Mont. 19, 265 P.3d 1245. Clear error exists if substantial credible evidence fails to support the findings of fact; if the district court misapprehended the effect of the evidence; or if the Supreme Court has a definite and firm conviction that the district court made a mistake. Pastimes, LLC v. Clavin, 2012 MT 29, ¶ 18, 364 Mont. 109, 274 P.3d 714. 5 DISCUSSION ¶9 Did the District Court abuse its discretion when it denied the motion to modify child support? ¶10 A district court may modify maintenance or support “upon a showing of changed circumstances so substantial and continuing as to make the terms unconscionable.” Section 40-4-208(2)(b)(i), MCA. We have interpreted this standard to mean that a finding of changed circumstances is a prerequisite to any inquiry into the unconscionability of a prior support award. In re Marriage of Pearson, 1998 MT 236, ¶ 41, 291 Mont. 101, 965 P.2d 268. If a change in circumstances is established, the District Court must then determine whether the change is circumstances is “so substantial and continuing as to make the terms unconscionable.” Pearson, ¶ 41. There is no set definition of unconscionability; rather, determinations of unconscionability are made on a case-by-case scrutiny of the underlying facts. Pearson, ¶ 30. ¶11 Joseph argues that, given the District Court’s determination that he is disabled, with no certainty that future surgeries will resolve his problems, it was “unconscionable for the obligation to continue to accrue,” and that the court’s stay of support “is an implicit finding that Joe’s inability to pay support is continuing.” ¶12 It should first be noted that the District Court did not enter specific findings of fact, but provided a narrative that summarized the evidence offered by both sides, with little that would be considered definitive findings from the evidence. As the trier of fact, a district court should evaluate the evidence, including its determinations about the evidence it has accepted and rejected after assessing credibility and weight, because an 6 appellate court cannot make such assessments. Although noting Ms. Vincent’s testimony about the impediment to Joseph’s employability, the District Court also stated that “there are serious questions concerning Joseph’s condition which continue to exist,” citing Joseph’s failure to provide medical evidence and his recent winning of a national finals ski joring competition, and reasoning “his ability to perform such a feat does raise some suspicion as to his current claims.” These expressions of doubt about Joseph’s claims— which Joseph’s arguments assume were resolved in his favor—actually fed into the District Court’s numerated Conclusions of Law, wherein the District Court reiterated findings from the previous year’s case that “Joe is capable of earning $52,000 a year.” Although concluding that Joseph had established “a change of circumstances that significantly impacts his ability to pay $814 per month in child support,” the court also concluded that this condition is temporary and not continuing, and therefore not unconscionable. Joseph argues that this conclusion of law was error because the District Court’s determination that Joseph’s change of circumstances was only temporary is clearly erroneous. ¶13 A finding is clearly erroneous if it is not supported by substantial evidence. Clavin, ¶ 18. Substantial evidence is evidence that a reasonable mind might accept as adequate to support a conclusion, even if weak and conflicting. Siebken v. Voderberg, 2015 MT 296, ¶ 12, 381 Mont. 256, 359 P.3d 1073. It consists of more than a mere scintilla of evidence but may be less than a preponderance. Marriage of Schmitz, 255 Mont. 159, 165, 841 P.2d 496, 500 (1992). 7 ¶14 Ms. Vincent testified that in order to be an equine dentist, Joseph would need rotator cuff surgery as well as neck surgery. Crucially, Ms. Vincent went on to testify that Joseph is “willing to pursue other employment if this career is not possible after he has undergone surgery,” and that “[d]epending on how [Joseph’s] treatment progresses, a vocational evaluation or training may be needed to either change his [employment plan] or progress towards his goal. These services will assist [Joseph], as his disabilities are currently changing, and help him with stability on his job.” Ms. Vincent’s testimony established that even if Joseph cannot become an equine dentist due to unsuccessful surgery, Joseph will pursue other employment that he is physically capable of performing. Thus, according to Ms. Vincent, the outcome of Joseph’s surgery affected his ability to become an equine dentist, not his ability to pursue employment in other occupations. This evidence is more than “a mere scintilla” that Joseph’s change of circumstance is temporary. ¶15 Furthermore, the District Court also noted in its order that the forensic CPA imputed Joseph’s income at higher than stated in his tax returns for 2015, that Joseph had a 25% ownership stake in a 300 lot subdivision, and that he was able to compete in a horse racing competition. These findings support the District Court’s conclusion that Joseph’s change in circumstance did not render the child support “unconscionable,” because, according to the District Court, Joseph has other sources of income and is physically capable of performing certain jobs if he is physically capable of competing in a horse racing competition. 8 ¶16 The District Court’s denial of Joseph’s motion to modify his child support obligation was not an abuse of discretion. Although the denial of this motion may raise questions about the validity of the District Court’s sua sponte stay of Joseph’s child support obligation, Lona did not cross-appeal the issue. It is therefore not properly before us for review. Gabriel v. Wood, 261 Mont. 170, 178, 862 P.2d 42, 47 (1993). ¶17 Affirmed. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ BETH BAKER

August 9, 2016

d421e38f-f092-4211-a87a-3415a0be7c62

Talbot v. Cudd

2016 MT 247

DA 15-0690

Montana

Montana Supreme Court

DA 15-0690 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 247 JASON T. TALBOT, Plaintiff and Appellee, v. WMK-DAVIS, LLC, Defendant, and CUDD PRESSURE CONTROL, INC., Intervenor and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DV 14-1234 Honorable Gregory R. Todd, Presiding Judge COUNSEL OF RECORD: For Appellant: Emily Jones (argued), Carey E. Matovich, Matovich, Keller & Murphy, P.C., Billings, Montana For Appellee: Alexander (Zander) Blewett, III, Alexander (Anders) Blewett, IV (argued), Hoyt & Blewett PLLC, Great Falls, Montana Bradley E. Norman, Norman & Edmen PLLC, Oklahoma City, Oklahoma Argued and Submitted: May 25, 2016 Decided: October 4, 2016 Filed: __________________________________________ Clerk 10/04/2016 Case Number: DA 15-0690 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Appellant Cudd Pressure Control, Inc. (Cudd) seeks to assert a subrogation lien to recover workers’ compensation benefits paid to Jason T. Talbot. Following cross-motions for partial summary judgment on the issue of whether Cudd could assert a workers’ compensation subrogation lien, the District Court determined that such claims were prohibited in Montana until the Plaintiff had been made whole and granted Plaintiff’s Motion for Partial Summary Judgment. Cudd appeals. We affirm. ISSUES ¶2 On appeal, Cudd raises three issues, which we restate as follows: 1. Did the District Court err in determining that, under Oberson v. Federated Mutual Insurance Co., Montana courts will not conduct a choice of law analysis when determining the validity of a workers’ compensation subrogation lien? 2. Did the District Court err in granting summary judgment in favor of Talbot? FACTUAL AND PROCEDURAL BACKGROUND ¶3 On March 18, 2014, Jason Talbot, a resident of Oklahoma, was seriously injured while crossing an intersection in Billings, Montana, when he was struck by a vehicle driven by Johnathan Tokarski, an employee of WMK-Davis, LLC (WMK-Davis). At the time of the accident, Talbot was employed by, and had travelled to Montana on business for, Cudd Pressure Control, Inc. Subsequently, Talbot filed a workers’ compensation claim in Oklahoma. That claim is ongoing. ¶4 In August of 2014, Talbot filed a Complaint and Demand for Jury Trial in the Thirteenth Judicial District Court, Yellowstone County, against Tokarski. Talbot then amended his complaint to include WMK-Davis. In April of 2015, Cudd filed a motion to 3 intervene in order to assert a workers’ compensation subrogation lien against Talbot’s potential tort recovery. Such an action is allowable under Oklahoma law, where there is a statutory policy in favor of subrogation. See Okla. Stat. tit. 85A, § 43 (2016); Caffey v. Soloray, 57 P.3d 870, 874 (Okla. 2002). ¶5 Following Cudd’s successful intervention, the parties filed cross-motions for summary judgment to determine whether Cudd would be allowed to assert a workers’ compensation subrogation lien in the underlying action, as Oklahoma law directly conflicts with Montana’s rule that a party may not subrogate until the injured worker has been made whole. The District Court granted Talbot’s motion for summary judgment and held that Montana law applied and Cudd was prohibited from asserting such a lien. Cudd 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 ruling on a summary judgment motion. 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 Ins. Co. v. Mont. State Fund, 2015 MT 82, ¶ 10, 378 Mont. 388, 344 P.3d 977 (internal citations omitted). “We will affirm the district court when it reaches the right result, even if it reaches the right result for the wrong reason.” State v. Marcial, 2013 MT 242, ¶ 10, 371 Mont. 348, 308 P.3d 69 (quoting State v. Ellison, 2012 MT 50, ¶ 8, 364 Mont. 276, 272 P.3d 646). 4 DISCUSSION ¶7 Talbot was struck by a truck at an intersection in Billings, Montana, at the age of 39. As a result of the collision, Talbot, a father of three, suffered an extensive brain injury as well as multiple orthopedic injuries. Talbot’s medical bills exceed $680,000 and are still accruing. Talbot’s economist estimates that his loss of earning capacity has a value in excess of $3.4 million. Although the tortfeasor Tokarski carried high limits of liability insurance, the limits were inadequate to fully compensate Talbot. Cudd does not argue that, under Montana law, Talbot has been made whole by virtue of his recovery. ¶8 Talbot filed a workers’ compensation claim in Oklahoma and is still being treated there for his injuries. On behalf of Talbot, Cudd paid approximately $600,000 in medical and disability payments. Upon intervening in Talbot’s personal injury case in Yellowstone County, Cudd attempted to assert a workers’ compensation subrogation lien against any recovery Talbot might make in the case. It did so pursuant to an Oklahoma statute that entitles an employer to a first lien on two-thirds (2/3) of the net proceeds recovered in the action that remain after the payment of the reasonable costs of collection, for the payment to them of the amount paid and to be paid by them as compensation to the injured employee or his or her dependents. Okla. Stat. tit. 85A, § 43(A)(1)(c). Talbot argued in the District Court that the workers’ compensation lien of Cudd was invalid under the Montana Constitution and Montana law. ¶9 On cross-motions for summary judgment, the District Court agreed with Talbot, holding that this Court’s decision in Oberson v. Federated Mutual Insurance Co., 2005 5 MT 329, 330 Mont. 1, 126 P.3d 459, prohibited Montana courts from undertaking a choice of law analysis under the Restatement (Second) Conflict of Laws (Restatement) when determining whether a workers’ compensation subrogation lien could be asserted against an injured worker who had not been made whole. Further, the District Court distinguished Oberson from our decision in Phillips v. General Motors Corp., 2000 MT 55, 298 Mont. 438, 995 P.2d 1002, noting that the two decisions advocated different approaches for determining which state’s law applies in a particular case because Phillips dealt with a personal injury/product liability/wrongful death action while Oberson dealt specifically with workers’ compensation subrogation. The District Court applied Montana’s “made whole” doctrine and held that Cudd was precluded from attaching a workers’ compensation subrogation lien to Talbot’s potential tort recovery prior to Talbot being made whole. ¶10 The preliminary question before us is whether a Montana court should undertake a choice of law analysis before determining whether a workers’ compensation subrogation lien may be asserted against an injured worker prior to the party being made whole. More specifically, this case allows us to further clarify our approach to choice of law issues in workers’ compensation subrogation cases following our decisions in Phillips v. General Motors Corp., and Oberson v. Federated Mutual Insurance Co. We begin by summarizing our holdings in Phillips and Oberson. ¶11 In Phillips, we answered three questions certified to this Court by the United States District Court for the District of Montana; the first and third questions are particularly relevant here. Question One asked “[w]hether, in a personal injury/product 6 liability/wrongful death action, where there is a potential conflict of laws, Montana will follow the Restatement (Second) of Conflict of Laws, including the ‘most significant relationship’ test set forth in §§ 146 and 6, in the determination of which state’s substantive law to apply?” Phillips, ¶ 2. In answering, we considered the merits of the traditional choice of law rule, lex loci delicti commissi, which provides “the infliction of injury is actionable under the law of the state in which it was received.” Phillips, ¶ 16. In our analysis, we placed particular emphasis on moving away from rigid rules for resolving choice of law questions. We noted that the Restatement provides “a more flexible approach which permits analysis of the policies and interests underlying the particular issue before the court,” and determined that “any analysis under the Restatement approach is necessarily driven by the unique facts, issues, applicable law, and jurisdictions implicated in a particular case.” Phillips, ¶¶ 22, 26 (quoting In re Air Crash Disaster at Boston, Mass. on July 31, 1973, 399 F. Supp. 1106, 1110 (D. Mass. 1975)). Further, we stated that “[w]e see no reason to have one choice of law approach for contracts and another for torts,” noting that we had previously adopted the Restatement (Second) approach for conflict of law issues sounding in contract. Phillips, ¶ 23 (citing Casarotto v. Lombardi, 268 Mont. 369, 886 P.2d 931 (1994), vacated and remanded on other grounds sub nom Doctor’s Associates, Inc. v. Casarotto, 515 U.S. 1129, 115 S. Ct. 2552 (1995), reaff’d on reh’g Casarotto v. Lombardi, 274 Mont. 3, 901 P.2d 596 (1995), reversed and remanded on other grounds sub nom Doctor’s Associates Inc. v. Casarotto, 517 U.S. 681, 116 S. Ct. 1652 (1996)). Subsequently, we answered yes to the first certified question and adopted the Restatement (Second)’s “most significant 7 relationship” test for choice of law questions involving issues sounding in tort. Phillips, ¶ 23. ¶12 Question Three asked whether Montana recognized “a ‘public policy’ exception that would require application of Montana law even where Montana’s choice of law rules [might otherwise] dictate application of the laws of another state, and would such an exception apply in this case?” Phillips, ¶ 74. We noted that “[f]or choice of law purposes, the public policy of a state is simply the rules, as expressed in its legislative enactments and judicial decisions, that it uses to decide controversies.” Phillips, ¶ 75 (citations omitted). We then determined that Montana did not recognize a public policy exception to the most significant relationship test, stating that “[t]he purpose of a choice of law rule is to resolve conflicts between competing policies,” and that “[c]onsiderations of public policy are expressly subsumed within the most significant relationship approach.” Phillips, ¶ 75. ¶13 Five years later, this Court decided Oberson. In Oberson, Musselman, a Michigan resident, suffered “catastrophic” injures while working in Montana for a Michigan-based employer. Oberson, ¶¶ 4-5. Subsequently, he filed a workers’ compensation claim in Michigan and a personal injury claim in Montana. Oberson, ¶ 4. Federated Mutual Insurance Company (Federated) sought to subrogate against Musselman’s Montana personal injury award for benefits paid pursuant to Musselman’s workers’ compensation claim, and filed a subrogation claim in Michigan’s workers’ compensation court. Oberson, ¶¶ 1, 6. Musselman filed a declaratory action in Montana seeking a determination that Montana law governed “the enforceability of Federated’s subrogation 8 interest,” and that Montana law precluded Federated from subrogating until Musselman had been made whole. Oberson, ¶ 6. ¶14 The dispositive question for this Court was “whether Montana law governs a subrogation claim brought by a workers’ compensation insurer for reimbursement of benefits paid to a Michigan worker who, injured while working in Montana, recovered a third-party personal injury judgment in a Montana court.” Oberson, ¶ 3. On appeal, Federated presented three arguments. ¶15 First, Federated argued comity demanded that this Court defer to Michigan’s workers’ compensation court for a determination of Federated’s subrogation interests. Oberson, ¶ 10. We stated that comity was not a rule of law “but rather ‘an expression of one state’s entirely voluntary decision to defer to the policy of another.’” Oberson, ¶ 10 (quoting Simmons v. State, 206 Mont. 264, 289, 670 P.2d 1372, 1385 (1983)). Citing Michigan’s lack of a strong public policy in favor of retaining jurisdiction, we noted that the strength of Montana’s public policy against subrogation prior to full recovery by injured parties, as articulated in Article II, Section 16, of Montana’s Constitution, weighed against relinquishing jurisdiction and therefore rejected Federated’s argument. Oberson, ¶ 10. ¶16 Second, Federated argued that if Montana courts had jurisdiction, the Montana Workers’ Compensation Court was the proper forum for resolution. Oberson, ¶ 11. We rejected this argument, noting that the “monetary recovery implicated here flows exclusively from tort damages suffered in Montana, adjudicated in federal civil court, and directed by Montana’s substantive tort law.” Oberson, ¶ 11. 9 ¶17 Finally, Federated argued that, if the Workers’ Compensation Court was not the proper forum, this Court should adopt § 185 of the Restatement to determine choice of law issues involving workers’ compensation subrogation. Oberson, ¶ 12. Section 185 requires that the local law of the state in which the workers’ compensation benefits were paid be applied to determine the subrogation rights of the benefit paying parties. Oberson, ¶ 12. In evaluating § 185, we underscored the importance of determining the applicability of the Restatement “in light of Montana’s public policies and the Legislature’s statutory guidance.” Oberson, ¶ 13. Further, we noted our consistent rejection of rigid rules in favor of a “more flexible approach which permits analysis of the policies and interests underlying the particular issue before the court.” Oberson, ¶ 13 (quoting Phillips, ¶ 22). Because § 185 contained a rigid rule for choice of law questions involving workers’ compensation subrogation, we determined that the section did not accord with our preference for a more flexible approach and was inapplicable in Montana. Oberson, ¶ 13. We therefore declined to adopt and apply § 185, and concluded that Montana law precluded subrogation by Federated pursuant to Montana’s “made whole” doctrine. Oberson, ¶ 17. ¶18 The Dissent argues that our decision to reject § 185 was grounded in “basic subrogation principles premised upon a subrogation lien being derivative in nature.” Dissent, ¶ 47. We disagree. As noted, this Court’s eventual conclusion in Oberson rested firmly on Montana’s strong public policy against subrogation: “Montana’s public policy, as defined in Article II, Section 16, precludes application of Michigan subrogation law to 10 Musselman’s personal injury recovery until Musselman realizes the full measure of his adjudicated damages.” Oberson, ¶ 17. ¶19 We also disagree with the Dissent’s argument that “the analytical basis for our decision in Oberson was the premise that the subrogation claim flowed from damages obtained following the application of Montana law to the underlying tort action.” Dissent, ¶ 47. In Oberson, we stated that our decisions in Trankel v. Dept. of Military Affairs, 282 Mont. 348, 938 P.2d 614 (1997), Youngblood v. American States Ins. Co., 262 Mont. 391, 866 P.2d 203 (1993), and Swanson v. Hartford Ins. Co. of Midwest, 2002 MT 81, 309 Mont. 269, 46 P.3d 584, were “determinative in our choice of law analysis.” Oberson, ¶ 17. In each of those cases, we relied on Article II, Section 16, Montana Constitution, and the “made whole” doctrine as the basis for precluding subrogation prior to an injured party being made whole. In summary, the analytical basis for our decision in Oberson was the presence of a constitutional provision which absolutely prohibited the enforcement of “‘[a]ny statute or court decision which deprives an employee of his right to full legal redress.’” Oberson, ¶ 15 (quoting Trankel, 282 Mont. at 362, 938 P.2d at 623). ¶20 1. Did the District Court err in determining that, under Oberson v. Federated Mutual Insurance Co., Montana courts will not conduct a choice of law analysis when determining the validity of a workers’ compensation subrogation lien? ¶21 Cudd argues that the District Court erred in determining that Oberson prevented Montana courts from undertaking a choice of law analysis in cases involving workers’ compensation subrogation liens where the damaged party has not been made whole. Further, Cudd argues that we should apply the principles of § 6 and the “most significant 11 relationship” test articulated in § 1451 of the Restatement (Second) Conflict of Laws, as adopted in Phillips, and revisit our refusal in Oberson to adopt § 185 of the Restatement. ¶22 Section 145 of the Restatement, contained within Chapter 7, Topic 1, entitled “Torts,” provides: (1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6. (2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include: (a) the place where the injury occurred, (b) the place where the conduct causing injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue. In summary, § 145 is used to supplement the principles of § 6 of the Restatement to account for the considerations unique to issues involving tortious conduct. ¶23 Under the Restatement a choice of law analysis is two-part. As we noted in Phillips, “[a]ny conflict of law analysis under the Restatement must begin with § 6.” Phillips, ¶ 28. Section 6 first asks whether the forum state has a statutory directive concerning choice of law applicable to the underlying cause of action. Restatement (Second) Conflict of Laws § 6(1). If a statutory directive is present, the inquiry is ended and the court applies the statute. However, in the absence of such a directive, the Court 1 In Phillips, we recognized that even though the specific Restatement sections implicated in a personal injury/products liability/wrongful death case are §§ 146 and 175, the “most significant relationship test is contained in § 145(2). Phillips, ¶ 30 (“Whether another state has a more significant relationship is determined under § 145(2).”) 12 considers both the principles outlined in § 6(2) and the specific section of the Restatement that is applicable to the case. Phillips, ¶¶ 28-30. Section 6(2) provides: (2) Where there is no such directive, the factors relevant to the choice of the applicable rule of law include: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of a particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability, and uniformity of result, and (g) ease in the determination and application of the law to be applied. We have previously noted that this section provides “a more flexible approach which permits analysis of the policies and interests underlying the particular issue before the court,” and stated that “[a]ny analysis under the Restatement approach is necessarily driven by the unique facts, issues, applicable law, and jurisdictions implicated in a particular case.” Phillips, ¶¶ 22, 26 (quoting In re Air Crash Disaster at Boston, Mass. on July 31, 1973, 399 F. Supp. at 1110). ¶24 In Phillips, the underlying case involved a “personal injury/product liability/wrongful death action.” Phillips, ¶ 2. Because Montana did not have an applicable statutory directive regarding choice of law, this Court looked to both the principles outlined in § 6 and the specific sections of the Restatement that relate to tort and personal injury actions, §§ 146 and 175, to determine the appropriate choice of law analysis. Phillips, ¶¶ 27-30. Sections 146 and 175 require that the rights of the parties be determined in accordance with the laws of the state where the injury occurs unless another state has a more significant relationship. Phillips, ¶ 30; see also Restatement 13 (Second) Conflict of Laws §§ 145(2)(a)-(d) (containing the guidelines for determining whether another state has a more significant relationship). Therefore, we adopted the Restatement’s “most significant relationship” test in order to determine which state’s substantive law would apply to issues sounding in tort. Phillips, ¶ 23. ¶25 It is this “most significant relationship” test that Cudd and the Dissent urge this Court to adopt in the instant case. In the interest of clarity, we reiterate that the “most significant relationship” test is not a subset of § 6(2) of the Restatement, as the Dissent appears to argue, but is found within § 145. This Court turned to § 145 in Phillips because § 146 specifically directs a court to that section when undertaking a choice of law analysis involving issues sounding in tort. We have not been presented with a convincing argument as to why, in cases where there is not a statutory directive on point, we should abandon our long standing method of applying the general § 6(2) factors along with the specific Restatement factors implicated by the choice of law issue, here § 185, in favor of the Dissent’s proposed new rule that, in the context of workers’ compensation subrogation liens, we should apply the choice of law analysis we use for issues sounding in tort. ¶26 Further, we are confused by the Dissent’s argument that we have created a public policy exception to the “most significant relationship” test. Dissent, ¶ 49. We are explicitly refusing to apply the “most significant relationship” test in this case, as the Restatement provides a section, § 185, that applies directly to issues involving workers’ compensation subrogation. Section 185 states 14 [t]he local law of the state under whose workmen’s compensation statute an employee has received an award for an injury determines what interest the person who paid the award has in any recovery for tort or wrongful death that the employee may obtain against a third person on account of the same injury. As we noted in Oberson, this section creates a rigid rule for determining choice of law issues involving workers’ compensation subrogation liens. ¶27 After hearing oral argument in the instant case, and further considering the issue, we conclude that Montana courts should utilize the Restatement to determine choice of law issues involving the application of workers’ compensation subrogation liens to tort recoveries in Montana. This will bring us in line with the analyses we utilize in contract and tort cases. We nonetheless conclude that Oberson was correctly decided, and therefore reaffirm that the rigid test set forth in § 185 is not applicable in Montana. ¶28 We reiterate here the distinction between actions in tort, such as Phillips, and subrogation actions, as present in the instant case. Phillips expressly denied the existence of a public policy exception to the “most significant relationship” test. Phillips, ¶ 75. We noted that “[c]onsiderations of public policy are expressly subsumed within the most significant relationship approach,” making a public policy exception “redundant.” Phillips, ¶ 75. In contrast, § 185 is silent as to the concerns of public policy. Therefore, while an exception was not warranted in Phillips because the applicable test adequately addressed public policy, the Restatement’s lack of consideration of public policy when evaluating workers’ compensation subrogation claims requires us to consider whether the public policy exception contained in § 90 of the Restatement should be applied. 15 ¶29 Section 90, entitled “Action Contrary to Public Policy,” is found within Restatement Chapter 4, Limitations on the Exercise of Judicial Jurisdiction, Topic 2, Limitations Imposed by the Forum. It provides: “No action will be entertained on a foreign cause of action the enforcement of which is contrary to the strong public policy of the forum.” Restatement (Second) Conflict of Laws § 90. It is meant to be narrow in scope, rarely applied, and relevant only “where the forum refuses to entertain the suit on the ground that the cause of action is contrary to a strong local public policy.” Restatement (Second) Conflict of Laws § 90 cmt. a, c. Thus, § 90 acts as a potential limit on the application of other Restatement sections. ¶30 As this Court has yet to address § 90 in this context, we find the Supreme Court of Ohio’s reasoning in American Interstate Insurance Co. v. G & H Service Center, Inc., 861 N.E.2d 524 (Ohio 2007) [hereinafter American Interstate], instructive. In American Interstate, the Court addressed an almost identical factual situation to that in the instant case. There, an employee, residing in Louisiana, was injured in Ohio in the course of his employment. He filed a workers’ compensation claim in Louisiana. Subsequently, he filed a personal injury claim in Ohio. Insurer American Interstate filed a complaint in Ohio to assert its right of subrogation, pursuant to Louisiana law. American Interstate, 861 N.E.2d at 526. The employee challenged the subrogation rights and filed a personal injury cross-claim. American Interstate, 861 N.E.2d at 526. The Court stated that, because the employee had filed his workers’ compensation claim in Louisiana, § 185 required that Louisiana law govern the determination of whether or not a workers’ compensation subrogation claim could be brought against the employee’s tort recovery. 16 American Interstate, 861 N.E.2d at 527. Before making a final determination, however, the Court noted that § 90 potentially limited the applicability of §185, stating “in this case, even though the Restatement is clear that it is Louisiana law that should apply to the subrogation claim, it is still necessary to determine whether allowing American Interstate to assert its subrogation rights under Louisiana law would violate Ohio’s public policy.” American Interstate, 861 N.E.2d at 528. ¶31 The Ohio Court pointed out that courts have applied a similar public policy exception to determine whether application of foreign law, as opposed to entertainment of a foreign cause of action, would run counter to the interests of the state’s citizens. American Interstate, 861 N.E.2d at 528. In such cases, the courts require “that a state’s interest in, and relation to, an issue be significant enough that application of foreign law would threaten that policy.” American Interstate, 861 N.E.2d at 528. As one noted treatise has observed, “[t]he Restatement, Second draws a fine distinction between a refusal to entertain an action and the application, for public policy reasons, of forum law.” Eugene F. Scoles, Peter Hay, Conflict of Laws, § 3.15 at 74 (1982). We agree with the Ohio court’s conclusion that, “[b]ecause the public-policy concerns are essentially the same whether the question is one of applying foreign law or bringing a foreign action, these considerations are equally relevant when considering Section 90’s public-policy exception.” American Interstate, 861 N.E.2d at 528. ¶32 The Court’s ultimate decision on whether Ohio’s public policy prevented subrogation was grounded in an analysis of previous Ohio case law, Ohio’s statutory scheme governing workers’ compensation subrogation, and the Ohio Constitution. 17 American Interstate, 861 N.E.2d at 529. The Court determined that, as a matter of public policy, Ohio did not disfavor subrogation claims. American Interstate, 861 N.E.2d at 529. In reaching this determination, the Court noted that not only had its previous decisions refrained from declaring that the idea of subrogation was generally unconstitutional or against public policy, the Ohio General Assembly had recently amended the State’s subrogation statute to retain the right of subrogation in favor of the workers’ compensation insurer. American Interstate, 861 N.E.2d at 529. Nonetheless, both Ohio’s § 90 analysis and its manner of resolving its application are instructive here. ¶33 As did the Ohio Supreme Court, we examine whether allowing Cudd to assert its subrogation rights in Montana pursuant to Oklahoma law would violate Montana’s public policy. In making this determination, we consider our case law and our state Constitution. The Montana Constitution provides a clear statement of public policy regarding workers’ compensation subrogation liens. Article II, Section 16, provides in relevant part, “No person shall be deprived of this full legal redress for injury incurred in employment for which another person may be liable except as to fellow employees and his immediate employer who hired him if such immediate employer provides coverage under the Workmen's Compensation Laws of this state.” Mont. Const. art. II, § 16. “This Court has consistently interpreted the language of Article II, Section 16 as precluding the subrogation of a tort award until the damaged party fully recovers.” Oberson, ¶ 14. ¶34 In Francetich v. State Compensation Mutual Insurance Fund, 252 Mont. 215, 827 P.2d 1279 (1992), we stated that this provision “is mandatory, prohibitive, and 18 self-executing and it prohibits depriving an employee of his full legal redress, recoverable under general tort law, against third parties.” Francetich, 252 Mont. at 224, 827 P.2d at 1285. Further, we have held that there is “no room for erosion based on what federal courts or the courts of other states would do pursuant to federal laws or the laws of other states.” Trankel, 282 Mont. at 362, 938 P.2d at 623. Thus, we have consistently interpreted this constitutional provision as precluding workers’ compensation subrogation of an injured employee’s tort recovery prior to the employee being made whole. Francetich, 252 Mont. at 224, 827 P.2d at 1285; Oberson, ¶¶ 14, 17. ¶35 By including Article II, Section 16, in our Constitution, Montana has immortalized a strong public policy interest in preventing subrogation of tort awards prior to an injured worker being made whole. The provision’s inclusion within Article II, the Declaration of Rights, illustrates how truly important the citizens of this state hold this principle to be. Therefore, we conclude that the constitutional provision forbidding subrogation prior to an injured worker being made whole is evidence of an exceptionally strong public policy interest as contemplated by § 90 of the Restatement. ¶36 We are cognizant of the very limited scope of § 90 and the requirement that courts should not refuse to entertain causes of action unless to do so “would violate some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.” Loucks v. Standard Oil Co. of New York, 120 N.E. 198, 202 (N.Y. 1918). ¶37 The language of Article II, Section 16, and our recurrent opinions underscoring its importance implicate the “fundamental principles of justice” contemplated by § 90. 19 Montana has an exceptionally strong public policy precluding the application of a workers’ compensation subrogation lien to an injured worker’s tort recovery prior to that party being made whole. Further, comparing Oklahoma and Montana law on this subject reveals not a mere difference, but a deep-seated disparity between the values embodied in Montana’s Constitution and those codified in the Oklahoma statute. In 2014, the Oklahoma legislature modified the statutory scheme governing workers’ compensation subrogation. The new scheme allows an employer to recover 2/3rds of the injured worker’s tort recovery, or the full amount of the lien, whichever is less, for repayment of the amount paid under the Workers’ Compensation Act. Okla. Stat. tit. 85A, § 43. As noted by the Oklahoma Court of Civil Appeals, under Oklahoma law, “a statutory subrogation right is not limited by the ‘make whole’ rule.” Tomlinson v. Cont’l Cas. Co., 77 P.3d 628, 632 (Okla. Civ. App. 2003). The contrast between the Oklahoma statutory scheme and the Montana Constitution, in which a right to be “made whole” is explicitly granted to every injured worker, cannot be overstated. The Montana Constitution is the supreme law of this State, and we are bound by its mandate. Associated Press v. Board of Pub. Educ., 246 Mont. 386, 391, 804 P.2d 376, 379 (1991). Talbot’s employer sent him to Montana to perform a job. While here to do his work, he was seriously injured by a third party’s negligence. Talbot’s action against the tortfeasor arises in Montana, and Montana has a strong tie to—and a strong interest in resolving—the underlying tort action. Cudd’s intervention in the action to assert a subrogation lien directly implicates Article II, Section 16’s guarantee of “full legal redress for injury incurred in employment for which another person may be liable.” Because Talbot undisputedly will not be made 20 whole for his injuries, his “full legal redress” would be denied if his employer is allowed to obtain subrogation. ¶38 In summary, we reaffirm our decision in Oberson that § 185 is inapplicable in Montana and rely on § 90 of the Restatement to supplement our determination both here and in Oberson that, based on the exceptionally strong public policy of this State, courts in Montana will not entertain actions involving workers’ compensation subrogation prior to an injured worker’s full recovery. Therefore, although the District Court did not rely on the grounds under which we affirm its decision, it did not err in determining that Montana courts will not conduct a § 185 choice of law analysis when determining whether a party may attach a workers’ compensation subrogation lien to an injured worker’s tort recovery prior to the injured worker being made whole. ¶39 Finally, we clarify that we are comfortable categorically applying § 90 in this particular case because Cudd has stipulated that, under Montana law, “Cudd will be prohibited from asserting a subrogation interest, pursuant to Montana’s ‘made whole’ doctrine.” In other words, there is no dispute that Talbot has not been made whole by virtue of his tort recovery. Should there be, in a different case, a genuine issue as to whether an injured worker has made a full recovery such that subrogation could be permitted, then there would be no categorical application of § 90, and the extent of the worker’s recovery would be an issue of fact to be resolved by the District Court. ¶40 2. Did the District Court err in granting summary judgment in favor of Talbot? ¶41 The issue before the District Court was solely a matter of law: whether Montana or Oklahoma law applied to either preclude or permit subrogation in the underlying tort 21 action. The District Court granted summary judgment in favor of Talbot and determined that Cudd’s attempt to assert a workers’ compensation subrogation lien was invalid under Montana law. Cudd has stipulated that, if Montana law applies, Talbot will not be made whole. Therefore, because we have held that the Montana Constitution applies in this case, and Cudd has stipulated that Talbot will not be made whole under Montana law, Talbot was entitled to summary judgment as a matter of law. For these reasons, the District Court did not err in granting summary judgment in favor of Talbot. CONCLUSION ¶42 For the reasons set forth in this Opinion, we hold that Montana courts will not entertain causes of action seeking to attach workers’ compensation subrogation liens to an injured worker’s tort recovery, prior to that party being made whole. Therefore, Talbot was entitled to summary judgment. ¶43 Accordingly, we affirm the decision of the District Court. /S/ PATRICIA COTTER We Concur: /S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ JIM RICE 22 Justice Laurie McKinnon, dissenting. ¶44 In my opinion, the Court follows a trail, perhaps created in Oberson, which misconstrues sections of the Restatement, our choice of law precedent, and well-established principles of subrogation. The underlying personal injury action in Montana is against a third-party tortfeasoror for damages. In Phillips we adopted §§ 6(2) and 145 of the Restatement (Second) of Conflict of Laws for tort actions explaining that “we see no reason to have one choice of law approach for contracts and another for torts.” Phillips, ¶ 23. I see no reason to distinguish choice of law for subrogation claims from the underlying action. If, pursuant to §§ 6(2) and 145, Montana law is the appropriate choice of law for the underlying tort action, then Montana’s made whole doctrine would foreclose payment of Cudd’s subrogation lien until Talbot has been fully compensated for his injuries. A subrogation claim flows from the potential damages Talbot might receive in successfully prosecuting his tort action. Cudd’s subrogation claim substitutes Cudd for its insured, Talbot, and arises from a potential judgment against WMK-Davis, as a result of WMK-Davis’ tortious conduct within the State of Montana. Following our rejection in Oberson of § 185, I cannot agree with the Court’s adoption of a new and inflexible rule for resolving a “choice” of law. Consistent with Phillips, I would apply the most significant relationship test to the underlying tort action. Montana’s strong policy of requiring that an injured party be made whole before subrogating a claim, in addition to the interests of Oklahoma, would be considered in applying the §§ 6(2) and 145 factors. I would remand for such a consideration to be 23 made. If Montana law applies, no subrogation will occur unless, and until, Talbot is fully compensated for his injuries. ¶45 Under Montana law, one who asserts the right of subrogation must step into the shoes of, or be substituted for, one whose claim or debt he or she paid. Skauge v. Mountain States Tel. & Tel. Co., 172 Mont. 521, 526, 565 P.2d 628, 630 (1977) (“the person substituted will succeed to the rights of the creditor in relation to the debt or claim.”). See also Mont. Petroleum Tank Release Comp. Bd. v. Capitol Indem. Co., 2006 MT 133, ¶ 13, 332 Mont. 352, 137 P.3d 522; Youngblood v. American States Ins. Co., 262 Mont. 391, 397, 866 P.2d 203, 206 (1993). Thus, an “insurer seeking subrogation has only those rights maintained by its insured.” Nimmick v. State Farm Mutual Automobile Ins. Co., 270 Mont. 315, 1158, 891 P.2d 1154, 1159 (1995). In St. Paul Fire & Marine Ins. v. Glassing, 269 Mont. 76, 80, 887 P.2d 218, 220 (1994), we adopted language from Couch on Insurance stating: The right of subrogation is purely derivative as the insurer succeeds only to the rights of the insured, and no new cause of action is created. In other words, the concept of subrogation merely gives the insurer the right to prosecute the cause of action which the insured possessed against anyone legally responsible for the latter’s harm, . . . . 16 Couch on Insurance 2d, § 61:37 (1983). Since an “insurer’s claim is derived from that of the insured, its claim is subject to the same defenses . . . as though the action were sued upon by the insured.” St. Paul Fire & Marine Ins., 269 Mont. at 80, 887 P.2d at 220. ¶46 Based upon the derivative nature of a subrogation claim, I would conclude that isolating the subrogation claim from the underlying tort claim for an independent choice of law analysis is inappropriate. The subrogation claim flows from the injured party’s 24 recovery of damages under a particular state’s law. While a state’s interest in subrogation may be relevant to deciding the choice of law for the underlying tort action, it is subsumed into consideration of the §§ 6(2) and 145 factors. As with all the Restatement factors, a state’s policy regarding subrogation would be just one of the relevant factors a court would consider. Such an approach is consistent with our precedent, harmonizes Oberson and Phillips, and applies principles of subrogation and the Restatement consistently. ¶47 In Oberson, Musselman filed a personal injury claim in Montana and recovered a judgment against a third-party tortfeasor. Oberson, ¶ 6. We refused to adopt § 185 in resolving the subrogation lien of Musselman’s Michigan-based employer, International, explaining that applying Michigan law to the subrogation issue would defeat Montana’s strong policy of ensuring an injured party is fully compensated for his injuries. Oberson, ¶ 17. In declining to adopt § 185 because it was inflexible and prevented consideration of Montana’s public policy, we explained that the “workers compensation context giving rise to the parties’ relationship here is of no legal consequence, as the money Federated seeks flows directly from Musselman’s injury in Montana, to which Montana’s federal court applied Montana tort law to conclude that damages were warranted.” Oberson, ¶ 13. Accordingly, our decision to reject § 185 in Oberson expressly relied upon the derivative nature of a subrogation lien. We refused to allow International to assert Michigan subrogation law in the context of an underlying tort action which had been brought by the insured in Montana and decided pursuant to Montana law. Oberson, ¶ 17. While much of our discussion was in the context of public policy citing at length 25 precedent setting forth Montana’s made whole doctrine, as the Court here does as well, the analytical basis for our decision in Oberson was the premise that the subrogation claim flowed from damages obtained following the application of Montana law to the underlying tort action. Oberson, ¶ 11. Concluding the workers compensation context was of no legal consequence when the underlying tort action was controlled by Montana law, we rejected adoption of § 185 in favor of a more flexible approach which would take into consideration Montana’s strong policy of precluding the subrogation of a tort award until the damaged party fully recovers. Oberson, ¶ 13. In contrast to these proceedings, we specifically recognized in Oberson that there was no countervailing public policy of another state to consider. Our analysis in Oberson was, therefore, incomplete inasmuch as we failed to articulate an analytical framework to be applied, following our rejection of § 185, when there are two or more competing public policy interests of different states. Significantly, in Oberson and here, we have left undisturbed our decision in Phillips where we expressly adopted the most significant relationship test as the analysis to be applied in choice of law disputes. In my view, and in contrast to the Court’s decision here, we cannot have a choice of law analysis if there is no analysis and no “choice” to be considered. ¶48 We held in Phillips that the “most significant relationship” analysis and the factors set forth in §§ 6(2) and 145 are to be applied for determining choice of law in a tort action. Phillips, ¶ 23. We expressly adopted the “most significant relationship” test as the procedure for deciding choice of law issues in Montana, absent a statutory directive to the contrary, explaining that there was no reason to have different tests applied which are 26 dependent upon the type of action pursued. Indeed, should Montana law not be applied to the underlying proceeding but nonetheless applied to the subrogation issue, it is unclear how Montana’s public policy is being furthered. The employer-employee relationship arose in Oklahoma and the underlying action and potential damages would be resolved through and flow from the application of another state’s laws. As in American Interstate, it would be hard to conclude that Montana’s public policy is advanced by applying our made whole doctrine to such a situation. ¶49 Moreover, we held in Phillips that considerations of public policy are expressly subsumed within the most significant relationship approach, referring specifically to § 6(2)(b) and (c). Phillips, ¶ 75. We explained that “in order to determine which state has the more significant relationship, the public policies of all interested states must be considered. [Therefore, a] ‘public policy’ exception to the most significant relationship test would be redundant.” Phillips, ¶ 75. We affirmed that “Montana does not recognize a public-policy exception to the ‘most significant relationship’ analysis because the purpose of the analysis is to resolve conflicts between different states’ competing policies[.] . . .” Madroo v. Nationwide Mut. Fire Ins. Co., 2008 MT 275, ¶ 53, 345 Mont. 262, 191 P.3d 389. The Court here, however, enunciates a rule in direct contravention to Phillips and Madroo by recognizing a public policy exception to be applied only in the context of subrogation claims and without any surrounding analytical framework. Talbot is not entitled to the protections of Montana law unless the Court first determines that Montana law applies to the issues presented in the underlying tort action. There is no public policy exception to the “significant relationship test.” Phillips, ¶ 75; Madroo,¶ 53. 27 In order to determine the choice of law in a tort action, we must apply the factors in § 6(2) as Phillips requires to the underlying tort action. ¶50 Finally, in searching for support of its “choice” of law principle, the Court refers to § 90 of the Restatement. That section provides: “[n]o action will be entertained on a foreign cause of action the enforcement of which is contrary to the strong public policy of the forum.” However, the scope of the section is thoroughly explained in comment (a): The rule of this Section has a narrow scope of application. It applies only to situations where the forum refuses to entertain the suit on the ground that the cause of action is contrary to a strong local public policy. The rule does not apply to situations where the forum does decide the controversy between the parties and, on the stated ground of public policy, applies its own local law, rather than the otherwise applicable law, in determining one or more of the issues involved. The rule of this Section does not justify striking down a defense good under the otherwise applicable law on the ground that this defense is contrary to the strong public policy of the forum. Such action involves more than a mere denial of access to the court. Rather, it is a preliminary step to rendition of a judgment on the merits. It involves application of the local law of the forum to determine the efficacy of a defense and thus to decide the ultimate rights of the parties. The Supreme Court of the United States has held that it is a violation of due process for a State to strike down a defense under a foreign law as being contrary to its public policy if the State has no reasonable relationship to the transaction and the parties. Home Ins. Co. v. Dick, 281 U.S. 397 (1930). In contrast to the circumstance present in these proceedings, cases where a suit on a foreign cause of action were dismissed on public policy grounds include Ciampittello v. Ciampitiello, 54 A.2d 669 (Conn. 1947) (gambling), Cerniglia v. C.&D. Farms, Inc., 203 So. 2d 1 (Fla. 1967) (contract against competition), and Dorado Beach Hotel Corp. v. Jernigan, 202 So. 2d 830 (Fla. 1967) (gambling). 28 ¶51 The Court cites American Interstate in support of applying § 90 to these proceedings. American Interstate was a certified question from the federal court as follows: “Where a conflict of law issue exists in a worker’s compensation subrogation claim, should sections 146 and 145, or section 185 of the Restatement of the Law of Conflicts govern?” American Interstate, 861 N.E. 2d at 522 (emphasis added). However, the Supreme Court of Ohio found that § 185 applied, and that the laws of the state in which the worker’s compensation benefits had been paid was controlling. The court went on to explain that, within the context of § 185, “this general rule is potentially limited . . . by Section 90 of the Restatement.” American Interstate, 861 N.E. 2d at 524. The court determined that “[a]pplying Louisiana law and allowing American Interstate to enforce its subrogation rights would not prejudice the interests of any Ohio citizens or undermine the state’s public policy.” American Interstate, 861 N.E. 2d at 529. The court observed that the “only parties with a substantive interest in the outcome of the subrogation issue . . . [were] all Louisiana citizens.” American Interstate, 861 N.E. 2d at 529. The court concluded that “[s]ince no Ohio party or citizen has a substantive interest in the outcome of the subrogation claims, Ohio’s interest in those issues is minimal.” American Interstate, 861 N.E. 2d at 529 (emphasis added). Protection of Ohio’s public policy therefore did not require any further analysis of the Louisiana’s worker’s compensation subrogation law. Unlike the Court’s decision here, in American Interstate the analytical framework upon which the court based its decision was § 185. Section 90 was applied as an exception to § 185. Moreover, in the instant proceedings, Talbot is an Oklahoma resident and there is no public policy interest in Montana of ensuring a 29 Louisiana resident is made whole, unless Montana law is applied to the underlying tort action. Significantly, the certified question in American Interstate was in the disjunctive and, after finding § 145 and the most significant relationship test inapplicable, applied § 90 only in the context of § 185. The application of § 90 in American Interstate mitigated the inflexibility of § 185 in choice of law disputes for subrogation claims. Ultimately, however, § 90 was not applied in American Interstate as an exception to § 185 because Ohio’s public policy was not advanced by protecting a Louisiana worker. As we have rejected § 185, American Interstate offers no support for the Court’s reasoning. ¶52 In my opinion, when we rejected § 185 in Oberson because it was “inflexible,” we were left with the “most significant relationship” analysis under §§ 6(2) and 145, adopted by this Court in Phillips. As stated in Phillips, considerations of public policy of the forum state and other interested states are subsumed within the “most significant relationship” approach. Here, our decision to find an impenetrable public policy exception pursuant to § 90 replaces the inflexibility of § 185 with another inflexible rule that guarantees there will be no choice of law. Montana law will always be applied to subrogation claims regardless of what countervailing considerations may warrant and whether Montana has any connection or interest in the proceeding at all. We have never established impenetrable barriers to prevent considered thought of valid competing interests, even when they are embodied in our constitution and statutes. See generally Krakauer v. State, 2016 MT 230, 384 Mont. 527, 2016 Mont. LEXIS 811. 30 ¶53 Following our rejection of § 185 in Oberson and based upon the derivative nature of a subrogation claim, I would hold unambiguously that the “most significant relationship” test is to be applied in resolving conflicts over the choice of law to the underlying tort action and, that the competing public policy interests of different states regarding subrogation are subsumed in the application of §§ 6(2) and 145, along with all the relevant factors in deciding the choice of law. If Montana law is the choice of law for Talbot’s underlying tort action, then no subrogation will occur unless Talbot is fully compensated for his injuries. ¶54 I dissent from the Court’s failure to provide a well-reasoned analytical framework for determining the choice of law in these proceedings. /S/ LAURIE McKINNON

October 4, 2016

e7e5e653-e82b-4972-a59d-687ddfe11722

State v. Hastings

N/A

DA 15-0258

Montana

Montana Supreme Court

DA 15-0258 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 199N STATE OF MONTANA, Plaintiff and Appellee, v. DAN EUGENE HASTINGS, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 13-0125 Honorable Russell C. Fagg, Presiding Judge COUNSEL OF RECORD: For Appellant: Dan Eugene Hastings (Self-Represented), Deer Lodge, Montana For Appellee: Timothy C. Fox, Montana Attorney General, C. Mark Fowler, Assistant Attorney General, Helena, Montana Scott D. Twito, Yellowstone County Attorney, Robert S. Spoja, Assistant Attorney General, Billings, Montana Submitted on Briefs: June 29, 2016 Decided: August 16, 2016 Filed: __________________________________________ Clerk 08/16/2016 Case Number: DA 15-0258 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Dan Eugene Hastings appeals from the District Court’s denial of his motion to withdraw his guilty plea to the offense of felony theft by accountability. The Court has reviewed the briefs filed by the parties, including Appellant’s reply brief. We affirm. ¶3 On August 13, 2013, Hastings entered a plea agreement under which he and the State resolved several misdemeanor and felony charges in two separate cases. One of those cases was DC 13-0125, which is the subject of this appeal, and the other was DC 12-0396. In the plea agreement the State and Hastings agreed that in DC 12-0396 that a felony robbery charge would be amended to misdemeanor theft and misdemeanor assault. As to DC 13-0125, the State and Hastings agreed that he would plead guilty to felony theft by accountability, and the State would dismiss misdemeanor charges of obstructing a police officer and resisting arrest, even though Hastings had previously pled guilty to those misdemeanors. Hastings acknowledged in the written plea agreement that he was giving up all the rights that would accrue to him at trial and that he was waiving “any factual dispute as to my guilt.” Hastings certified that he was not under any pressure or coercion to plead guilty. 3 ¶4 Hastings acknowledged the factual basis of the misdemeanor theft and assault charges in DC 12-0396 arising from an incident in which he took merchandise from a store and hit a store employee in the chest. Hastings acknowledged the factual basis of the felony theft by accountability charge in DC 13-0125 arising from an incident in which he “helped someone try to sell a stolen orange and black surfer bong belonging to Discount Smoke Shop, and the value of the property was over $1500.” Hastings acknowledged that he was satisfied with his attorney’s advice and services; that he had adequate time to prepare his defense; that he had copies of all discovery and investigative reports and had discussed them with his attorney; and that he had discussed the consequences of his guilty plea with his attorney. ¶5 On November 12, 2013, the District Court sentenced Hastings in DC 13-0125 to a term of five years with the Department of Corrections with two years suspended. On November 17, 2014, Hastings filed a motion to withdraw his guilty plea in DC 13-0125, pursuant to § 46-16-105(2), MCA. The District Court denied Hastings’ motion to withdraw. The District Court examined the record of Hastings’ change of plea and found that the plea was voluntary and intelligent, and that it was supported by the plea agreement that Hastings signed. In addition, the record demonstrated that Hastings received a substantial benefit from the plea agreement by getting a felony charge amended to two misdemeanors, and getting two more misdemeanor charges, to which he had already pled guilty, dismissed. ¶6 A court may allow a defendant to withdraw a guilty plea for good cause shown, which can include that the plea was involuntary. State v. McFarlane, 2008 MT 18, ¶ 11, 4 341 Mont. 166, 176 P.3d 1057. A plea is voluntary if the defendant is fully aware of the consequences of the plea, and of any commitments made to him. State v. Lone Elk, 2005 MT 56, ¶ 21, 326 Mont. 214, 108 P.3d 500. Case-specific factors are also relevant, such as whether the court adequately interrogated the defendant to determine whether he understood the plea, and whether the defendant received the benefit of having other charges dismissed. State v. Garner, 2014 MT 312, ¶ 26, 377 Mont. 173, 339 P.3d 1; Lone Elk, ¶¶ 14, 16. ¶7 Hastings contends that his motion to withdraw should have been granted because the State did not file a timely response in District Court. The District Court properly refused to do so. Hastings also argues that the District Court improperly found his motion untimely, but the District Court clearly stated that Hastings’ motion was being considered on its merits and not based upon a procedural failing. While Hastings now contends that he did not know that the bong was stolen at the time he possessed it, that contention is belied by the record. Hastings acknowledged in the plea agreement and in open court that he knew that the bong belonged to the store. The overwhelming evidence in the record shows that Hastings knowingly and voluntarily entered the plea agreement; that there was adequate factual basis for the pleas; and that Hastings received a substantial benefit from the agreement. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, the District Court’s findings are supported by substantial evidence and the legal issues are controlled by settled law that the District Court properly applied. 5 ¶9 Affirmed. /S/ MIKE McGRATH We Concur: /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ PATRICIA COTTER /S/ JIM RICE

August 16, 2016

77e3fd5b-302a-49b8-ac09-3d60ba4c3a4b

Marriage of Spence

2016 MT 191N

DA 15-0803

Montana

Montana Supreme Court

DA 15-0803 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 191N IN RE THE MARRIAGE OF: MAUREEN SPENCE, Respondent and Appellee, and TODD SPENCE, Petitioner and Appellant. APPEAL FROM: District Court of the Second Judicial District, In and For the County of Butte/Silver Bow, Cause No. DR 15-40 Honorable Kurt Krueger, Presiding Judge COUNSEL OF RECORD: For Appellant: Todd Spence, self-represented, Missoula, Montana For Appellee: Maureen Campbell, self-represented, Florence, Montana Submitted on Briefs: July 27, 2016 Decided: August 9, 2016 Filed: __________________________________________ Clerk 08/09/2016 Case Number: DA 15-0803 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Todd Spence appeals the Final Decree of Dissolution of his marriage with Maureen Spence, raising a single issue for consideration: whether the Second Judicial District Court erred by assigning to Todd responsibility for repaying $4,691 to the Social Security Administration for benefit checks issued in error to Maureen. We affirm. ¶3 Todd and Maureen were married in December 2010 and separated in March 2013. They filed a joint petition for dissolution of the marriage in February 2015. The petition represented that there were no debts of the marriage. According to the District Court’s findings of fact, when the parties appeared for the May 2015 hearing on their petition their testimony made clear that they did not agree on the allocation of debt between them. The Court continued the hearing and referred Todd and Maureen to the court’s settlement master, but they did not resolve the disagreement. ¶4 In the meantime, Maureen moved the District Court for a scheduling conference, representing that Todd spent nearly $5,000 of her SSI disability money that she was unaware he was receiving. She told the court that the Social Security Administration was making her pay the money back but that she never even knew that it was being paid 3 because she had been incarcerated during the entire time. The District Court held another hearing on November 4, 2015, and took testimony from Maureen. Todd was not present. ¶5 Maureen submitted exhibits at the hearing establishing that the Social Security Administration overpaid Maureen’s monthly disability payments from January 2014 through December 2014, during which time Maureen was incarcerated for conviction of a crime. The Administration sent two letters in January 2015 to Maureen. The first, sent to the Missoula address identified in the dissolution petition as Todd’s address, notified Maureen of the overpayment. The second, sent to Maureen at her Butte address, advised her that she would not be paid benefits beginning in November 2014 due to her incarceration. Maureen applied for waiver of the collection of the overpayment, but the Administration denied her request because it determined that Maureen failed to report that she was incarcerated and that she knew or should have known that the payments were incorrect, but she accepted the payments anyway. ¶6 The District Court found that Maureen believed her payments had ceased and that Todd had received the checks, endorsed them, and used them to his own benefit. The court therefore ordered that Todd would be responsible for repaying the full overpayment to the Social Security Administration. ¶7 Todd argues that Maureen was notified of a reduction in her benefits in May 2013 and that there was no way of knowing that the amounts received were in error. He also argues that the funds went to her for pre-paid phone cards, were deposited to her account when she entered pre-release in Butte, and were used to pay her criminal fines. The 4 problem with Todd’s argument is that he is making it for the first time to this Court on appeal. Todd attaches several documents to his opening brief that were not presented to the District Court. He did not come to court on the date scheduled for the hearing or ask the court in advance to continue the hearing to a new date. And, although he refers in his brief to things he said during the May 2015 hearing, he has not provided a transcript of that hearing. ¶8 District courts have “broad discretion in apportioning a marital estate.” In re Marriage of Crowley, 2014 MT 42, ¶ 26, 374 Mont. 48, 318 P.3d 1031. “Absent clearly erroneous findings, we will affirm a district court’s division of property unless the court abused its discretion.” In re Marriage of Richards, 2014 MT 213, ¶ 13, 376 Mont. 188, 330 P.3d 1193 (citing Crowley, ¶ 26). As the party appealing from the final decree, Todd carries the burden of persuasion to demonstrate to this Court that the District Court clearly erred in its factual determinations or otherwise abused its discretion in deciding how to allocate responsibility for the Social Security repayments. It is Todd’s duty to provide this Court “with a record sufficient to enable it to rule upon the issues raised.” M. R. App. P. 8(2). “‘[T]he burden of showing error by reference to matters of record is upon the appellant.’” Huffine v. Boylan, 239 Mont. 515, 517, 782 P.2d 77, 78 (1989) (quoting Yetter v. Kennedy, 175 Mont. 1, 7, 571 P.2d 1152, 1156 (1977)). ¶9 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. Because Todd 5 did not present any evidence to the District Court or a record to this Court that shows any error or abuse of discretion, the District Court is affirmed. /S/ BETH BAKER We concur: /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ JIM RICE

August 9, 2016

97f97a50-3502-4dab-821c-e10ae129f3c6

IN RE THE RULES OF PROFESSIONAL CON

N/A

AF 09-0688

Montana

Montana Supreme Court

IN THE SUPREME COURT OF THE STATE OF MONTANA AF 09-0688 _________________ IN RE THE RULES OF PROFESSIONAL CONDUCT O R D E R _________________ The State Bar of Montana Board of Trustees petitioned this Court to revise portions of the Montana Rules of Professional Conduct to provide guidance regarding lawyers’ use of technology. The proposed revisions affect the Preamble, Rule 1.0 on Terminology defining “writing,” Rule 1.6 on Confidentiality, and Rule 4.4(b) on Respect for Rights of Third Persons. The Court allowed a public comment period on the proposals. At a September 20, 2016 public meeting, the Court voted to adopt the revisions as proposed by the Montana Board of Trustees. In addition, the Court discussed a new subsection to Rule 4.4, proposed by the State Bar Ethics Committee. The Court voted to accept public comment on that proposed new subsection 4.4(c), which would read as follows: A lawyer shall not knowingly access or use electronically stored information in a communication or document received from another lawyer, for the purpose of discovering protected work product, privileged or other confidential information unless the receiving lawyer has obtained permission to do so from the author of the communication or document. Communication or document as used in this rule excludes documents produced in discovery and information that is the subject of criminal investigation. IT IS ORDERED that the above-referenced revisions to the Preamble, Rule 1.0, Rule 1.6, and Rule 4.4(b) of the Montana Rules of Professional Conduct are ADOPTED, effective January 1, 2017. The revisions are reflected in the complete text of the Montana Rules of Professional Conduct which are appended to this Order. 09/22/2016 Case Number: AF 09-0688 2 IT IS FURTHER ORDERED that the Court will accept public comment on the above proposed new 4.4(c) of the Montana Rules of Professional Conduct. The Court directs the State Bar’s Ethics and Technology Committees to confer and submit additional comment on the proposal within the time allowed. Comments must be filed in writing with the Clerk of this Court on or before October 31, 2016. This Order shall be published on the Montana Supreme Court website and notice of this Order shall be posted on the website of the State Bar of Montana and in the next available issue of the Montana Lawyer. The Clerk is directed to provide copies of this Order to the Montana State Law Library, the State Bar of Montana, and the Chairs of the Ethics and Technology Committees. Dated this 22nd day of September, 2016. /S/ MIKE McGRATH /S/ BETH BAKER /S/ JIM RICE /S/ PATRICIA COTTER /S/ JAMES JEREMIAH SHEA /S/ MICHAEL E WHEAT /S/ LAURIE McKINNON 1 MONTANA RULES OF PROFESSIONAL CONDUCT PREAMBLE: A LAWYER’S RESPONSIBILITIES (1) A lawyer shall always pursue the truth. (2) A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice. (3) As a representative of clients, a lawyer performs various functions. In performance of any functions a lawyer shall behave consistently with the requirements of honest dealings with others. As advisor, a lawyer endeavors to provide a client with an informed understanding of the client’s legal rights and obligations and explains their practical implications. As advocate, a lawyer asserts the client’s position under the rules of the adversary system. As negotiator, a lawyer seeks a result advantageous to the client but consistent with requirements under these Rules of honest dealings with others. As an evaluator, a lawyer acts by examining a client’s legal affairs and reporting about them. (4) In addition to these representational functions, a lawyer may serve as a third-party neutral, a nonrepresentational role helping the parties to resolve a dispute or other matter. Some of these Rules apply directly to lawyers who are or have served as third-party neutrals. See, e.g., Rules 1.12 and 2.3. In addition, there are Rules that apply to lawyers who are not active in the practice of law or to practicing lawyers even when they are acting in a nonprofessional capacity. For example, a lawyer who commits fraud in the conduct of a business is subject to discipline for engaging in conduct involving dishonesty, fraud, deceit or misrepresentation. See Rule 8.4. (5) In all professional functions a lawyer should be competent, prompt and diligent. Competence implies an obligation to keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology. A lawyer should maintain communication with a client concerning the representation. A lawyer should keep in confidence information relating to representation of a client except so far as disclosure is required or permitted by the Rules of Professional Conduct or other law. (6) A lawyer’s conduct should conform to the requirements of the law, both in professional service to clients and in the lawyer’s business and personal affairs. A lawyer should use the law’s procedures only for legitimate purposes and not to harass or intimidate others. A lawyer should demonstrate respect for the legal system and for those who serve it, including judges, other lawyers and public officials. While it is a lawyer’s duty, when necessary, to challenge the rectitude of official action, it is also a lawyer’s duty to uphold legal process. (7) As a public citizen, a lawyer should seek improvement of the law, access to the legal system, the administration of justice and the quality of service rendered by the legal profession. As a member of a learned profession, a lawyer should cultivate knowledge of the law beyond its use for clients, employ that knowledge in reform of the law and work to strengthen legal education. In addition, a lawyer should further the public’s understanding of and confidence in the rule of law and the justice system because legal institutions in a constitutional democracy depend on popular participation and support to 2 maintain their authority. A lawyer should be mindful of deficiencies in the administration of justice and of the fact that the poor, and sometimes persons who are not poor, cannot afford adequate legal assistance. Therefore, all lawyers should devote professional time and resources and use civic influence to ensure equal access to our system of justice for all those who because of economic or social barriers cannot afford or secure adequate legal counsel. A lawyer should aid the legal profession in pursuing these objectives and should help the bar regulate itself in the public interest. (8) Many of a lawyer’s professional responsibilities are prescribed in the Rules of Professional Conduct, as well as substantive and procedural law. However, a lawyer is also guided by personal conscience and the approbation of professional peers. A lawyer should strive to attain the highest level of skill, to improve the law and the legal profession and to exemplify the legal profession’s ideals of public service. (9) A lawyer’s responsibilities as a representative of clients, an officer of the legal system and a public citizen are harmonious. A lawyer can be a dedicated advocate on behalf of a client, even an unpopular one, but in doing so must comply with these Rules of Professional Conduct. So also, a lawyer can be sure that preserving client confidences ordinarily serves the public interest because people are more likely to seek legal advice, and thereby heed their legal obligations, when they know their communications will be private. (10) In the nature of law practice, however, conflicting responsibilities are encountered. Virtually all difficult ethical problems arise from conflict between a lawyer’s responsibilities to clients, to the legal system and to the lawyer’s own interest. The Rules of Professional Conduct often prescribe terms for resolving such conflicts. Within the framework of these Rules, however, many difficult issues of professional discretion can arise. Such issues must be resolved through the exercise of sensitive professional and moral judgment guided by the basic principles underlying the Rules. These principles include the lawyer’s obligation to protect and pursue a client’s legitimate interests, within the bounds of the law, while maintaining a professional, courteous and civil attitude toward all persons involved in the legal system. (11) The legal profession is self-governing. Although other professions also have been granted powers of self-government, the legal profession is unique in this respect because of the close relationship between the profession and the processes of government and law enforcement. This connection is manifested in the fact that ultimate authority over the legal profession is vested in the courts. (12) Self-regulation helps maintain the legal profession’s independence from government domination. An independent legal profession is an important force in preserving government under law, for abuse of legal authority is more readily challenged by a profession whose members are not dependent on government for the right to practice. (13) The legal profession’s relative autonomy carries with it special responsibilities of self-government. The profession has a responsibility to assure that its regulations are conceived in the public interest and not in furtherance of parochial or self-interested concerns of the bar. Every lawyer is responsible for observance of the Rules of Professional Conduct. A lawyer should also aid in securing their observance by other 3 lawyers. Neglect of these responsibilities compromises the independence of the profession and the public interest which it serves. (14) Lawyers play a vital role in the preservation of society. The fulfillment of this role requires an understanding by lawyers of their relationship to our legal system. All lawyers understand that, as officers of the court, they have a duty to be truthful, which engenders trust in both the profession and the rule of law. The Rules of Professional Conduct, when properly applied, serve to define that relationship. Trust in the integrity of the system and those who operate it is a basic necessity of the rule of law; accordingly truthfulness must be the hallmark of the legal profession, and the stock-in-trade of all lawyers. (15) The Rules of Professional Conduct are rules of reason. They should be interpreted with reference to the purposes of legal representation and of the law itself. Some of the Rules are imperatives, cast in the terms “shall” or “shall not.” These define proper conduct for purposes of professional discipline. Others, generally cast in the term “may,” are permissive and define areas under the Rules in which the lawyer has discretion to exercise professional judgment. No disciplinary action should be taken when the lawyer chooses not to act or acts within the bounds of such discretion. Other Rules define the nature of relationships between the lawyer and others. The Rules are thus partly obligatory and disciplinary and partly constitutive and descriptive in that they define a lawyer’s professional role. Many of the Comments use the term “should.” Comments do not add obligations to the Rules but provide guidance for practicing in compliance with the Rules. (16) The Rules presuppose a larger legal context shaping the lawyer’s role. That context includes court rules and statutes relating to matters of licensure, laws defining specific obligations of lawyers and substantive and procedural law in general. The Comments are sometimes used to alert lawyers to their responsibilities under such other law. (17) Compliance with the Rules, as with all law in an open society, depends primarily upon understanding and voluntary compliance, secondarily upon reinforcement by peer and public opinion and finally, when necessary, upon enforcement through disciplinary proceedings. The Rules do not, however, exhaust the moral and ethical considerations that should inform a lawyer, for no worthwhile human activity can be completely defined by legal rules. The Rules simply provide a framework for the ethical practice of law. (18) Furthermore, for purposes of determining the lawyer’s authority and responsibility, principles of substantive law external to these Rules determine whether a client-lawyer relationship exists. Most of the duties flowing from the client-lawyer relationship attach only after the client has requested the lawyer to render legal services and the lawyer has agreed to do so. But there are some duties, such as that of confidentiality under Rule 1.6, that attach when the lawyer agrees to consider whether a client-lawyer relationship shall be established. See Rule 1.20. Whether a client-lawyer relationship exists for any specific purpose can depend on the circumstances and may be a question of fact. (19) Under various legal provisions, including constitutional, statutory and common law, the responsibilities of government lawyers may include authority concerning legal matters that ordinarily reposes in the client in private client-lawyer relationships. For 4 example, a lawyer for a government agency may have authority on behalf of the government to decide upon settlement or whether to appeal from an adverse judgment. Such authority in various respects is generally vested in the attorney general and the state’s attorney in state government, and their federal counterparts, and the same may be true of other government law officers. Also, lawyers under the supervision of these officers may be authorized to represent several government agencies in intragovernmental legal controversies in circumstances where a private lawyer could not represent multiple private clients. These Rules do not abrogate any such authority. (20) Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process. The Rules presuppose that disciplinary assessment of a lawyer’s conduct will be made on the basis of the facts and circumstances as they existed at the time of the conduct in question and in recognition of the fact that a lawyer often has to act upon uncertain or incomplete evidence of the situation. Moreover, the Rules presuppose that whether or not discipline should be imposed for a violation, and the severity of a sanction, depend on all the circumstances, such as the willfulness and seriousness of the violation, extenuating factors and whether there have been previous violations. (21) Violation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached. In addition, violation of a Rule does not necessarily warrant any other nondisciplinary remedy, such as disqualification of a lawyer in pending litigation. The Rules are designed to provide guidance to lawyers and to provide a structure for regulating conduct through disciplinary agencies. They are not designed to be a basis for civil liability. Furthermore, the purpose of the Rules can be subverted when they are invoked by opposing parties as procedural weapons. The fact that a Rule provides just basis for self-assessment by a lawyer of his/her conduct or a basis for sanctioning a lawyer under the disciplinary process does not imply that an opposing party or lawyer has standing to seek enforcement of the Rules in a collateral proceeding or transaction outside of the disciplinary process. RULE 1.0: TERMINOLOGY (a) “Belief” or “believes” denotes that the person involved actually supposed the fact in question to be true. A person’s belief may be inferred from circumstances. (b) “Bona fide” denotes in or with good faith; honestly, openly, and sincerely; without deceit or fraud. (c) “Consult” or “consultation” denotes communication of information reasonably sufficient to permit the client to appreciate the significance of the matter in question. (d) “Confirmed in writing,” when used in reference to the informed consent of a person, denotes informed consent that is given in writing by the person or a writing that a lawyer promptly transmits to the person confirming an oral informed consent. See paragraph (g) for the definition of “informed consent.” If it is not feasible to obtain or transmit the writing at the time the person gives informed consent, then the lawyer must obtain or transmit it within a reasonable time thereafter. (e) “Firm” or “law firm” denotes a lawyer or lawyers in a law partnership, professional 5 corporation, sole proprietorship or other association authorized to practice law; or lawyers employed in a legal services organization or the legal department of a corporation or other organization. (f) “Fraud” or “fraudulent” denotes conduct that is fraudulent under the substantive or procedural law of the applicable jurisdiction and has a purpose to deceive. (g) “Informed consent” denotes the agreement by a person to a proposed course of conduct after the lawyer has communicated adequate information and explanation about the material risks of and reasonably available alternatives to the proposed course of conduct. (h) “Knowingly,” “known” or “knows” denotes actual knowledge of the fact in question. A person’s knowledge may be inferred from circumstances. (i) “Partner” denotes a member of a law partnership, a shareholder in a law firm organized as a professional corporation, or a member of an association authorized to practice law. (j) “Reasonable” or “reasonably” when used in relation to conduct by a lawyer denotes the conduct of a reasonably prudent and competent lawyer. (k) “Reasonable belief” or “reasonably believes” when used in reference to a lawyer denotes that the lawyer believes the matter in question and that the circumstances are such that the belief is reasonable. (l) “Reasonably should know” when used in reference to a lawyer denotes that a lawyer of reasonable prudence and competence would ascertain the matter in question. (m) “Screened” denotes the isolation of a lawyer from any participation in a matter through the timely imposition of procedures within a firm that are reasonably adequate under the circumstances to protect information that the isolated lawyer is obligated to protect under these Rules or other law. (n) “Substantial” when used in reference to degree or extent denotes a material matter of clear and weighty importance. (o) “Tribunal” denotes a court, an arbitrator in a binding arbitration proceeding or a legislative body, administrative agency or other body acting in an adjudicative capacity. A legislative body, administrative agency or other body acts in an adjudicative capacity when a neutral official, after the presentation of evidence or legal argument by a party or parties, will render a binding legal judgment directly affecting a party’s interests in a particular matter. (p) “Writing” or “written” denotes a tangible or electronic record of a communication or representation, including handwriting, typewriting, printing, Photostatting, photography, audio or video recording, and electronic communications. A “signed” writing includes the electronic equivalent of a signature, such as an electronic sound, symbol or process, which is attached to a writing and executed or adopted by a person with the intent to sign the writing. CLIENT-LAWYER RELATIONSHIP RULE 1.1: COMPETENCE 6 A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. RULE 1.2: SCOPE OF REPRESENTATION AND ALLOCATION OF AUTHORITY BETWEEN CLIENT AND LAWYER (a) Subject to paragraphs (c) and (d), a lawyer shall abide by a client’s decisions concerning the objectives of representation and, as required by Rule 1.4, shall consult with the client as to the means by which they are to be pursued. A lawyer may take such action on behalf of the client as is impliedly authorized to carry out the representation. A lawyer shall abide by a client’s decision whether to settle a matter. In a criminal case, the lawyer shall abide by the client’s decision, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial and whether the client will testify. (b) A lawyer’s representation of a client, including representation by appointment, does not constitute an endorsement of the client’s political, economic, social or moral views or activities. (c) A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent in writing. (1) The client’s informed consent must be confirmed in writing unless: (i) the representation of the client consists solely of telephone consultation; (ii) the representation is provided by a lawyer employed by a nonprofit legal services program or participating in a nonprofit court-annexed legal services program and the lawyer’s representation consists solely of providing information and advice or the preparation of court-approved legal forms; or (iii) the court appoints the attorney for a limited purpose that is set forth in the appointment order. (2) If the client gives informed consent in writing signed by the client, there shall be a presumption that: (i) the representation is limited to the attorney and the services described in the writing; and (ii) the attorney does not represent the client generally or in matters other than those identified in the writing. (d) A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent, but a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law. RULE 1.3: DILIGENCE A lawyer shall act with reasonable diligence and promptness in representing a client. 7 RULE 1.4: COMMUNICATION (a) A lawyer shall: (1) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent, as defined in Rule 1.0(g), is required by these Rules; (2) reasonably consult with the client about the means by which the client’s objectives are to be accomplished; (3) keep the client reasonably informed about the status of the matter; (4) promptly comply with reasonable requests for information; and (5) consult with the client about any relevant limitation on the lawyer’s conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. RULE 1.5: FEES (a) A lawyer shall not make an agreement for, charge or collect an unreasonable fee or an unreasonable amount for expenses. The factors to be considered in determining the reasonableness of a fee include the following: (1) the time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or by the circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. (b) The scope of the representation and the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client in writing, before or within a reasonable time after commencing the representation, except when the lawyer will charge a regularly represented client on the same basis or rate. Any changes in the basis or rate of the fee or expenses shall also be communicated in writing. This paragraph does not apply in any matter in which it is reasonably foreseeable that total cost to a client, including attorney fees, will be $500 or less. (c) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (d) or other law. A contingent fee agreement shall be in a writing signed by the client and shall state the method by which the fee is to be determined, including the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal; litigation and other expenses to be deducted from the recovery; and whether such 8 expenses are to be deducted before or after the contingent fee is calculated. The agreement must clearly notify the client of any expenses for which the client will be liable whether or not the client is the prevailing party. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement stating the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. (d) A lawyer shall not enter into an arrangement for, charge or collect: (1) any fee in a domestic relations matter, the payment or amount of which is contingent upon the securing of a divorce or upon the amount of maintenance or support or property settlement in lieu thereof; or (2) a contingent fee for representing a defendant in a criminal case. (e) A division of a fee between lawyers who are not in the same firm may be made only if: (1) the division is in proportion to the services performed by each lawyer or each lawyer assumes joint responsibility for the representation; (2) the client agrees to the arrangement, including the share each lawyer will receive, and the agreement is confirmed in writing; and (3) the total fee is reasonable. RULE 1.6: CONFIDENTIALITY OF INFORMATION (a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). (b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary: (1) to prevent reasonably certain death or substantial bodily harm; (2) to secure legal advice about the lawyer’s compliance with these Rules; (3) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved or to respond to allegations in any proceeding concerning the lawyer’s representation of the client; or (4) to comply with other law or a court order. (c) A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client. RULE 1.7: CONFLICT OF INTEREST: CURRENT CLIENTS (a) Except as provided in paragraph (b), a lawyer shall not represent a client if the representation involves a concurrent conflict of interest. A concurrent conflict of interest exists if: (1) the representation of one client will be directly adverse to another client; or (2) there is a significant risk that the representation of one or more clients will be 9 materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer. (b) Notwithstanding the existence of a concurrent conflict of interest under paragraph (a), a lawyer may represent a client if: (1) the lawyer reasonably believes that the lawyer will be able to provide competent and diligent representation to each affected client; (2) the representation is not prohibited by law; (3) the representation does not involve the assertion of a claim by one client against another client represented by the lawyer in the same litigation or other proceeding before a tribunal; and (4) each affected client gives informed consent, confirmed in writing. RULE 1.8: CONFLICT OF INTEREST: CURRENT CLIENTS: SPECIFIC RULES (a) A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless: (1) the transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing to the client in a manner that can be reasonably understood by the client; (2) in matters in which a lawyer wishes to assert a retaining lien against client property, papers or materials in the lawyer’s possession to secure payment for the lawyer’s services and costs advanced relating to such property, papers or materials, a written agreement for such a lien shall expressly set forth the limitations contained in paragraph (i)(3); (3) the client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and (4) the client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction. (b) A lawyer shall not use information relating to representation of a client to the disadvantage of the client unless the client gives informed consent, except as permitted or required by these Rules. (c) A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient of the gift is related to the client. For purposes of this paragraph, related persons include a spouse, child, grandchild, parent, grandparent or other relative. (d) Prior to the conclusion of representation of a client, a lawyer shall not make or negotiate an agreement giving the lawyer literary or media rights to a portrayal or account based in substantial part on information relating to the representation. (e) A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation, except that: 10 (1) a lawyer may advance court costs and expenses of litigation, the repayment of which may be contingent on the outcome of the matter; (2) a lawyer representing an indigent client may pay court costs and expenses of litigation on behalf of the client; (3) a lawyer may, for the sole purpose of providing basic living expenses, guarantee a loan from a regulated financial institution whose usual business involves making loans if such loan is reasonably needed to enable the client to withstand delay in litigation that would otherwise put substantial pressure on the client to settle a case because of financial hardship rather than on the merits, provided the client remains ultimately liable for repayment of the loan without regard to the outcome of the litigation and, further provided that neither the lawyer nor anyone on his/her behalf offers, promises or advertises such financial assistance before being retained by the client. (f) A lawyer shall not accept compensation for representing a client from one other than the client unless: (1) the client gives written informed consent; (2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and (3) information relating to representation of a client is protected as required by Rule 1.6. (g) A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients, or in a criminal case an aggregated agreement as to guilty or nolo contendere pleas, unless each client gives informed consent, in a writing signed by the client. The lawyer’s disclosure shall include the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement. (h) A lawyer shall not: (1) make an agreement prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement; or (2) settle a claim or potential claim for such liability with an unrepresented client or former client unless that person is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel in connection therewith. (i) A lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation the lawyer is conducting for a client, except that the lawyer: (1) may acquire and assert a charging lien only against causes of action or counterclaims in litigation pursuant to and only to the extent specified in MCA 37- 61-420(2); such a charging lien does not extend to other client property, papers or materials in the lawyer’s possession, to any matter not in litigation, or to any matter otherwise not covered by the specific language of MCA 37-61-420(2); (2) may contract with a client for a reasonable contingent fee in a civil case; and (3) may not acquire or assert a retaining lien to secure payment due for the 11 lawyer’s services against any client property, papers or materials other than those related to the matter for which payment has not been made and, upon termination of representation, shall deliver to the client any client property, papers or materials reasonably necessary to protect the client’s interest in the matter to which the property, papers or materials relate as provided in Rule 1.16(d). (j) A lawyer shall not have sexual relations with a client unless a consensual sexual relationship existed between them when the client-lawyer relationship commenced. (k) While lawyers are associated in a firm, a prohibition in the foregoing paragraphs (a) through (i) that applies to any one of them shall apply to all of them. RULE 1.9: DUTIES TO FORMER CLIENTS (a) A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing. (b) A lawyer shall not knowingly represent a person in the same or a substantially related matter in which a firm with which the lawyer formerly was associated had previously represented a client: (1) whose interests are materially adverse to that person; and (2) about whom the lawyer had acquired information protected by Rules 1.6 and 1.9(c) that is material to the matter; unless the former client gives informed consent, confirmed in writing. (c) A lawyer who has formerly represented a client in a matter or whose present or former firm has formerly represented a client in a matter shall not thereafter: (1) use information relating to the representation to the disadvantage of the former client except as these Rules would permit or require with respect to a client, or when the information has become generally known; or (2) reveal information relating to the representation except as these Rules would permit or require with respect to a client. RULE 1.10: IMPUTATION OF CONFLICTS OF INTEREST: GENERAL RULE (a) While lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9 unless the prohibition is based on a personal interest of the prohibited lawyer and does not present a significant risk of materially limiting the representation of the client by the remaining lawyers in the firm. (b) When a lawyer has terminated an association with a firm, the firm is not prohibited from thereafter representing a person with interests materially adverse to those of a client represented by the formerly associated lawyer and not currently represented by the firm, unless: (1) the matter is the same or substantially related to that in which the formerly associated lawyer represented the client; and (2) any lawyer remaining in the firm has information protected by Rules 1.6 and 12 1.9(c) that is material to the matter. (c) When a lawyer becomes associated with a firm, no lawyer associated in the firm shall knowingly represent a person in a matter in which that lawyer is disqualified under Rule 1.9 unless: (1) the personally disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is promptly given to any affected former client to enable it to ascertain compliance with the provisions of this Rule. (d) A disqualification prescribed by this Rule may be waived by the affected client under the conditions stated in Rule 1.7. (e) The disqualification of lawyers associated in a firm with former or current government lawyers is governed by Rule 1.11. RULE 1.11: SPECIAL CONFLICTS OF INTEREST FOR FORMER AND CURRENT GOVERNMENT OFFICERS AND EMPLOYEES (a) Except as law may otherwise expressly permit, a lawyer who has formerly served as a public officer or employee of the government: (1) is subject to Rule 1.9(c); and (2) shall not otherwise represent a client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee, unless the appropriate government agency gives its informed consent, confirmed in writing, to the representation. (b) When a lawyer is disqualified from representation under paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter unless: (1) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is promptly given to the appropriate government agency to enable it to ascertain compliance with the provisions of this Rule. (c) Except as law may otherwise expressly permit, a lawyer having information that the lawyer knows is confidential government information about a person acquired when the lawyer was a public officer or employee, may not represent a private client whose interests are adverse to that person in a matter in which the information could be used to the material disadvantage of that person. As used in this Rule, the term “confidential government information” means information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has a legal privilege not to disclose and which is not otherwise available to the public. A firm with which that lawyer is associated may undertake or continue representation in the matter only if the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom. (d) Except as law may otherwise expressly permit, a lawyer currently serving as a public officer or employee: 13 (1) is subject to Rules 1.7 and 1.9; and (2) shall not: (i) participate in a matter in which the lawyer participated personally and substantially while in private practice or nongovernmental employment, unless the appropriate government agency gives its informed consent, confirmed in writing; or (ii) negotiate for private employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially, except that a lawyer serving as a law clerk to a judge, other adjudicative officer or arbitrator may negotiate for private employment as permitted by Rule 1.12(b) and subject to the conditions stated in Rule 1.12(b). (e) As used in this Rule, the term “matter” includes: (1) any judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, investigation, charge, accusation, arrest or other particular matter involving a specific party or parties; and (2) any other matter covered by the conflict of interest rules of the appropriate government agency. RULE 1.12: FORMER JUDGE, ARBITRATOR, SETTLEMENT MASTER, MEDIATOR, OR OTHER THIRD-PARTY NEUTRAL (a) Except as stated in paragraph (d), a lawyer shall not represent anyone in connection with a matter in which the lawyer participated personally and substantially as a judge or other adjudicative officer or law clerk to such a person or as an arbitrator, settlement master, mediator or other third-party neutral, unless all parties to the proceeding give informed consent, confirmed in writing. (b) A lawyer shall not negotiate for employment with any person who is involved as a party or as lawyer for a party in a matter in which the lawyer is participating personally and substantially as a judge or other adjudicative officer or as an arbitrator, settlement master, mediator or other third-party neutral. A lawyer serving as a law clerk to a judge or other adjudicative officer may negotiate for employment with a party or lawyer involved in a matter in which the clerk is participating personally and substantially, but only after the lawyer has notified the judge or other adjudicative officer. (c) If a lawyer is disqualified by paragraph (a), no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in the matter unless: (1) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is promptly given to the parties and any appropriate tribunal to enable them to ascertain compliance with the provisions of this Rule. (d) An arbitrator selected as a partisan of a party in a multimember arbitration panel is not prohibited from subsequently representing that party. 14 RULE 1.13: ORGANIZATION AS CLIENT (a) A lawyer employed or retained by an organization represents the organization acting through its duly authorized constituents. (b) If a lawyer for an organization knows that an officer, employee or other person associated with the organization is engaged in action, intends to act or refuses to act in a matter related to the representation that is a violation of a legal obligation to the organization, or a violation of law which reasonably might be imputed to the organization, and is likely to result in substantial injury to the organization, the lawyer shall proceed as is reasonably necessary in the best interest of the organization. In determining how to proceed, the lawyer shall give due consideration to the seriousness of the violation and its consequences, the scope and nature of the lawyer’s representation, the responsibility in the organization and the apparent motivation of the person involved, the policies of the organization concerning such matters and any other relevant considerations. Any measures taken shall be designed to minimize disruption of the organization and the risk of revealing information relating to the representation to persons outside the organization. Such measures may include among others: (1) asking for reconsideration of the matter; (2) advising that a separate legal opinion on the matter be sought for presentation to appropriate authority in the organization; and (3) referring the matter to higher authority in the organization, including, if warranted by the seriousness of the matter, referral to the highest authority that can act on behalf of the organization as determined by applicable law. (c) If, despite the lawyer’s efforts in accordance with paragraph (b), the highest authority that can act on behalf of the organization insists upon action, or a refusal to act, that is clearly a violation of law and is likely to result in substantial injury to the organization, the lawyer may resign in accordance with Rule 1.16. (d) In dealing with an organization’s directors, officers, employees, members, shareholders or other constituents, a lawyer shall explain the identity of the client when the lawyer knows or reasonably should know that the organization’s interests are adverse to those of the constituents with whom the lawyer is dealing. (e) A lawyer representing an organization may also represent any of its directors, officers, employees, members, shareholders or other constituents, subject to the provisions of Rule 1.7. If the organization’s consent to the dual representation is required by Rule 1.7, the consent shall be given by an appropriate official of the organization other than the individual who is to be represented, or by the shareholders. RULE 1.14: CLIENT WITH DIMINISHED CAPACITY (a) When a client’s capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client. (b) When the lawyer reasonably believes that the client has diminished capacity, is at risk of substantial physical, financial or other harm unless action is taken and cannot 15 adequately act in the client’s own interest, the lawyer may take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian. (c) Information relating to the representation of a client with diminished capacity is protected by Rule 1.6. When taking protective action pursuant to paragraph (b), the lawyer is impliedly authorized under Rule 1.6(a) to reveal information about the client, but only to the extent reasonably necessary to protect the client’s interests. RULE 1.15: SAFEKEEPING PROPERTY (a) A lawyer shall hold property of clients or third persons that is in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Funds shall be kept in accordance with Rule 1.18 and this Rule. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. (c) When in the course of representation a lawyer is in possession of property in which both the lawyer and another person claim interests, the property shall be kept separate by the lawyer until there is an accounting and severance of their interests. If a dispute arises concerning their respective interests, the portion in dispute shall be kept separate by the lawyer until the dispute is resolved. RULE 1.16: DECLINING OR TERMINATING REPRESENTATION (a) Except as stated in paragraph (c), a lawyer shall not represent a client or, where representation has commenced, shall withdraw from the representation of a client if: (1) the representation will result in violation of the Rules of Professional Conduct or other law; (2) the lawyer’s physical or mental condition materially impairs the lawyer’s ability to represent the client; or (3) the lawyer is discharged. (b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if: (1) withdrawal can be accomplished without material adverse effect on the interests of the client; (2) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent; (3) the client has used the lawyer’s services to perpetrate a crime or fraud; 16 (4) the client insists upon taking action that the lawyer considers repugnant or with which the lawyer has a fundamental disagreement; (5) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled; (6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or (7) other good cause for withdrawal exists. (c) A lawyer must comply with applicable law requiring notice to or permission of a tribunal when terminating a representation. When ordered to do so by a tribunal, a lawyer shall continue representation notwithstanding good cause for terminating the representation. (d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payment of fee or expense that has not been earned or incurred. A lawyer is entitled to retain and is not obliged to deliver to a client or former client papers or materials personal to the lawyer or created or intended for internal use by the lawyer except as required by the limitations on the retaining lien in Rule 1.8(i). Except for those client papers which a lawyer may properly retain under the preceding sentence, a lawyer shall deliver either the originals or copies of papers or materials requested or required by a client or former client and bear the copying costs involved. RULE 1.17: GOVERNMENT EMPLOYMENT An attorney employed full time by the State of Montana or a political subdivision shall not accept other employment during the course of which it would be possible to use or otherwise rely on information obtained by reason of government employment that is injurious, confidential or privileged and not otherwise discoverable. RULE 1.18: INTEREST ON LAWYER TRUST ACCOUNTS (IOLTA) PROGRAM (a) Purpose. The purpose of the Interest on Lawyer Trust Accounts (IOLTA) program is to provide funds for the Montana Justice Foundation to pay the reasonable costs of administering the program and to make grants to entities with missions within the following general categories: (1) Providing legal services, through both paid staff program(s) and pro bono program(s), to Montana’s low income citizens who would otherwise be unable to obtain legal assistance; (2) promoting a knowledge and awareness of the law; and (3) improving the administration of justice. (b) Required participation. IOLTA program participation is mandatory, except as provided in subsection (d), below. Every non-exempt lawyer admitted to practice in 17 Montana, and/or every law firm composed of any such lawyers, which receives client funds, shall establish and maintain an interest-bearing trust account for pooled client funds, termed an “IOLTA Trust Account.” Each lawyer/firm shall also establish separate interest-bearing trust accounts for individual clients, termed “Client Trust Accounts,” when appropriate pursuant to this Rule. (c) Administration. (1) Deposits of clients’ funds. (A) All client funds paid to a lawyer/firm, including advances for costs and expenses, shall be deposited and maintained in one or more identifiable interest-bearing trust accounts (Trust Accounts) in the State of Montana. No funds belonging to the lawyer/firm shall be deposited into a Trust Account except: (i) funds reasonably sufficient to pay account charges not offset by interest; (ii) an amount to meet a minimum balance requirement for the waiver of service charges; and/or (iii) funds belonging in part to a client and in part presently or potentially to the lawyer/firm, but the portion belonging to the lawyer/firm shall be withdrawn when due unless the right of the lawyer/firm to such funds is disputed by the client, in which event the disputed portion shall remain in the account until the dispute is resolved. (B) The lawyer/firm shall comply with all Rules relating to preserving the identity of clients’ funds and property. (C) Every Trust Account shall be established with a federally-insured and state or federally regulated financial institution authorized by federal or state law to do business in Montana. Funds in each Trust Account shall be subject to immediate withdrawal. (D) The interest rate payable on a Trust Account shall not be less than the rate paid to non-lawyer depositors. Higher rates offered for deposits meeting certain criteria, such as certificates of deposit, may be obtained on Trust Account funds if immediate withdrawal is available. (E) Every Trust Account shall bear the name of the lawyer/firm and be clearly designated as either an IOLTA Trust Account or a Client Trust Account established under this Rule. (2) IOLTA Trust Accounts. Every IOLTA Trust Account shall comply with the following provisions: (A) The lawyer/firm shall maintain all client funds that are either nominal in amount or to be held for a short period of time in an IOLTA Trust Account. (B) No client may elect whether his/her funds should be deposited in an IOLTA Trust Account, receive interest or dividends earned on funds in an IOLTA Trust Account, or compel a lawyer/firm to invest funds that are 18 nominal in amount or to be held for a short period of time in a Client Trust Account. (C) The determination of whether a client’s funds are nominal in amount or to be held for a short period of time rests solely in the sound judgment of each lawyer/firm. No charge of professional misconduct or ethical impropriety shall result from a lawyer’s exercise of good faith judgment in that regard. (D) To determine if a client’s funds should be deposited in an IOLTA Trust Account, a lawyer/firm may be guided by considering: (i) the amount of interest the funds would earn during the period they are expected to be deposited; (ii) the costs of establishing and administering the account, including the lawyer’s/firm’s fees, accounting fees and tax reporting requirements; (iii) the amount of funds involved, the period of time they are expected to be held and the financial institution’s minimum balance requirements and service charges; (iv) the financial institution’s ability to calculate and pay interest to individual clients; and (v) the likelihood of delay in the relevant transaction or proceeding. (E) The lawyer/firm shall require the financial institution in which the IOLTA Trust Account is established to: (i) remit to the Montana Justice Foundation, at least quarterly, all interest or dividends on the average monthly balance in the IOLTA Trust Account, or as otherwise computed according to the institution’s standard accounting practices, less reasonable service fees, if any; (ii) with each remittance, provide the Montana Justice Foundation and the lawyer/firm with a statement showing for which lawyer/firm the remittance is sent, the period covered, the rate of interest applied, the total amount of interest earned, any service fees assessed against the account and the net amount of interest remitted; (iii) charge no fees against an IOLTA Trust Account greater than fees charged to non-lawyer depositors for similar accounts, or which are otherwise unreasonable; and (iv) collect no fees from the principal deposited in the IOLTA Trust Account. (F) Annually the Montana Justice Foundation shall make available a list of all financial institutions offering IOLTA accounts and meeting this Rule’s IOLTA depository qualifying requirements. Lawyers/firms shall be entitled to rely on the most recently published list for purposes of IOLTA Rule compliance. The Montana Justice Foundation shall pay all service charges incurred in operating an IOLTA Trust Account from IOLTA funds, to the 19 extent the charges exceed those incurred in operating non-interest-bearing checking accounts at the same financial institution. (G) Confidentiality. The Montana Justice Foundation shall protect the confidentiality of information regarding Trust Accounts pursuant to this Rule. (3) Non-IOLTA client Trust Accounts. All client funds shall be deposited in an IOLTA Trust Account, unless they are deposited in a separate interest-bearing account for a particular client’s matter with the net interest paid to the client. Such interest must be held in trust as the property of the client as provided in this Rule for the principal funds of the client. (d) A lawyer/firm is exempt from this Rule’s requirements if: (1) the nature of their practice is such that no client funds are ever received requiring a Trust Account; (2) the lawyer practices law in another jurisdiction and not in Montana; (3) the lawyer is a full-time judge, or government, military or inactive lawyer; or (4) the Montana Justice Foundation’s Board of Directors, on its own motion, exempts the lawyer/firm from participation in the program for a period of no more than two years when: (A) service charges on the lawyer’s/firm’s Trust Account equal or exceed any interest generated; or (B) no financial institution in the county where the lawyer/firm does business will accept IOLTA accounts. (e) Lawyer filings and records. (1) Filings. Each lawyer/firm shall file an annual certificate of compliance with or exemption from this Rule with the Montana Justice Foundation. The certification must include the name of the lawyer/firm listed on the account, the account number, and the financial institution name and address. The certification may be made in conjunction with the annual dues billing process. Failure to provide the certification may result in suspension from the practice of law in this state until the lawyer complies with the requirements of this Rule. (2) Records. Lawyer trust accounts shall be maintained as prescribed by the Montana Supreme Court in the “Trust Account Maintenance and Audit Requirements” (adopted February 27, 1989). (f) Implementation. Implementation will be effected through this Rule and the Rules of the State Bar of Montana, all as amended and approved by the Montana Supreme Court. RULE 1.19: SALE OF LAW PRACTICE A lawyer or a law firm may sell or purchase a law practice, including good will, if the following conditions are satisfied: (a) The seller ceases to engage in the private practice of law in the geographic area in which the practice has been conducted. (b) The entire practice is sold to one or more lawyers or law firms. (c) Actual written notice is given to each of the seller’s clients regarding: 20 (1) the proposed sale; (2) the client’s right to retain other counsel or to take possession of the file; and (3) the fact that the client’s consent to the sale will be presumed if the client does not take any action or does not otherwise object within ninety (90) days of receipt of the notice. If a client cannot be given notice, the representation of that client may be transferred to the purchaser only upon entry of an order so authorizing by a court having jurisdiction. The seller may disclose to the court in camera information relating to the representation only to the extent necessary to obtain an order authorizing the transfer of a file. (d) The fees charged clients shall not be increased by reason of the sale. RULE 1.20: DUTIES TO PROSPECTIVE CLIENTS (a) A person who consults with or has had consultations with a lawyer about the possibility of forming a client-lawyer relationship with respect to a matter is a prospective client. (b) Even when no client-lawyer relationship ensues, a lawyer who has had consultations with a prospective client shall not use or reveal information learned in the consultation(s), except as Rule 1.9 would permit with respect to information of a former client. (c) A lawyer subject to paragraph (b) shall not represent a client with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful to that person in the matter, except as provided in paragraph (d). If a lawyer is disqualified from representation under this paragraph, no lawyer in a firm with which that lawyer is associated may knowingly undertake or continue representation in such a matter, except as provided in paragraph (d). (d) Representation is permissible if both the affected client and the prospective client have given informed consent, confirmed in writing, or: (1) the disqualified lawyer is timely screened from any participation in the matter and is apportioned no part of the fee therefrom; and (2) written notice is promptly given to the prospective client. COUNSELOR RULE 2.1: ADVISOR In representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to law but to other considerations such as moral, economic, social and political factors that may be relevant to the client’s situation. RULE 2.2: EVALUATION FOR USE BY THIRD PERSONS (a) A lawyer may provide an evaluation of a matter affecting a client for the use of someone other than the client if the lawyer reasonably believes that making the evaluation is compatible with other aspects of the lawyer’s relationship with the client. 21 (b) When the lawyer knows or reasonably should know that the evaluation is likely to affect the client’s interests materially and adversely, the lawyer shall not provide the evaluation unless the client gives informed consent. (c) Except as disclosure is authorized in connection with a report of an evaluation, information relating to the evaluation is otherwise protected by Rule 1.6. RULE 2.3: LAWYERS SERVING AS THIRD-PARTY NEUTRAL (a) A lawyer serves as a third-party neutral when the lawyer assists two or more persons who are not clients of the lawyer to reach a resolution of a dispute or other matter that has arisen between them. Service as a third-party neutral may include service as an arbitrator, settlement master, mediator or in such other capacity as will enable the lawyer to assist the parties to resolve the matter. (b) A lawyer serving as a third-party neutral shall inform all parties that the lawyer is not representing them. The lawyer shall explain the difference between the lawyer’s role as a third-party neutral and a lawyer’s role as one who represents a client. ADVOCATE RULE 3.1: MERITORIOUS CLAIMS AND CONTENTIONS (a) A lawyer shall not bring or defend a proceeding, or assert or controvert an issue therein: (1) without having first determined through diligent investigation that there is a bona fide basis in law and fact for the position to be advocated; (2) for the purpose of harassment, delay, advancement of a nonmeritorious claim or solely to gain leverage; or (3) to extend, modify or reverse existing law unless a bona fide basis in law and fact exists for advocating doing so. (b) A lawyer for the defendant in a criminal proceeding, or the respondent in a proceeding that could result in incarceration, may nevertheless so defend the proceeding as to require that every element of the case be established. RULE 3.2: EXPEDITING LITIGATION A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client. RULE 3.3: CANDOR TOWARD THE TRIBUNAL (a) A lawyer shall not knowingly: (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer; (2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the client and not disclosed by opposing counsel; or (3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s 22 client, or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false. (b) A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. (c) The duties stated in paragraphs (a) and (b) continue to the conclusion of the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6. (d) In an ex parte proceeding, a lawyer shall inform the tribunal of all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse. RULE 3.4: FAIRNESS TO OPPOSING PARTY AND COUNSEL A lawyer shall not: (a) unlawfully obstruct another party’s access to evidence, unlawfully alter, destroy or conceal a document or other material having potential evidentiary value, or counsel or assist another person to do any such act; (b) falsify evidence, counsel or assist a witness to testify falsely, or offer an inducement to a witness that is prohibited by law; (c) knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists; (d) in pretrial procedure, make a frivolous discovery request or fail to make reasonably diligent effort to comply with a legally proper discovery request by an opposing party; (e) in trial, allude to any matter that the lawyer does not reasonably believe is relevant or that will not be supported by admissible evidence, assert personal knowledge of facts in issue except when testifying as a witness, or state a personal opinion as to the justness of a cause, the credibility of a witness, the culpability of a civil litigant or the guilt or innocence of an accused; or (f) request a person other than a client to refrain from voluntarily giving relevant information to another party unless: (1) the person is a relative or an employee or other agent of a client; and (2) the lawyer reasonably believes that the person’s interests will not be adversely affected by refraining from giving such information. RULE 3.5: IMPARTIALITY AND DECORUM OF THE TRIBUNAL A lawyer shall not: (a) seek to influence a judge, juror, prospective juror or other official by means prohibited by law; (b) communicate ex parte with such a person except as permitted by law; or 23 (c) engage in conduct intended to disrupt a tribunal. RULE 3.6: TRIAL PUBLICITY (a) A lawyer who is participating or has participated in the investigation or litigation of a matter shall not make an extrajudicial statement that the lawyer knows or reasonably should know will be disseminated by means of public communication and will have a substantial likelihood of materially prejudicing an adjudicative proceeding in the matter. (b) Notwithstanding paragraph (a), a lawyer may state: (1) the claim, offense or defense involved and, except when prohibited by law, the identity of the persons involved; (2) information contained in a public record; (3) that an investigation of a matter is in progress; (4) the scheduling or result of any step in litigation; (5) a request for assistance in obtaining evidence and information necessary thereto; (6) a warning of danger concerning the behavior of a person involved, when there is reason to believe that there exists the likelihood of substantial harm to an individual or to the public interest; and (7) in a criminal case, in addition to subparagraphs (1) through (6): (i) the identity, residence, occupation and family status of the accused; (ii) if the accused has not been apprehended, information necessary to aid in apprehension of that person; (iii) the fact, time and place of arrest; and (iv) the identity of investigating and arresting officers or agencies and the length of the investigation. (c) Notwithstanding paragraph (a), a lawyer may make a statement that a reasonable lawyer would believe is required to protect a client from the substantial undue prejudicial effect of recent publicity not initiated by the lawyer or the lawyer’s client. A statement made pursuant to this paragraph shall be limited to such information as is necessary to mitigate the recent adverse publicity. (d) No lawyer associated in a firm or government agency with a lawyer subject to paragraph (a) shall make a statement prohibited by paragraph (a). RULE 3.7: LAWYER AS WITNESS (a) A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness unless: (1) the testimony relates to an uncontested issue; (2) the testimony relates to the nature and value of legal services rendered in the case; or (3) disqualification of the lawyer would work substantial hardship on the client. (b) A lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9. 24 RULE 3.8: SPECIAL RESPONSIBILITIES OF A PROSECUTOR The prosecutor in a criminal case shall: (a) refrain from prosecuting a charge that the prosecutor knows is not supported by probable cause; (b) make reasonable efforts to assure that the accused has been advised of the right to, and the procedure for obtaining, counsel and has been given reasonable opportunity to obtain counsel; (c) not seek to obtain from an unrepresented accused a waiver of important pretrial rights, such as the right to a preliminary hearing; (d) make timely disclosure to the defense of all evidence or information known to the prosecutor that tends to negate the guilt of the accused or mitigates the offense, and, in connection with sentencing, disclose to the defense and to the tribunal all unprivileged mitigating information known to the prosecutor, except when the prosecutor is relieved of this responsibility by a protective order of the tribunal; (e) not subpoena a lawyer in a grand jury or other criminal proceeding to present evidence about a past or present client unless the prosecutor reasonably believes: (1) the information sought is not protected from disclosure by any applicable privilege; (2) the evidence sought is essential to the successful completion of an ongoing investigation or prosecution; and (3) there is no other feasible alternative to obtain the information; (f) except for statements that are necessary to inform the public of the nature and extent of the prosecutor’s action and that serve a legitimate law enforcement purpose, refrain from making extrajudicial comments that have a substantial likelihood of heightening public condemnation of the accused and exercise reasonable care to prevent investigators, law enforcement personnel, employees or other persons assisting or associated with the prosecutor in a criminal case from making an extrajudicial statement that the prosecutor would be prohibited from making under Rule 3.6 or this Rule consistent with the Confidential Criminal Justice Information Act. RULE 3.9: ADVOCATE IN NONADJUDICATIVE PROCEEDINGS A lawyer representing a client before a legislative body or administrative agency in a nonadjudicative proceeding shall disclose that the appearance is in a representative capacity and shall conform to the provisions of Rules 3.3(a) through (c), 3.4(a) through (c), and 3.5. OTHER THAN CLIENTS RULE 4.1: TRUTHFULNESS IN STATEMENT TO OTHERS In the course of representing a client a lawyer shall not knowingly: (a) make a false statement of material fact or law to a third person; or (b) fail to disclose a material fact to a third person when disclosure is necessary to avoid assisting a criminal or fraudulent act by a client, unless disclosure is prohibited by Rule 25 1.6. RULE 4.2: COMMUNICATION WITH PERSON REPRESENTED BY COUNSEL (a) In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized to do so by law or a court order. (b) An otherwise unrepresented person to whom limited representation is being provided or has been provided in accordance with Rule 1.2(c) is considered to be unrepresented for purposes of this Rule unless the opposing party or lawyer has been provided with a written notice of appearance under which, or a written notice of time period during which, he or she is to communicate only with the limited representation lawyer as to the subject matter within the limited scope of the representation. RULE 4.3: DEALING WITH UNREPRESENTED PERSON (a) In dealing on behalf of a client with a person who is not represented by counsel, a lawyer shall not state or imply that the lawyer is disinterested. When the lawyer knows or reasonably should know that the unrepresented person misunderstands the lawyer’s role in the matter, the lawyer shall make reasonable efforts to correct the misunderstanding. The lawyer shall not give legal advice to an unrepresented person, other than the advice to secure counsel, if the lawyer knows or reasonably should know that the interests of such a person are or have a reasonable possibility of being in conflict with the interests of the client. (b) An otherwise unrepresented person to whom limited representation is being provided or has been provided in accordance with Rule 1.2(c) is considered to be unrepresented for purposes of this Rule unless the opposing party or lawyer has been provided with a written notice of appearance under which, or a written notice of time period during which, he or she is to communicate only with the limited representation lawyer as to the subject matter within the limited scope of the representation. RULE 4.4: RESPECT FOR RIGHTS OF THIRD PERSONS (a) In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person. (b) A lawyer who receives a document or electronically stored information relating to the representation of the lawyer’s client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender. LAW FIRMS AND ASSOCIATIONS RULE 5.1: RESPONSIBILITIES OF PARTNERS, MANAGERS, AND 26 SUPERVISORY LAWYERS (a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct. (b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct. (c) A lawyer within a firm shall be responsible for another lawyer in the firm’s violation of the Rules of Professional Conduct if: (1) the lawyer orders or, with knowledge of the specific conduct, ratifies or ignores the conduct involved; or (2) the lawyer is a partner or has comparable managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action. RULE 5.2: RESPONSIBILITIES OF A SUBORDINATE LAWYER (a) A lawyer is bound by the Rules of Professional Conduct notwithstanding that the lawyer acted at the direction of another person. (b) A subordinate lawyer does not violate the Rules of Professional Conduct if the lawyer acts in accordance with the supervisory lawyer’s reasonable resolution of an arguable question of professional duty. RULE 5.3: RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS With respect to a nonlawyer employed or retained by or associated with a lawyer: (a) a partner, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer; (b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer; and (c) a lawyer shall be responsible for conduct of such a person that would be a violation of the Rules of Professional Conduct if engaged in by a lawyer if: (1) the lawyer orders or, with the knowledge of the specific conduct, ratifies or ignores the conduct involved; or (2) the lawyer is a partner or has comparable managerial authority in the law firm in which the person is employed, or has direct supervisory authority over the person, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action. 27 RULE 5.4: PROFESSIONAL INDEPENDENCE OF A LAWYER (a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that: (1) an agreement by a lawyer with the lawyer’s firm, partner or associate may provide for the payment of money, over a reasonable period of time after the lawyer’s death, to the lawyer’s estate or to one or more specified persons; (2) a lawyer who purchases the practice of a deceased, disabled or disappeared lawyer may, pursuant to the provisions of Rule 1.19, pay to the estate or other representative of that lawyer the agreed-upon purchase price; (3) a lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit- sharing arrangement; and (4) a lawyer may share court-awarded legal fees with a nonprofit organization that employed, retained or recommended employment of the lawyer in the matter. (b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law. (c) A lawyer shall not permit a person who recommends, employs or pays the lawyer to render legal services for another to direct or regulate the lawyer’s professional judgment in rendering such legal services. (d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if: (1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration; (2) a nonlawyer is a corporate director or officer thereof or occupies the position of similar responsibility in any form of association other than a corporation; or (3) a nonlawyer has the right to direct or control the professional judgment of a lawyer. RULE 5.5: UNAUTHORIZED PRACTICE OF LAW (a) A lawyer shall not: (1) practice law in a jurisdiction where doing so violates the regulation of the legal profession in that jurisdiction; or (2) assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law. (b) A lawyer admitted in another jurisdiction, and not disbarred or suspended from practice in any jurisdiction, may provide legal services in this state to the lawyer’s employer or its organizational affiliates provided that those legal services are not services for which Montana requires pro hac vice admission and, when provided by a foreign lawyer and requiring advice on the law of this or another jurisdiction of the United States, such advice shall be based upon the advice of a lawyer who is duly licensed and authorized by the jurisdiction to provide such advice. For purposes of this subsection, the foreign lawyer must be a member in good standing of a recognized legal profession in a foreign jurisdiction, the members of which are admitted 28 to practice as lawyers or counselors at law or the equivalent, and are subject to effective regulation and discipline by a duly constituted professional body or a public authority. RULE 5.6: RESTRICTIONS ON RIGHT TO PRACTICE A lawyer shall not participate in offering or making: (a) a partnership, shareholders, operating, employment, or other similar type of agreement that restricts the right of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement; or (b) an agreement in which a restriction on the lawyer’s right to practice is part of the settlement of a client controversy. PUBLIC SERVICE RULE 6.1: PRO BONO PUBLICO SERVICE Every lawyer has a professional responsibility to provide legal services to those unable to pay. A lawyer should render at least fifty (50) hours of pro bono publico legal services per year. In fulfilling this responsibility, the lawyer should: (a) provide a substantial majority of the fifty (50) hours of legal services without fee or expectation of fee to: (1) persons of limited means; or (2) charitable, religious, civic, community, governmental and educational organizations in matters that are designed primarily to address the needs of persons of limited means; and (b) provide additional services through: (1) delivery of legal services at no fee or substantially reduced fee to individuals, groups or organizations seeking to secure or protect civil rights, civil liberties or public rights, or charitable, religious, civic, community, governmental and educational organizations in matters in furtherance of their organizational purposes, where the payment of standard legal fees would significantly deplete the organization’s economic resources or would be otherwise inappropriate; (2) delivery of legal services at a substantially reduced fee to persons of limited means; or (3) participation in activities for improving the law, the legal system or the legal profession. In addition, a lawyer should voluntarily contribute financial support to organizations that provide legal services to persons of limited means. RULE 6.2: ACCEPTING APPOINTMENTS A lawyer shall not seek to avoid appointment by a tribunal to represent a person except for good cause, such as: (a) representing the client is likely to result in violation of the Rules of Professional Conduct or other law; (b) representing the client is likely to result in an unreasonable financial burden on the 29 lawyer; or (c) the client or the cause is so repugnant to the lawyer as to be likely to impair the client- lawyer relationship or the lawyer’s ability to represent the client. RULE 6.3: MEMBERSHIP IN LEGAL SERVICES ORGANIZATION A lawyer may serve as a director, officer or member of a legal services organization, apart from the law firm in which the lawyer practices, notwithstanding that the organization serves persons having interests adverse to a client of the lawyer. The lawyer shall not knowingly participate in a decision or action of the organization: (a) if participating in the decision would be incompatible with the lawyer’s obligations to a client under Rule 1.7; or (b) where the decision could have a material adverse effect on the representation of a client of the organization whose interests are adverse to a client of the lawyer. RULE 6.4: LAW REFORM ACTIVITIES AFFECTING CLIENT INTERESTS A lawyer may serve as a director, officer or member of an organization involved in reform of the law or its administration notwithstanding that the reform may affect the interests of a client of the lawyer. When the lawyer knows that the interests of a client may be materially benefitted by a decision in which the lawyer participates, the lawyer shall disclose that fact but need not identify the client. RULE 6.5: NONPROFIT AND COURT-ANNEXED LIMITED LEGAL SERVICES PROGRAMS (a) A lawyer who, under the auspices of a program sponsored by a nonprofit organization or court, provides short-term limited legal services to a client without expectation by either the lawyer or the client that the lawyer will provide continuing representation in the matter: (1) is subject to Rules 1.7 and 1.9(a) only if the lawyer knows that the representation of the client involves a conflict of interest; and (2) is subject to Rule 1.10 only if the lawyer knows that another lawyer associated with the lawyer in a law firm is disqualified by Rule 1.7 or 1.9(a) with respect to the matter. (b) Except as provided in paragraph (a)(2), Rule 1.10 is inapplicable to a representation governed by this Rule. INFORMATION ABOUT LEGAL SERVICES RULE 7.1: COMMUNICATIONS CONCERNING A LAWYER’S SERVICES A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false if it contains a material misrepresentation of fact or law. A misleading communication includes, but is not limited to those that: (a) omits a fact as a result of which the statement considered as a whole is materially misleading; 30 (b) is likely to create an unjustified expectation about results the lawyer can achieve; (c) proclaims results obtained on behalf of clients, such as the amount of a damage award or the lawyer’s record in obtaining favorable verdicts or settlements, without stating that past results afford no guarantee of future results and that every case is different and must be judged on its own merits; (d) states or implies that the lawyer can achieve results by means that violate the Rules of Professional Conduct or other law; (e) compares the quality of a lawyer’s or a law firm’s services with other lawyers’ services, unless the comparison can be factually substantiated; (f) advertises for a specific type of case concerning which the lawyer has neither experience nor competence; (g) indicates an area of practice in which the lawyer routinely refers matters to other lawyers, without conspicuous identification of such fact; (h) contains any paid testimonial about, or endorsement of, the lawyer without conspicuous identification of the fact that payments have been made for the testimonial or endorsement; (i) contains any simulated portrayal of a lawyer, client, victim, scene, or event without conspicuous identification of the fact that it is a simulation; (j) provides an office address for an office staffed only part time or by appointment only, without conspicuous identification of such fact; (k) states that legal services are available on a contingent or no-recovery, no-fee basis without stating conspicuously that the client may be responsible for costs or expenses, if that is the case; or (l) advertises for legal services without identifying the jurisdictions in which the lawyer is licensed to practice. RULE 7.2: ADVERTISING (a) Subject to the requirements of Rules 7.1 and 7.3, a lawyer may advertise services through written, recorded or electronic communication, including public media. (b) A lawyer shall not give anything of value to a person for recommending the lawyer’s services except that a lawyer may: (1) pay the reasonable costs of advertisements or communications permitted by this Rule; (2) pay the usual charges of a legal service plan or a not-for-profit lawyer referral service; and (3) pay for a law practice in accordance with Rule 1.19. (c) Any communication made pursuant to this rule shall include the name and office address of at least one lawyer or law firm responsible for its content. RULE 7.3: DIRECT CONTACT WITH PROSPECTIVE CLIENTS (a) A lawyer shall not by in-person, live telephone or real-time electronic contact solicit professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain, unless the person contacted: 31 (1) is a lawyer; or (2) has a family, close personal, or prior professional relationship with the lawyer. (b) A lawyer shall not solicit professional employment from a prospective client by written, recorded or electronic communication or by in-person, telephone or real-time electronic contact even when not otherwise prohibited by paragraph (a), if: (1) the prospective client has made known to the lawyer a desire not to be solicited by the lawyer; (2) the solicitation involves coercion, duress or harassment; (3) the lawyer knows or reasonably should know that the physical, emotional or mental state of the person is such that the person cannot exercise reasonable judgment in employing a lawyer; or (4) the lawyer reasonably should know that the person is already represented by another lawyer. (c) Every written, recorded or electronic communication from a lawyer soliciting professional employment from a prospective client known to be in need of legal services in a particular matter shall include the words “Advertising Material” on the outside envelope, if any, and at the beginning and ending of any recorded or electronic communication, unless the recipient of the communication is a person specified in paragraphs (a)(1) or (a) (2). (d) Notwithstanding the prohibitions in paragraph (a), a lawyer may participate with a prepaid or group legal service plan operated by an organization not owned or directed by the lawyer that uses in-person or telephone contact to solicit memberships or subscriptions for the plan from persons who are not known to need legal services in a particular matter covered by the plan. Lawyers who participate in a legal services plan must reasonably assure that the plan sponsors are in compliance with Rules 7.1, 7.2 and 7.3(b). See Rule 8.4(a). RULE 7.4: COMMUNICATION OF FIELDS OF PRACTICE AND SPECIALIZATION (a) A lawyer may communicate the fact that the lawyer does or does not practice in particular fields of law. A lawyer may also communicate that his/her practice is limited to or concentrated in a particular field of law, if such communication does not imply an unwarranted expertise in the field so as to be false or misleading under Rule 7.1. (b) A lawyer admitted to engage in patent practice before the United States Patent and Trademark Office may use the designation “Patent Attorney” or a substantially similar designation. (c) A lawyer engaged in Admiralty practice may use the designation “Admiralty,” “Proctor in Admiralty” or a substantially similar designation. (d) A lawyer shall not state or imply that a lawyer is certified as a specialist in a particular field of law, unless: (1) the lawyer has been certified as a specialist by an organization that has been approved by an appropriate state authority or that has been accredited by the American Bar Association; and 32 (2) the name of the certifying organization is clearly identified in the communication. RULE 7.5: FIRM NAMES AND LETTERHEADS (a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in private practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not otherwise in violation of Rule 7.1. (b) A law firm with offices in more than one jurisdiction may use the same name or other professional (e.g., website) designation in each jurisdiction, but identification of the lawyers in an office of the firm shall indicate the jurisdictional limitations on those not licensed to practice in the jurisdiction where the office is located. (c) The name of a lawyer holding a public office shall not be used in the name of a law firm, or in communications on its behalf, during any substantial period in which the lawyer is not actively and regularly practicing with the firm. (d) Lawyers may state or imply that they practice in a partnership or other organization only when that is the fact. MAINTAINING THE INTEGRITY OF THE PROFESSION RULE 8.1: BAR ADMISSION AND DISCIPLINARY MATTERS An applicant for admission to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not: (a) knowingly make a false statement of material fact; or (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by Rule 1.6. RULE 8.2: JUDICIAL AND LEGAL OFFICIALS (a) A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer, or of a candidate for election or appointment to judicial or legal office. (b) A lawyer who is a candidate for judicial office shall comply with the applicable provisions of the code of judicial conduct. RULE 8.3: REPORTING PROFESSIONAL MISCONDUCT (a) A lawyer who knows that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority. (b) A lawyer who knows that a judge has committed a violation of applicable code of 33 judicial conduct that raises a substantial question as to the judge’s fitness for office shall inform the appropriate authority. (c) This Rule does not require disclosure of information otherwise protected by Rule 1.6 or information gained by a lawyer or judge while participating in an approved lawyers assistance program. RULE 8.4: MISCONDUCT It is professional misconduct for a lawyer to: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation; (d) engage in conduct that is prejudicial to the administration of justice; (e) state or imply an ability to influence improperly a government agency or official or to achieve results by means that violate the Rules of Professional Conduct or other law; or (f) knowingly assist a judge or judicial officer in conduct that is a violation of applicable code of judicial conduct or other law. RULE 8.5: JURISDICTION AND CERTIFICATION A lawyer who is not an active member in good standing of the State Bar of Montana and who seeks to practice in any state or federal court located in this State pro hac vice, by motion, or before being otherwise admitted to the practice of law in this State, shall, prior to engaging in the practice of law in this State, certify in writing and under oath to this Court that, except as to Rules 6.1 through 6.4, he or she will be bound by these Rules of Professional Conduct in his or her practice of law in this State and will be subject to the disciplinary authority of this State. A copy of said certification shall be mailed, contemporaneously, to the business offices of the State Bar of Montana in Helena, Montana. A lawyer not admitted to practice in this State is subject to the disciplinary authority of this State for conduct that constitutes a violation of these Rules and that: (1) involves the practice of law in this State by that lawyer; (2) involves that lawyer holding himself or herself out as practicing law in this State; (3) advertises, solicits, or offers legal services in this State; or (4) involves the practice of law in this State by another lawyer over whom that lawyer has the obligation of supervision or control. A lawyer shall not be subject to discipline if the lawyer’s conduct conforms to the rules of a jurisdiction in which the lawyer reasonably believes the predominant effect of the lawyer’s conduct will occur.

September 22, 2016

a5efb8de-d2ae-4575-a07f-3c905c6d096c

State v. Davis

2016 MT 206

DA 15-0569

Montana

Montana Supreme Court

DA 15-0569 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 206 STATE OF MONTANA, Plaintiff and Appellee, v. SHAWNA MICHELLE DAVIS, Defendant and Appellant. APPEAL FROM: District Court of the Eleventh Judicial District, In and For the County of Flathead, Cause No. DC-12-357D Honorable David M. Ortley, Presiding Judge COUNSEL OF RECORD: For Appellant: Chad Wright, Chief Appellate Defender, Moses Okeyo, Assistant Appellate Defender, Helena, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Edward J. Corrigan, Flathead County Attorney, Caitlin Overland, Deputy County Attorney, Kalispell, Montana Submitted on Briefs: June 8, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 15-0569 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Shawna Davis appeals from the District Court’s Opinion and Order affirming the Justice Court’s denial of Davis’s motion for judgment of acquittal. We affirm. ¶2 The issue on appeal is whether the District Court properly affirmed the Justice Court’s decision denying Davis’s motion to dismiss the criminal charge. FACTUAL AND PROCEDURAL BACKGROUND ¶3 On May 12, 2012, Montana Highway Patrol Trooper Fetterhoff stopped Davis’s vehicle on a public highway in Flathead County because she was speeding. Fetterhoff asked Davis for proof of insurance. Davis failed to provide any proof of insurance and stated “I don’t have insurance.” Trooper Fetterhoff gave Davis a citation for violating § 61-6-301(4), MCA, which prohibits operating a motor vehicle without liability insurance. Davis failed to appear at the Justice Court omnibus hearing and then failed to appear at the Justice Court bench trial on September 4, 2012. ¶4 At trial the State presented the testimony of Trooper Fetterhoff who described the traffic stop, Davis’s failure to provide proof of insurance, and her statement that she had no insurance. After the State presented its case, Davis’s attorney moved to dismiss the charge for insufficient evidence.1 The Justice Court declined to do so and found Davis guilty of the charge. On September 20, 2012, Davis appealed the Justice Court 1 Defense motions for a directed verdict or for acquittal are “more appropriately entitled motions to dismiss for insufficient evidence.” State v. Farmer, 2008 MT 354, ¶ 6, 346 Mont. 335, 195 P.3d 800. 3 conviction to District Court. After briefing the District Court issued the Opinion and Order affirming the conviction.2 STANDARD OF REVIEW ¶5 When a justice court decision is appealed, the district court functions as an intermediate appellate court and its review is confined to the record and issues of law. Sections 3-5-303 and 3-10-115, MCA; State v. Luke, 2014 MT 22, ¶ 9, 373 Mont. 398, 321 P.3d 70. On appeal of the district court’s decision, this Court reviews the record independently, applying the clearly erroneous standard to the justice court’s factual findings and reviewing discretionary rulings for abuse of discretion. Luke, ¶ 9. ¶6 This Court reviews a lower court’s ruling on a motion to dismiss in a criminal case de novo, to determine whether the court’s conclusions of law are correct. State v. Kirn, 2012 MT 69, ¶ 8, 364 Mont. 356, 274 P.3d 746.3 DISCUSSION ¶7 Issue: Whether the District Court properly affirmed the Justice Court’s decision denying Davis’s motion to dismiss the criminal charge for insufficient evidence. ¶8 The State charged Davis with a violation of § 61-6-301(4), MCA, which makes it unlawful for a person to operate a motor vehicle “upon the ways of this state open to the public . . . without a valid policy of liability insurance . . . .” Davis argues that the Justice 2 Briefing on Davis’s appeal to the District Court was completed on January 14, 2013. Nothing else transpired in the appeal until the District Court’s Opinion and Order issued July 28, 2015, some two and a half years later. 3 We reject the State’s contention that Davis failed to preserve the issue for review by failing to specifically object to Trooper Fetterhoff’s testimony. Davis preserved the issue on appeal by moving to dismiss for insufficient evidence. State v. McCarvey, 2005 MT 308, ¶ 15, 329 Mont. 439, 124 P.3d 1131. 4 Court should have dismissed the charge because the State’s only evidence was her statement to Trooper Fetterhoff that “I don’t have insurance.” Davis contends that her statement was a confession that could not be used to convict her because it was not corroborated by any other evidence. Montana law requires that a defendant’s extrajudicial confession may not be admitted unless the prosecution introduces “independent evidence tending to establish the commission of the crime charged.” Section 46-16-215, MCA. ¶9 The District Court determined that Davis’s statement to Trooper Fetterhoff was not a confession, but was an admission that could be considered without corroborating evidence. The District Court relied upon the established distinction that a confession is a statement by the defendant that he committed the crime, while an admission is a statement by the defendant of some specific fact or facts that could tend to establish guilt or some element of the offense. We agree with the District Court. Montana Rule of Evidence 801(a) defines “statement” as any oral or written assertion. Statements made by a party-opponent and offered against that party are not hearsay and can be allowed into evidence as admissions. M. R. Evid. 801(2); State v. Smith, 276 Mont. 434, 441, 916 P.2d 773, 777 (1996). ¶10 The distinction between a confession and an admission is consistent with established Montana law. State v. Hallam, 175 Mont. 492, 503, 575 P.2d 55, 62 (1978) (a confession is an admission of the crime itself while an admission concerns only some specific fact that tends to establish guilt); State v. Dupre, 200 Mont. 165, 172, 650 P.2d 1381, 1384-85 (1982) (a confession is an acknowledgement of guilt after an offense, and 5 does not include a mere statement of an independent fact from which guilt may be inferred); State v. Thompson, 263 Mont. 17, 25, 865 P.2d 1125, 1130 (1993) (admission is an avowal of a fact or circumstance from which guilt may be inferred); State v. Goltz, 197 Mont. 361, 369, 642 P.2d 1079, 1084 (1982) (an admission may include a false exculpatory statement). ¶11 The assertion by Davis that she did not have insurance was an admission and not a confession. The statement pertained to an element of the offense (not having valid insurance) but it did not encompass the entire offense. As the District Court found, the other elements of the offense were operating a motor vehicle, and doing so upon a way of the state open to the public. Section 61-6-301(4), MCA. Since the statement was not a confession the requirements of corroboration applicable to a confession did not apply. ¶12 In this case the Justice Court heard Trooper Fetterhoff’s testimony that Davis said “I don’t have insurance.” In addition the evidence showed that Davis did not produce evidence of insurance when asked to do so, and that she was operating a motor vehicle upon a way open to the public. These pieces of evidence, taken together, were sufficient to establish that Davis violated § 61-6-301(4), MCA. Davis’s failure to produce evidence of insurance when asked is circumstantial evidence of guilt, which may be relied upon to prove a violation of the statute. State v. Chaussee, 2011 MT 203, ¶ 16, 361 Mont. 433, 259 P.3d 783. CONCLUSION ¶13 There was sufficient evidence to convict Davis of the charged offense and we affirm the District Court. 6 /S/ MIKE McGRATH We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ PATRICIA COTTER /S/ JIM RICE

August 23, 2016

aa0170f7-c77e-4944-a219-9d3da3afe5e1

State v. Butterfly

2016 MT 195

DA 15-0391

Montana

Montana Supreme Court

DA 15-0391 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 195 STATE OF MONTANA, Plaintiff and Appellee, v. RODERICK LEE BUTTERFLY, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 14-0711 Honorable Michael G. Moses, Presiding Judge COUNSEL OF RECORD: For Appellant: Jacquelyn M. Hughes, Hughes Law, P.L.L.C., Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Mardell Ployhar, Assistant Attorney General, Helena, Montana Scott Twito, Yellowstone County Attorney, Mary Leffers Barry, Deputy County Attorney, Billings, Montana Submitted on Briefs: July 20, 2016 Decided: August 16, 2016 Filed: __________________________________________ Clerk 08/16/2016 Case Number: DA 15-0391 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 The Third Judicial District Court dismissed Powell County escape charges against Roderick Lee Butterfly when the parties agreed to venue in Yellowstone County. After almost seven months, the State re-filed the charges in Yellowstone County. The principal dispute in this appeal is whether that time should count in analyzing Butterfly’s speedy trial claim. The District Court ruled that the speedy trial clock did not start running at all until the Yellowstone County charges were filed. Although we count the time somewhat differently, we agree that Butterfly was not denied a speedy trial. We affirm the denial of his motion to dismiss. PROCEDURAL AND FACTUAL BACKGROUND ¶2 On October 10, 2013, Butterfly failed to return to the Billings Pre-Release Center as scheduled. He was charged with escape in violation of § 45-7-306, MCA, the following day in Powell County. Butterfly was arrested in Glacier County and was transferred to Montana State Prison (MSP). Butterfly objected to the Powell County venue, asserting that he should have been charged in Yellowstone County where the alleged offense took place. The State stipulated that venue was proper in Yellowstone County. ¶3 The State then moved to dismiss the escape charge without prejudice based on the parties’ stipulation of proper venue. The Powell County District Court granted the State’s motion and dismissed the case without prejudice on February 11, 2014. Nearly seven months later, on September 8, 2014, the State filed the escape charges in 3 Yellowstone County. Butterfly was transferred from MSP to the Yellowstone County Detention Facility for prosecution. Trial was set for February 9, 2015. ¶4 Before trial, Butterfly filed a motion to dismiss the case for lack of speedy trial, arguing that 445 days would have passed by the time he appeared for trial. Butterfly asserted that his right to speedy trial had attached upon his initial appearance on the Powell County charge and continued throughout the charge’s dismissal and its pending re-filing in Yellowstone County. Butterfly attributed the excessive delay to the State and claimed that he had suffered prejudice because of it. ¶5 Following an evidentiary hearing, the District Court denied Butterfly’s motion to dismiss. It concluded that Butterfly’s right to a speedy trial had not attached until the charges were re-filed in Yellowstone County—155 days before trial. The court also analyzed the alleged speedy trial violation under the factors articulated in State v. Ariegwe, 2007 MT 204, ¶¶ 106-112, 338 Mont. 442, 167 P.3d 815, and concluded that there was “insufficient prejudice” to Butterfly to constitute a speedy trial violation. Butterfly later pleaded guilty to the escape charge, reserving the right to appeal the speedy trial issue. STANDARD OF REVIEW ¶6 A speedy trial violation presents a question of constitutional law that we review de novo to determine whether the court correctly interpreted and applied the law. State v. Zimmerman, 2014 MT 173, ¶ 11, 375 Mont. 374, 328 P.3d 1132 (citing Ariegwe, ¶ 119). We review the court’s underlying factual findings for clear error. Zimmerman, ¶ 11. 4 DISCUSSION ¶7 Did the District Court err in denying Butterfly’s motion to dismiss for lack of a speedy trial? ¶8 The Sixth and Fourteenth Amendments to the United States Constitution and Article II, Section 24, of the Montana Constitution guarantee every accused person the right to a speedy trial. Zimmerman, ¶ 12. When an accused claims that right has been violated, we consider (1) the length of the delay, (2) the reasons for the delay, (3) the accused’s responses to the delay, and (4) prejudice to the accused as a result of the delay. Zimmerman, ¶ 12. We balance these factors “with any other relevant circumstances to determine whether the right to a speedy trial has been violated.” State v. Stops, 2013 MT 131, ¶ 19, 370 Mont. 226, 301 P.3d 811. “[E]ach factor’s significance will vary from case to case,” and “a given factor may outweigh all of the others in one case but be of little consequence in another.” Ariegwe, ¶ 105. (1) Length of the Delay ¶9 We determine initially whether the length of the delay is at least 200 days, “which is the trigger date for conducting the four-factor balancing test.” Zimmerman, ¶ 13. In the present case, the District Court found that Butterfly “first became an accused on September 8, 2014, the date [he] was charged with Escape in Yellowstone County.” The interval between the Yellowstone County filing and trial was 155 days. The court concluded, “Because the interval between the accusation and the trial is less than 200 days it does not trigger any analysis under the four [Ariegwe] factors or the balancing of those factors.” 5 ¶10 Butterfly argues that the District Court erred in determining that his speedy trial right did not attach until he was charged in Yellowstone County. Butterfly contends that “the length of delay runs from the time of accusation” and “as soon as an individual is subjected to proceedings for an offense.” Butterfly claims that this Court “has not specifically addressed when the speedy trial clock starts running if a charge is filed, dismissed and subsequently re-filed.” He relies on State v. Daniels, 248 Mont. 343, 811 P.2d 1286 (1991), in which we concluded that a defendant’s right to a speedy trial attached upon a petition charging the defendant for burglary in youth court despite the charge being later transferred to district court. Daniels, 248 Mont. at 349, 811 P.2d at 1289. Butterfly argues that, “like Daniels, [he] was subject to criminal proceedings regarding exactly the same charge for exactly the same conduct a full year before the [information] was filed in Yellowstone County.” ¶11 The State agrees that the District Court erred in its determination that the speedy trial right attached only when the charges were filed in Yellowstone County. Relying on United States v. MacDonald, 456 U.S. 1, 102 S. Ct. 1497 (1982), however, the State argues that “the speedy trial clock stops running while the charges are dismissed.” The State maintains that the speedy trial clock started running when the charge was filed in Powell County, stopped when the charge was dismissed, and began running again when the charge was re-filed in Yellowstone County. The State contends that Daniels is distinguishable “because Daniels was continuously subject to charges in either the youth court or the district court.” Here, in contrast, “[t]here was not a charge pending against 6 Butterfly from the time the charge was dismissed in Powell County until he was charged in Yellowstone County.” ¶12 Butterfly attacks the State’s reliance on MacDonald because it dealt with an arrest on a military investigation and “there is a question whether a military investigation constitutes a formal charging for speedy trial issues.” Butterfly points out the MacDonald Court’s acknowledgment that in United States v. Avalos, 541 F.2d 1100 (5th Cir. 1976), the speedy trial clock did not stop between the time charges were dismissed in one district and subsequently re-filed in another district. He contends that the factual scenario in Avalos is more applicable to his case because he was not in the same position he would have been in a pre-filing investigation. Because of the escape charge “hanging over his head,” Butterfly contends that he “was not free to go about discharging his other sentence.” ¶13 The right to a speedy trial is intended to minimize the possibility of lengthy incarceration prior to trial, to reduce the lesser, but nevertheless substantial impairment of liberty imposed on an accused while released on bail, and to shorten the disruption of life caused by arrest and the presence of unresolved criminal charges. MacDonald, 456 U.S. at 8, 102 S. Ct. at 1502. ¶14 In MacDonald, a military physician was accused of committing murder on a military base. The Army charged MacDonald with the murders, but dropped the charges after several months and MacDonald was honorably discharged. MacDonald, 456 U.S. at 4-5, 102 S. Ct at 1500. Four years later, the government obtained an indictment in federal district court charging MacDonald with murder. MacDonald claimed that the 7 delay violated his Sixth Amendment right to a speedy trial and the Fourth Circuit agreed. The United States Supreme Court reversed. MacDonald, 456 U.S. at 11, 102 S. Ct. at 1503. The Court concluded that the speedy trial guarantee did not attach to the time period after dismissal of the military charges and before the civil indictment. MacDonald, 456 U.S. at 7-8, 102 S. Ct. at 1501-02. The Court reasoned that during that time there was no pretrial incarceration, no impairment of liberty associated with being released on bail, and no “disruption of life caused by arrest and the presence of unresolved criminal charges.” MacDonald, 456 U.S. at 8, 102 S. Ct. at 1502. The Court stated, “Following dismissal of charges, any restraint on liberty, disruption of employment, strain on financial resources, and exposure to public obloquy, stress and anxiety is no greater than it is upon anyone openly subject to a criminal investigation.” MacDonald, 456 U.S. at 9, 102 S. Ct. at 1502. ¶15 As Butterfly points out, the MacDonald Court noted that the Fifth Circuit had “reached a seemingly contrary result” in Avalos by counting the time between indictments. MacDonald, 456 U.S. at 7 n.7, 102 S. Ct. at 1501 n.7. The Supreme Court noted the “unusual” circumstances in that case, in which “the Government dismissed charges pending in one district in order to prosecute the defendants on those same charges in another district.” MacDonald, 456 U.S. at 7 n.7, 102 S. Ct. at 1501 n.7. The Avalos court concluded that the defendants became “accused persons” when the government issued the original warrants for their arrest. Avalos, 541 F.2d at 1108. The Fifth Circuit stated, “That [one defendant] was never incarcerated and [the other defendant] was imprisoned for a relatively short period does not expunge the public 8 accusation.” Avalos, 541 F.2d at 1108. The court concluded that because the defendants’ initial arrest “form[ed] the basis of the conviction under review,” the right to a speedy trial attached on the date of the initial arrests. Avalos, 541 F.2d at 1109. ¶16 Although not cited by either party, this Court has addressed when the speedy trial clock starts running if a charge is filed, dismissed, and subsequently re-filed. Within nine months of the MacDonald decision, this Court decided State v. Bailey, 201 Mont. 473, 655 P.2d 494 (1982). Bailey was arrested and charged with the felony offense of attempted sale of dangerous drugs. The trial court dismissed the charges because the State had not filed the information within thirty days of the defendant’s waiver of a preliminary hearing. Bailey, 201 Mont. at 475, 655 P.2d at 495. See § 46-11-203, MCA. After two unsuccessful attempts, the State later filed a new information charging Bailey with the same offense. Bailey, 201 Mont. at 475, 655 P.2d at 496. We held that the time between dismissal of the first information and filing of the second should be counted in the speedy trial calculation. Bailey, 201 Mont. at 477-78, 655 P.2d at 497. “Being an accused is all that is required for the right to speedy trial to attach.” Bailey, 201 Mont. at 477, 655 P.2d at 497 (citing State v. Larson, 191 Mont. 257, 261, 623 P.2d 954, 957 (1981)). We distinguished MacDonald. Unlike MacDonald, we reasoned, “Despite no formal charges pending, it is clear from the record [Bailey] is an accused, because . . . he is in a similar position to an arrested person due to the State’s continued efforts to charge him during the interim between the first and second information.” Bailey, 201 Mont. at 478, 655 P.2d at 497. 9 ¶17 The Ninth Circuit arrived at a very similar conclusion in United States v. Loud Hawk, 741 F.2d 1184 (9th Cir. 1984) (hereafter Loud Hawk I), rev’d by United States v. Loud Hawk, 474 U.S. 302, 106 S. Ct. 648 (1986) (hereafter Loud Hawk II). The Loud Hawk trial court dismissed all charges against the defendants on speedy trial grounds because of a seven-and-one-half year delay in bringing them to trial after the government’s interlocutory appeals of orders dismissing the charges. Loud Hawk I, 741 F.2d at 1187-88. The Ninth Circuit affirmed. Loud Hawk I, 741 F.2d at 1194. The court concluded that MacDonald was distinguishable. It counted the time period between indictments in the speedy trial analysis because “the government’s appeals after dismissal of the indictment bore the indicia and imposed the disabilities of continued, formal public accusation . . . [so that] the defendants remained ‘accused’ during the periods when the government was appealing the dismissals of their indictment.” Loud Hawk I, 741 F.2d at 1190. ¶18 On certiorari, the Supreme Court reversed. The Court concluded that the speedy trial clause was inapplicable to the time during which the indictment was dismissed and the defendants were not subject to “actual restraints” on their liberty. Loud Hawk II, 474 U.S. at 312, 106 S. Ct. at 654. With no charges outstanding, personal liberty is certainly not impaired to the same degree as it is after arrest while charges are pending. After the charges against him have been dismissed, a citizen suffers no restraints on his liberty and is no longer the subject of public accusation: his situation does not compare with that of a defendant who has been arrested and held to answer. 10 Loud Hawk II, 474 U.S. at 311, 106 S. Ct. at 654 (citing MacDonald, 456 U.S. at 9, 102 S. Ct. at 1502) (internal quotation marks omitted). The Court went on to address the defendants’ argument that the speedy trial guarantee should apply to the interim period “because the Government’s desire to prosecute them was a matter of public record.” The Court stated, “Public suspicion . . . is not sufficient to justify the delay in favor of a defendant’s speedy trial claim. We find that after the District Court dismissed the indictment against respondents and after respondents were freed without restraint, they were ‘in the same position as any other subject of a criminal investigation.’” Loud Hawk II, 474 U.S. at 311, 106 S. Ct. at 654 (quoting MacDonald, 456 U.S. at 8-9, 102 S. Ct. at 1502). ¶19 Loud Hawk II compels us to revisit our decision in Bailey. Our analysis distinguishing MacDonald in Bailey is, for all intents and purposes, identical to the Ninth Circuit’s analysis distinguishing MacDonald in Loud Hawk I. We said that a person who is subject to “public accusation” absent charge or actual restraint is afforded speedy trial protection. Bailey, 201 Mont. at 477-78, 655 P.2d at 496-97. Loud Hawk II expressly rejected the Ninth Circuit’s identical conclusion in Loud Hawk I. Loud Hawk II, 474 U.S. at 312, 317, 106 S. Ct. at 654, 657. ¶20 MacDonald held that “[o]nce charges are dismissed,” as the State did here, “the speedy trial guarantee is no longer applicable.” MacDonald, 456 U.S. at 8, 102 S. Ct. at 1502. Loud Hawk II reaffirmed that, “when no indictment is outstanding, only the ‘actual restraints imposed by arrest and holding to answer a criminal charge . . . engage the particular provisions of the speedy trial provision of the Sixth Amendment.’” Loud 11 Hawk II, 474 U.S. at 310-11, 106 S. Ct. at 653-54 (quoting United States v. Marion, 404 U.S. 307, 320, 92 S. Ct. 455, 463 (1971), and citing MacDonald, 456 U.S. at 9, 102 S. Ct. at 1502) (emphasis in original). ¶21 In reversing the Ninth Circuit, Loud Hawk II held that a public accusation absent formal charges or actual restraint does not engage protection of the speedy trial clause. Loud Hawk II, 474 U.S. at 310-11, 106 S. Ct. at 654. “The holding in Loud Hawk [II] is based on drawing a distinguishing line between a citizen against whom charges have been dismissed and one ‘who has been arrested and held to answer.’” United States v. Hayden, 860 F.2d 1483, 1486 (9th Cir. 1988) (quoting Loud Hawk II, 474 U.S. at 311, 106 S. Ct. at 654). Butterfly’s assertion that he remained “an accused” after dismissal of the initial charges is directly contrary to Loud Hawk II. After dismissal, Butterfly was “in the same position as any other subject of a criminal investigation.” MacDonald, 456 U.S. at 8-9, 102 S. Ct. at 1502. That it was well-known that the State would eventually re-file charges against Butterfly “is not legally significant” as applied to the speedy trial clause. Hayden, 860 F.2d at 1486 n.3 (citing Loud Hawk II, 474 U.S. at 311, 106 S. Ct at 654). True, Butterfly was incarcerated in MSP during the time between the dismissal and re-filing. But his incarceration was the result of a prior and wholly separate conviction— not of the escape charge. And, while Butterfly contends that he was adversely affected by the “Escape charge hanging over his head,” [t]he Speedy Trial Clause does not purport to protect a defendant from all effects flowing from a delay before trial. The Clause does not, for example, limit the length of a pre-indictment criminal investigation even though the “the [suspect’s] knowledge of an ongoing criminal investigation will cause stress, discomfort, and perhaps a certain disruption in normal life.” 12 Loud Hawk II, 474 U.S. at 311-12, 106 S. Ct. at 654 (quoting MacDonald, 456 U.S. at 9, 102 S. Ct. at 1502). ¶22 The Supreme Court’s unequivocal holding in Loud Hawk II compels us to conclude that Bailey has been abrogated. Bailey’s holding that a speedy trial right attaches during the time period between dismissal and re-filing of subsequent charges when the accused is under no official restraint is overruled. Delay while no charges are pending generally is to be measured by due process standards, similar to pre-indictment delay. MacDonald, 456 U.S. at 8, 102 S. Ct. at 1502.1 ¶23 We hold that the time period from the dismissal of the charge initially filed against Butterfly in Powell County to the filing of the charge in Yellowstone County is not counted for purposes of determining the length of the delay. We acknowledge that the MacDonald Court distinguished Avalos because of the “unusual” circumstances in that case. We agree with the First Circuit, however, that “[t]hat distinction . . . flies in the face of the opinion itself: MacDonald holds that the speedy trial right simply does not attach to one not formally accused.” United States v. Colombo, 852 F.2d 19, 24 (1st Cir. 1988). “MacDonald was as certain of his continuing and public prosecution as is an individual, such as [Butterfly], who believe[d] he [would] be indicted in a different district.” Colombo, 852 F.2d at 24 (internal citations omitted). 1 Although the Supreme Court acknowledged that “delays in bringing the case to trial caused by the Government’s interlocutory appeal [brought in bad faith or for dilatory purpose] may be weighed in determining whether a defendant has suffered a violation of his rights to a speedy trial,” Loud Hawk II, 474 U.S. at 316, 106 S. Ct. at 656, that is not an issue we face here. 13 ¶24 Of note, we have held that the re-filing of charges between justice court and district court restarts the speedy trial clock. In State v. Topp, 2003 MT 209, 317 Mont. 59, 75 P.3d 330, Topp was charged with two misdemeanor offenses in justice court. Those charges were dismissed because the State intended to file charges in district court. Topp, ¶ 3. A week later, the State charged Topp with a felony, along with the two previously-dismissed misdemeanor charges, in district court. On appeal, Topp argued that the district court erred in denying his motion to dismiss the misdemeanor charges because his speedy trial right had been violated. Topp, ¶ 10. We concluded that Topp’s argument was “totally without merit” because “[n]o charges were pending” against him after the justice court charges were dismissed and before the charges were re-filed in district court, and “consequently, no speedy trial ‘clock’ was running.” Topp, ¶ 10. We applied the same principles in State v. Case, 2013 MT 192, 371 Mont. 58, 305 P.3d 812. In Case, the facts presented “the other side of the Topp coin—the charges against Case were dismissed by the District Court and re-filed in Justice Court.” Case, ¶ 13. “When the District Court dismissed Case’s felony [partner or family member assault] charge, there were no charges pending against Case and thus, no speedy trial clock was running.” Case, ¶ 13. ¶25 Notwithstanding our decisions in Topp and Case, the State concedes that the speedy trial clock began running when charges first were filed in Powell County. Consistent with MacDonald, we agree. MacDonald, 456 U.S. at 7, 102 S. Ct. at 1501. The clock ran until the Powell County charge was dismissed, and started again when the State filed charges in Yellowstone County. The total length of the delay was 277 days— 14 123 days for the time between the first charge and dismissal, plus 154 days for the time between the second charge and trial. The District Court therefore erred in calculating the length of the delay.2 ¶26 A delay of 277 days is sufficient to trigger further analysis under the four Ariegwe factors. Zimmerman, ¶ 13. “[T]he further the delay stretches beyond the trigger date, the stronger the presumption is under Factor Four that the accused has been prejudiced by the delay, and the heavier the State’s burden is under Factor Two to provide valid justifications for the delay.” Zimmerman, ¶ 14 (citing Ariegwe, ¶¶ 49, 61). Based on our case law, we conclude that a 77-day delay beyond the 200-day trigger date does not impose on the State a heavy burden to justify the delay. See Zimmerman, ¶ 14 (concluding that an 89-day delay beyond the trigger date is “not particularly long and, therefore . . . the State’s burdens under Factors Two and Four are relatively low”); State v. Charlie, 2010 MT 195, ¶ 50, 357 Mont. 355, 239 P.3d 934 (holding that a 70-day delay beyond the trigger date was not long enough to require the State to “show a particularly compelling justification for the delay”). (2) Reasons for the Delay ¶27 Under Factor Two, a court is required to “identify each period of delay in bringing the accused to trial, attribute each period of delay to either the State or the defendant, and then assign appropriate weight to each period of delay based on specific cause and culpability.” Charlie, ¶ 51 (citations and internal quotation marks omitted). Institutional 2 We do not address the significance, if any, of the distinction between Topp and Case, which involved dismissal and re-filing of charges between justice court and district court, and the speedy trial analysis here. 15 delay, “caused by circumstances largely beyond the control of the prosecutor and the accused, such as overcrowded court dockets[,] is attributable to the State, but weighs less heavily against it than delay caused by bad faith, negligence or lack of diligence.” State v. Couture, 2010 MT 201, ¶ 72, 357 Mont. 398, 240 P.3d 987 (citing Ariegwe, ¶ 68; State v. Billman, 2008 MT 326, ¶ 20, 346 Mont. 118, 194 P.3d 58). Because Butterfly’s speedy trial right did not attach during the interval between dismissal and re-filing of the charges, we do not identify it as a “period of delay” and will not consider under this factor the State’s alleged lack of diligence in re-filing the charges. ¶28 Despite finding less than 200 days of delay, the District Court considered the remaining factors “for purposes of argument.” The District Court concluded that the delay between Butterfly’s arrest and his assertion of improper venue was institutional delay. The court attributed to Butterfly the delay between the filing of Butterfly’s motion and the court’s decision to dismiss the case, “as it was triggered by his motion to change venue.” The court concluded that the final delay—the time between the charge in Yellowstone County and the day of trial—was institutional delay. The court specifically found that none of those delays were bad faith delays by the State, but were “due to either a lack of diligence by Powell County or simple institutional delay as a result of overcrowded court dockets.” ¶29 Butterfly argues that the court erred in attributing part of the pre-dismissal delay to him on the basis that he objected to venue. Butterfly contends, “That the State filed the charges in the wrong venue should not be attributed to Butterfly in any circumstance.” 16 Although he stipulated to Yellowstone County as the proper venue, Butterfly emphasizes that it was the State that filed the motion to dismiss. ¶30 Taking the position that “[a]ll of the delay in this case was institutional,” the State argues that “some weight should be given to Butterfly because his objection to venue caused a significant amount of delay.” According to the State, had Butterfly not objected to venue in Powell County, he likely “could have been brought to trial much sooner.” ¶31 If an offender serving a state prison sentence or commitment to the Department of Corrections is charged with escape, the law expressly allows the State to file the charge in any county in the state, “without objection from the person charged.” Section 46-3-110(2), MCA. Because Butterfly had been committed to the Department at the time he walked away from the Billings Pre-Release Center, the State properly charged the case in Powell County. Butterfly, in turn, was within his right under the statute to object to the Powell County venue. Given that both parties followed a procedure expressly contemplated by § 46-3-110(2), MCA, we conclude that the objection to venue and re-filing of escape charges do not by themselves weigh against either party, but are “inherent in the criminal justice system.” Zimmerman, ¶ 19. The delay in this case was institutional. As such, it is attributable to the State, “but weighs less heavily against it than delay caused by bad faith, negligence or lack of diligence.” Couture, ¶ 72. (3) The Accused’s Responses to the Delay ¶32 Under Factor Three, we evaluate the accused’s response to the delay, such as his or her acquiescence in or objection to pretrial delay. Couture, ¶ 50. “[T]he issue is not simply the number of times the accused acquiesced or objected[;] [r]ather the focus is on 17 the surrounding circumstances.” Zimmerman, ¶ 22. We consider the “totality of the accused’s responses” to ascertain whether the accused “actually wanted” a speedy trial. Zimmerman, ¶ 22. ¶33 The District Court concluded that Butterfly had not waived his constitutional right to a speedy trial at any time during the proceedings. It noted that his objection to venue was “his right” and “in accordance with the Montana statute.” The court concluded further that Butterfly had asserted his speedy trial right by filing his motion to dismiss on December 18, 2014. The record supports the District Court’s conclusion, and we agree. (4) Prejudice to the Accused ¶34 Under Factor Four, we consider whether the delay prejudiced the accused “in light of the interests that the speedy trial right was designed to protect: (i) preventing oppressive pretrial incarceration, (ii) minimizing anxiety and concern caused by unresolved criminal charges, and (iii) limiting the possibility that the accused’s ability to present an effective defense will be impaired.” Zimmerman, ¶ 28. Whether pretrial incarceration is oppressive depends on the “particular circumstances,” including the duration and conditions of the incarceration. Couture, ¶ 56. In assessing an accused’s anxiety and concern, this Court focuses on “the ways in which the presence of unresolved charges disrupted the accused’s life,” keeping in mind that “[a] certain amount of anxiety and concern is inherent in being accused of a crime.” Couture, ¶ 64. The third interest evaluates issues of evidence, witness reliability, and the accused’s ability to present an effective defense. Ariegwe, ¶ 98. “[I]n the absence of affirmative proof that the delay 18 has impaired the accused’s ability to present an effective defense, impairment must be assessed based on other factors in the analysis.” Ariegwe, ¶ 100. ¶35 The District Court concluded that Butterfly’s pretrial incarceration was not oppressive. The court explained that when Butterfly walked away from the pre-release center, he violated the rules and conditions of his placement there. According to the court, Butterfly’s transfer to MSP following his arrest was “a result of the administrative findings that he had violated the rules and conditions of his transfer to the Pre-Release Center.” The court observed that, during the pretrial delay, Butterfly “was not in a position to have employment outside of the prison setting [and] was only able to provide child support with his earnings within [MSP].” It reasoned, however, that Butterfly was in MSP as a result of felonies for which he had been convicted that were unrelated to the escape charge. “For the same reasons,” it concluded, Butterfly’s anxiety and concern were caused “not by the presence of unresolved criminal charges but by the fact that he continues to be incarcerated at [MSP] for underlying felonies.” The court determined also that Butterfly’s ability to present an effective defense was not impaired by the delay because the allegations in the affidavit and motion for leave to file information are “clear and concise”; Butterfly’s “circumstances and status” as of the date of his arrest “are clear”; and whether he returned to the pre-release center as required “is clear.” In balancing the factors, the court found that there was “insufficient prejudice” to Butterfly under the “totality of the circumstances.” It concluded that his constitutional right to a speedy trial was not violated. 19 ¶36 Butterfly maintains that he was prejudiced because he was incarcerated continuously from the time he was arrested to the time he was sentenced. He argues that he was no longer able to work—as he had in pre-release—towards paying “child support, fines, etc.” He also claims that he “was saddled with paying the costs of assigned counsel and other court surcharges, [which] could have been avoided” had the State filed the charge in Yellowstone County in the first place. ¶37 The State argues that because Butterfly’s pretrial incarceration was not caused by the escape charges, “it does not count as prejudice in the speedy trial analysis.” The State argues also that Butterfly “did not demonstrate that he had anxiety and concern about the escape charge” because, even without that charge, he “would have been incarcerated and unable to work outside of the prison.” ¶38 We agree that Butterfly’s pretrial incarceration was not oppressive. The District Court correctly concluded that Butterfly’s commitment to the Department of Corrections was the result of previous felonies unrelated to the escape charge. When Butterfly failed to return to the pre-release center as required, he violated its rules and conditions. Butterfly’s transfer to MSP was the result of violating the pre-release center’s rules and conditions, not because of the charge itself. Moreover, Butterfly acknowledges that the conditions he experienced while incarcerated at MSP and the Yellowstone County Detention Facility were those “inherent in jail and prison life.” While Butterfly may have experienced increased anxiety and concern during the time between dismissal and re-filing of the escape charge, we reiterate that his right to a speedy trial had not attached at that time, and we do not consider it in our speedy trial analysis. Butterfly has not 20 shown that any concern or anxiety he experienced during the time the speedy trial clock was running was anything more than the “certain amount of anxiety and concern inherent in being accused of a crime.” Zimmerman, ¶ 32. Finally, Butterfly does not argue that the delay inhibited his ability to present an effective defense. “The impairment of the accused’s defense from a speedy trial violation constitutes the most important factor in our prejudice analysis.” State v. Steigelman, 2013 MT 153, ¶ 29, 370 Mont. 352, 302 P.3d 396 (citing Doggett v. United States, 505 U.S. 647, 654, 112 S. Ct. 2686, 2692 (1992)). On this record, and considering the lack of evidence of impairment in light of all other factors, Ariegwe, ¶ 100, we conclude that Butterfly was not prejudiced by the delay. ¶39 We hold that the delay in this case does not establish a constitutional speedy trial violation. Our conclusion comes after balancing the four factors in the analysis. Although the institutional delay under Factor One weighs against the State, the extent to which the delay went beyond the trigger date in Factor Two weighs in favor of the State. While our analysis under Factor Three establishes that Butterfly appropriately asserted his speedy trial right, our analysis under Factor Four decisively confirms that Butterfly did not suffer prejudice sufficient to constitute a violation of that right. CONCLUSION ¶40 We differ with the District Court in calculating the length of the delay. We conclude nonetheless that the District Court properly denied Butterfly’s motion to dismiss for violation of his right to a speedy trial. ¶41 Affirmed. 21 /S/ BETH BAKER We Concur: /S/ MIKE McGRATH /S/ MICHAEL E WHEAT /S/ PATRICIA COTTER /S/ JIM RICE

August 16, 2016

e1d32d54-9097-4184-833c-d6186001a536

State v. Krenning

2016 MT 202

DA 15-0799

Montana

Montana Supreme Court

DA 15-0799 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 202 STATE OF MONTANA, Plaintiff and Appellee, v. GERALD JEFFRY KRENNING, Defendant and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause No. DC 15-0754 Honorable Michael G. Moses, Presiding Judge COUNSEL OF RECORD: For Appellant: Brad L. Arndorfer, Arndorfer Law Firm, P.C., Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Robert Stutz, Assistant Attorney General, Helena, Montana Scott D. Twito, Yellowstone County Attorney, Billings, Montana Submitted on Briefs: June 22, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 15-0799 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 A Yellowstone County Justice Court jury convicted Gerald Jeffry Krenning of driving under the influence of alcohol (DUI). Following the Thirteenth Judicial District Court’s rejection of his challenges to the conviction, Krenning appeals. We affirm. ¶2 Krenning raises four issues on appeal: 1. Was Krenning denied his right to a speedy trial? 2. Did the Justice Court deny Krenning a fair trial when it refused to allow him to cross-examine Officer Huertas about the reasons for his administrative leave? 3. Did the Justice Court deny Krenning a fair trial when it allowed Officer Huertas to testify as an expert on horizontal gaze nystagmus (HGN)? 4. Did the Justice Court err in refusing Krenning’s proposed jury instructions on breath test refusal? PROCEDURAL AND FACTUAL BACKGROUND ¶3 Laurel, Montana, police officer Jim Huertas stopped Krenning on suspicion of DUI on the night of December 23, 2014, after Huertas and another officer independently observed Krenning’s vehicle weaving and drifting between lanes on the interstate highway and on Highway 212. Officer Heurtas noticed that Krenning’s eyes were bloodshot and glassy, he smelled of alcohol, and he fumbled when retrieving his driver’s license from his wallet. Officer Huertas administered a roadside HGN test, but Krenning refused a breath test. The State charged Krenning with DUI and with operating a motor vehicle with expired registration. ¶4 Krenning was arraigned on January 8, 2015. Initially, the Yellowstone County Justice Court set a pretrial conference date of April 21, 2015, and trial for May 22, 2015. 3 On the State’s motions, the trial was continued until June 26. Then, at the end of a motions hearing and pretrial conference days before trial, the State moved for a three-week continuance on grounds that Officer Huertas was unavailable to testify because he was on paid administrative leave. The court granted that motion and set trial for July 17. ¶5 A week before trial, the defense moved to dismiss the charges against Krenning on the ground that his right to speedy trial had been denied. The Justice Court denied that motion. ¶6 Krenning pleaded guilty to operating a motor vehicle with expired registration and the DUI charge proceeded to trial. Officers Huertas and Jason Wells testified for the State. Krenning testified on his own behalf. The jury found Krenning guilty of DUI. ¶7 Krenning appealed to District Court, which affirmed his conviction. STANDARDS OF REVIEW ¶8 In an appeal from a justice court established as a court of record—as is the Justice Court in this case—the district court functions as an appellate court and the appeal is confined to a review of the record. See § 3-11-110, MCA. In reviewing a justice court’s findings and conclusions, this Court examines the record independently of the district court’s decision. State v. Marcial, 2013 MT 242, ¶ 10, 371 Mont. 348, 308 P.3d 69. We discuss additional standards of review in the context of each issue. 4 DISCUSSION ¶9 1. Was Krenning denied his right to a speedy trial? ¶10 Krenning’s trial occurred nine days past the end of the six-month period allowed for trial of a misdemeanor offense under § 46-13-401(2), MCA. The Justice Court denied Krenning’s motion to dismiss without stating its reasoning. We review the trial court’s legal conclusions on a statutory speedy trial claim to determine whether its interpretation of the law is correct. City of Helena v. Roan, 2010 MT 29, ¶ 7, 355 Mont. 172, 226 P.3d 601. ¶11 Krenning relies on State v. Ronningen, 213 Mont. 358, 360, 691 P.2d 1348, 1349 (1984), in asserting that the statutory right to trial within six months in a misdemeanor case is absolute. That is not true. As acknowledged in Ronningen, 213 Mont. at 360, 691 P.2d at 1349, the statutory six-month limit for trial of a misdemeanor offense does not apply if the trial is postponed on the defendant’s motion or if the State demonstrates good cause to continue the trial date. See also City of Helena v. Heppner, 2015 MT 15, ¶ 12, 378 Mont. 68, 341 P.3d 640. ¶12 Absent evidence of foot-dragging by the prosecution, the unavailability of a prosecution witness constitutes valid reason for trial delay. In State v. Johnson, 2000 MT 180, ¶ 20, 300 Mont. 367, 4 P.3d 654, we characterized the unavailability of an officer on an out-of-state work assignment as “good cause” for the State’s requested continuance. See also State v. Billman, 2008 MT 326, ¶ 27, 346 Mont. 118, 194 P.3d 58 (noting that the primary officer’s unavailability because of training generally would constitute “good 5 cause” for delay, but for the fact that the State did not move for continuance until four days after the scheduled trial date); State v. Ariegwe, 2007 MT 204, ¶ 70, 338 Mont. 442, 167 P.3d 915 (citing Johnson for principle that unavailability of key prosecution witness is valid reason for delay). Although those cases analyzed the constitutional right to speedy trial, the same conclusion logically attaches to a determination of “good cause” for postponement of trial under § 46-13-401(2), MCA. Officer Huertas’s unavailability was not due to any fault of or “foot-dragging” by the State. ¶13 To be sure, a police officer could be subpoenaed to testify notwithstanding the officer’s administrative leave or absence for numerous other reasons. But in our constitutional speedy trial discussions we have not imposed an obligation on the State to subpoena an unavailable officer in every instance in order to demonstrate a valid reason for delay. We decline to impose that obligation here, where the delay—nine days—was minimal. The police department’s investigation of Huertas for his off-duty conduct was a valid reason for a brief continuance of the trial. Under these circumstances, this short delay does not compel a conclusion that the State had to subpoena Huertas while the internal investigation was pending in order to secure a trial within the six-month deadline. We conclude that the unavailability of the arresting officer was, for purposes of § 46-13- 401(2), MCA, good cause for continuing Krenning’s trial nine days beyond the six-month deadline. 6 ¶14 We conclude that Krenning was not denied a speedy trial.1 ¶15 2. Did the Justice Court deny Krenning a fair trial when it refused to allow him to cross-examine Officer Huertas about the reasons for his administrative leave? ¶16 The Justice Court ruled prior to trial that the defense could not cross-examine Officer Huertas about his administrative leave. We review this evidentiary ruling for an abuse of discretion. State v. Hicks, 2013 MT 50, ¶ 14, 369 Mont. 165, 296 P.3d 1149. A trial court abuses its discretion when it “acts arbitrarily without the employment of conscientious judgment or exceeds the bounds of reason, resulting in substantial injustice.” Hicks, ¶ 14 (citation omitted). ¶17 A party may offer evidence of a specific instance of the conduct of a witness only if the specific instance of conduct is probative of the witness’s truthfulness. See M. R. Evid. 608(b). If such evidence is probative, the court nonetheless may exclude the evidence if its prejudicial effect would outweigh the probative value. State v. Dunning, 2008 MT 427, ¶ 25, 347 Mont. 443, 198 P.3d 828. ¶18 Krenning provides no facts of record or legal arguments to support his argument that he should have been allowed to cross-examine Huertas on his administrative leave. Instead, Krenning merely attached to his brief a copy of a newspaper article that is not in the record. Krenning has failed to show that the conduct underlying Huertas’s administrative leave is probative of Huertas’s truthfulness. 1 The District Court analyzed this issue under the constitutional right to speedy trial, and concluded that the right was not violated. However, Krenning did not raise his constitutional right to speedy trial in Justice Court, where the statutory right applied. 7 ¶19 We hold that the Justice Court did not abuse its discretion when it refused to allow the defense to cross-examine Officer Huertas about his administrative leave. ¶20 3. Did the Justice Court deny Krenning a fair trial when it allowed Officer Huertas to testify as an expert on horizontal gaze nystagmus (HGN)? ¶21 Krenning contends that the State failed to give the defense adequate notice that it would present Officer Huertas as an expert witness on HGN. Without a showing of an abuse of discretion, we will not disturb a trial court’s determinations on the presentation of expert testimony. State v. DuBray, 2003 MT 255, ¶ 38, 317 Mont. 377, 77 P.3d 247. ¶22 The State argues that it notified Krenning’s defense counsel four months prior to trial of its intent to call Huertas as a trial witness and provided counsel a copy of Huertas’s police report describing Huertas’s administration of the HGN test and its results. Krenning does not deny this. ¶23 Section 46-15-322, MCA, does not obligate the State to designate which of its proposed witnesses are experts; the State is required only to disclose the names of the persons it may call as witnesses. Further, a trial court has great latitude to determine whether a police officer’s training is sufficient to allow the officer to testify as an expert on the HGN test. State v. Harris, 2008 MT 213, ¶ 10, 344 Mont. 208, 186 P.3d 1263. In this case, the State elicited Huertas’s testimony that he had completed basic training at the law enforcement academy for conducting field sobriety tests, as well as advanced training in the Advanced Roadside Impaired Driving Enforcement program, the Drug Recognition Expert (DRE) class, and a forty-hour course for DRE instructors. 8 ¶24 We conclude that Krenning was not denied a fair trial when the Justice Court allowed Officer Huertas to testify as an expert on HGN. ¶25 4. Did the Justice Court err in refusing Krenning’s proposed jury instructions on breath test refusal? ¶26 Krenning offered three jury instructions regarding an individual’s right to refuse to submit to breath testing. His third proposed instruction also stated that refusal does not prove the person was under the influence of alcohol or drugs. The Justice Court rejected the three instructions based on the State’s argument that they were inaccurate statements of law. ¶27 The court instructed the jury that a person’s refusal to submit to a breath test is admissible as evidence and may be the basis for an inference that the person was under the influence, but that the inference is rebuttable. That instruction accurately reflected the language of § 61-8-404(2), MCA. A trial court has discretion in formulating jury instructions; we will affirm if, as a whole, the instructions fully and fairly set forth the law applicable to the case. Ammondson v. Northwestern Corp., 2009 MT 331, ¶ 30, 353 Mont. 28, 220 P.3d 1. ¶28 The instructions given to Krenning’s jury do, as a whole, fully and fairly set forth the law applicable to Krenning’s refusal to take a breath test. We hold that the Justice Court did not err in refusing Krenning’s proposed instructions. ¶29 Affirmed. /S/ BETH BAKER 9 We concur: /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT /S/ JIM RICE Justice James Jeremiah Shea, dissenting. ¶30 Although I agree with the Court’s resolution of Issues 2, 3, and 4, I would not reach those issues in this case because Krenning was denied his statutory right to a speedy trial and this case should have been dismissed on those grounds. I therefore dissent as to the Court’s resolution of Issue 1. ¶31 The Court concludes “the unavailability of the arresting officer was, for purposes of § 46-13-401(2), MCA, good cause for continuing Krenning’s trial.” Opinion, ¶ 13. This forms the basis for the Court’s holding that “Krenning was not denied a speedy trial.” Opinion, ¶ 14. At the outset, therefore, it is necessary to dispense with the fiction that Huertas was, in any real sense, “unavailable” to testify at trial. ¶32 The State contended that Huertas was “unavailable to testify because he was on paid administrative leave.” Opinion, ¶ 4. In other words, the State argued, and this Court agrees, that a public employee who is drawing a paycheck, while not working for that paycheck, is “unavailable” to perform one of the required functions of the job for which he is drawing the paycheck. In reality, Huertas was likely the most available law enforcement officer in Yellowstone County during the time of his paid administrative leave because, unlike the officers who were not on paid administrative leave, it was not necessary to call Huertas away from any other law enforcement duties in order to testify. 10 ¶33 The State bears the burden to explain pretrial delays. State v. Ariegwe, 2007 MT 204, ¶ 64, 338 Mont. 442, 167 P.3d 815. Whether good cause exists for pretrial delay “will necessarily depend upon the totality of the facts and circumstances of a particular case.” City of Helena v. Roan, 2010 MT 29, ¶ 13, 355 Mont. 172, 226 P.3d 601. In this case, the Justice Court denied Krenning’s motion to dismiss without stating its reasoning. Opinion, ¶ 10. Therefore, there was no meaningful analysis of the totality of the facts and circumstances purportedly necessitating the delays and whether the State bore its burden to explain the delays. Likewise, this Court does not assess the totality of the facts and circumstances of this case in determining whether there was good cause for delay, nor whether the State bore its burden of explaining the pretrial delays. Instead, the Court simply accepts as an article of faith that “paid administrative leave” equals “unavailability.” Opinion, ¶ 4. From this assumption, the Court proceeds with its good cause determination. ¶34 In its review of the Justice Court’s decision, the District Court did consider the totality of the facts and circumstances of this case and determined—contrary to this Court’s assumption—that Huertas was not, in fact, unavailable to testify as the State argued. Rather, the District Court concluded that Huertas “was forbidden from testifying by his commanding officer.” The District Court then concluded that this was not good cause for delay, because it determined that “an officer’s supervisor certainly has no authority to tell a court whether the officer can testify.” The Court does not acknowledge the District Court’s conclusions, nor discuss the facts and circumstances that led the District Court to conclude there was not good cause for trial delay because “an officer’s 11 supervisor certainly has no authority to tell a court whether the officer can testify.” By holding to the contrary on this point, though, the implication is that this Court believes that an officer’s supervisor does have the authority to tell a court whether the officer will testify. So to be clear for purposes of future speedy trial analyses, the law in Montana is now: (1) an officer’s supervisor has the authority to tell a court whether the officer will be allowed to testify; (2) without any substantive inquiry into the facts and circumstances of the officer’s purported unavailability, the State meets its burden of explaining pretrial delay by doing nothing more than stating that the officer has been forbidden from testifying; and (3) the Court will consider this to be good cause for delay. ¶35 The Court acknowledges that Huertas could have been subpoenaed to testify, notwithstanding being on paid administrative leave. Opinion, ¶ 13. This acknowledgement, in itself, belies the notion that Huertas was, in fact, “unavailable” to testify. If Huertas was available to testify by subpoena, then he was available to testify— period. Yet the Court goes on to make the incongruous observation, “we have not imposed an obligation on the State to subpoena an unavailable officer in every instance in order to demonstrate a valid reason for delay.” Opinion, ¶ 13. Huertas is an agent of the State. Huertas was available to testify but was forbidden from testifying by another agent of the State because of administrative reasons that had nothing to do with Krenning or his case. The Court is holding, therefore, that it will not impose an obligation on the State to require one of its own agents to testify if another one of its own agents forbids it. So the Court’s holding in this case could best be summarized as: It is a valid reason to delay a trial if the State refuses to allow one of its officers to testify. 12 ¶36 The Court cites several cases for the proposition that “the unavailability of a prosecution witness constitutes valid reason for trial delay.” Opinion, ¶ 12. The distinction between this case and the cases the Court cites is that in those cases there was a determination that the witnesses were, in fact, unavailable after the court considered the totality of the facts and circumstances of each particular case. 1 In this case, there was no such consideration, either by the Justice Court or this Court. The one court that did consider the totality of the facts and circumstances of this case was the District Court, which concluded that Huertas was not unavailable. ¶37 Beyond the faulty factual premise upon which the Court’s holding is based, I am equally concerned that the Court reaches its result by incorporating a new element into the statutory speedy trial analysis that is inconsistent with the plain wording of the statute. The Court holds that it will not impose upon the State an obligation to require an officer to testify “where the delay—nine days [beyond the six-month deadline]—was minimal.” Opinion, ¶ 13. The Court continues that “this short delay does not compel a conclusion that the State had to subpoena Huertas while the internal investigation was pending in order to secure a trial within the six-month deadline.” Opinion, ¶ 13. The Court concludes then that there was “good cause for continuing Krenning’s trial nine days beyond the six-month deadline.” Opinion, ¶ 13. By focusing on what is otherwise an irrelevant fact, the Court appears to hold that part of the good cause analysis under 1 It also bears noting that the cases the Court cites are factually distinguishable. In Johnson, the State’s chief witness was a detective who was out of state interviewing witnesses in a federal case, and in Billman, the officer had been called away for military training. 13 § 46-13-401(2), MCA, is how far beyond the six month deadline the trial is delayed. This reads something into the statute that is not there. ¶38 Section 46-13-401(2), MCA, provides: After the entry of a plea upon a misdemeanor charge, the court, unless good cause to the contrary is shown, shall order the prosecution to be dismissed, with prejudice, if a defendant whose trial has not been postponed upon the defendant’s motion is not brought to trial within 6 months. Montana’s statutory speedy-trial protections regarding misdemeanors are more strict than our constitutional analysis. State v. Case, 2013 MT 192, ¶ 6, 371 Mont. 58, 305 P.3d 812. When determining whether a statutory speedy trial right has been violated, “the sole standard [is] whether ‘good cause’ for the delay has been shown.” State v. Ronningen, 213 Mont. 358, 362, 691 P.2d 1348, 1350 (1984) (emphasis added). Although consideration of the length of delay may be a factor in a constitutional speedy trial analysis, Ariegwe, ¶ 105, it is irrelevant to a statutory speedy trial analysis. Under § 46-13-401(2), MCA, a delay that lacks good cause on its own merit is not suddenly imbued with good cause because it violates the statute only slightly. The Court’s analysis weighing this factor in favor of finding good cause for the delay in this case is both inconsistent with the plain wording of the statute and our precedent applying it. ¶39 A finding of good cause for pretrial delay necessarily depends upon the totality of the facts and circumstances of a particular case. Roan, ¶ 13. The facts and circumstances of this particular case are that an agent of the State was available to testify, he was forbidden from testifying by another agent of the State, and the State made no effort to make its agent available to testify within the statutory time period. Krenning’s statutory 14 right to a speedy trial was violated and his case should have been dismissed on those grounds. I dissent. /S/ JAMES JEREMIAH SHEA

August 23, 2016

dc353933-763d-4680-af23-160f23b0e662

Kenfield v. State

2016 MT 197

DA 16-0035

Montana

Montana Supreme Court

DA 16-0035 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 197 KAL C. KENFIELD, Petitioner and Appellant, v. STATE OF MONTANA, Respondent and Appellee. APPEAL FROM: District Court of the Twelfth Judicial District, In and For the County of Liberty, Cause No. DV-12-12 Honorable Jon A. Oldenburg, Presiding Judge COUNSEL OF RECORD: For Appellant: Kal C. Kenfield (Self-Represented), Shelby, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jon Bennion, Deputy Attorney General, Helena, Montana Hugh B. Brown, Liberty County Attorney, Chester, Montana Submitted on Briefs: June 15, 2016 Decided: August 16, 2016 Filed: __________________________________________ Clerk 08/16/2016 Case Number: DA 16-0035 2 Justice Michael E Wheat delivered the Opinion of the Court. ¶1 Kal Kenfield appeals the order of the Montana Twelfth Judicial District, Liberty County, dismissing his third petition for postconviction relief as untimely, and for the failure to meet his burden under the Montana postconviction relief statutes. We affirm. ISSUES ¶2 Kenfield raises several issues on appeal, which we restate as follows: 1. Whether the District Court erred by dismissing Kenfield’s newly discovered evidence claim. 2. Whether the criminal charging process used for Kenfield was consistent with the 1972 Montana Constitution and Montana statutes. FACTUAL AND PROCEDURAL BACKGROUND ¶3 In September 2008, a jury convicted Kenfield of one count of attempted deliberate homicide for engaging in a drive-by shooting at the Liberty County Sheriff's Office in Chester, Montana. The incident involved shots that were fired in the direction of the sheriff’s dispatcher seated at her desk. Additionally, a jury convicted Kenfield of three counts of felony criminal mischief and six counts of misdemeanor criminal mischief for shooting at and damaging nine businesses in Chester. ¶4 Following his convictions, Kenfield filed a petition for postconviction relief alleging ineffective assistance of counsel (IAC) by his trial counsel. In the petition, Kenfield asserted numerous instances of his trial counsel’s shortcomings, including alleged failures regarding the analysis of the crime scene. The IAC claim in Kenfield’s original petition centered around his trial counsel’s decision to challenge the State’s expert and his analysis of the bullet-ridden crime scene on cross examination rather than 3 use his own investigator or perform tests for direct examination. Kenfield also challenged his counsel’s decision not to use the defense’s expert analysis of surveillance video of the crime scene and only cross-examine the State’s expert on the video. The District Court held a hearing on Kenfield’s petition and issued a detailed order denying Kenfield relief. In the order, the District Court concluded that Kenfield’s defense counsel did not render IAC. The court determined that counsel provided an adequate defense and chose to limit the defense’s expert analysis in part because his expert would not look as qualified as the State’s. The court ultimately concluded that defense counsel’s decisions were strategic, after hearing the State’s expert and considering the evidence in the record. Kenfield appealed the decision and we affirmed the District Court on appeal. State v. Kenfield, 2011 MT 150N, 2011 Mont. LEXIS 187 (Kenfield I). Kenfield later filed a second petition for postconviction relief, alleging IAC based upon his trial counsel’s suspension from the practice of law, which was unrelated to Kenfield’s case. This Court again affirmed the District Court’s dismissal of his second petition. Kenfield v. State, 2014 MT 172N, 2014 Mont. LEXIS 401 (Kenfield II). ¶5 Kenfield filed a third petition for postconviction relief on November 4, 2015. Prior to filing the third petition, Kenfield commissioned and paid for a “new” analysis of the crime scene, which he now claims qualifies as newly discovered evidence. Skylark Technologies, the same business that analyzed Kenfield’s trial evidence, conducted a reconstruction of the crime scene utilizing the truck Kenfield drove the morning of the shooting. Skylark analyzed three of the ten shots fired at the sheriff’s office based on the trajectory calculations originally provided by the Department of Justice’s report on the 4 incident. The Department of Justice’s report was available at trial, and was created at Kenfield’s trial counsel’s request. Kenfield argues that the new truck analysis demonstrates his actual innocence—that it was not possible that Kenfield fired the bullets from his vehicle based upon the angle of the shots. The “new” evidence also included an analysis by Skylark of the sheriff’s department’s surveillance footage and time records, which Kenfield argues further supports his theory of actual innocence. ¶6 The District Court reviewed the petition and found that Kenfield’s new independent crime scene analysis did not constitute newly discovered evidence that would allow a subsequent petition. The court reasoned that Kenfield knew about alleged problems with the State’s crime scene analysis prior to trial, or at least by the time he filed his first postconviction relief petition where he raised IAC based upon the same reasoning. Ultimately, the court determined that under § 46-21-102(2), MCA, Kenfield’s new analysis did not constitute “newly discovered evidence.” Further, the court determined that Kenfield was barred from asserting IAC claims in his third petition pursuant to § 46-21-105(2), MCA. Finally, the District Court found that Kenfield’s constitutional claim lacked merit because it was based on the 1889 Montana Constitution and that the process for filing the Information was legally sound. Under this reasoning, the District Court dismissed the petition on November 18, 2015. STANDARD OF REVIEW ¶7 We review a district court’s denial of postconviction relief to determine if the court’s findings of fact are clearly erroneous, and if its conclusions of law are correct. Stock v. State, 2014 MT 46, ¶ 9, 374 Mont. 80, 318 P.3d 1053. 5 DISCUSSION ¶8 1. Whether the District Court erred by dismissing Kenfield’s newly discovered evidence claim. ¶9 Kenfield argues in his third petition for postconviction relief that the new crime scene analysis he commissioned, seven years after the shooting, demonstrates that he received IAC when his attorney failed to conduct a reasonable investigation of the case. This petition is untimely, thus Kenfield seeks to avoid the procedural time bar set forth under the postconviction relief statutes by arguing that he has “newly discovered evidence” of actual innocence that permits review of the IAC claim. The State responds that Kenfield has filed no new relevant grounds for relief in his petition and that all of his claims have previously been raised or could reasonably have been raised on direct appeal. ¶10 Postconviction remedies are governed by specific statutes. Section 46-21-102(2), MCA, provides: A claim that alleges the existence of newly discovered evidence that, if proved and viewed in light of the evidence as a whole would establish that the petitioner did not engage in the criminal conduct for which the petitioner was convicted, may be raised in a petition filed within 1 year of the date on which the conviction becomes final or the date on which the petitioner discovers, or reasonably should have discovered, the existence of the evidence, whichever is later. (Emphasis added). Additionally, because Kenfield has filed two previous petitions for postconviction relief, § 46-21-105, MCA, applies. It provides: Amendment of petition – waiver of grounds for relief. (1) (a) All grounds for relief claimed by a petitioner under 46-21-101 must be raised in the original or amended original petition. The original petition may be amended only once. At the request of the state or on its own motion, the court shall set a deadline for the filing of an amended original 6 petition. If a hearing will be held, the deadline must be reasonably in advance of the hearing but may not be less than 30 days prior to the date of the hearing. (b) The court shall dismiss a second or subsequent petition by a person who has filed an original petition unless the second or subsequent petition raises grounds for relief that could not reasonably have been raised in the original or an amended original petition. (2) When a petitioner has been afforded the opportunity for a direct appeal of the petitioner’s conviction, grounds for relief that were or could reasonably have been raised on direct appeal may not be raised, considered, or decided in a proceeding brought under this chapter. Ineffectiveness or incompetence of counsel in proceedings on an original or an amended original petition under this part may not be raised in a second or subsequent petition under this part. (3) For purposes of this section, “grounds for relief” includes all legal and factual issues that were or could have been raised in support of the petitioner’s claim for relief. Section 46-21-105, MCA, (emphasis added). ¶11 Kenfield’s current petition is subject to dismissal under § 46-21-105(1)(b), MCA, as a second or subsequent petition, unless he raises new grounds for relief that could not have reasonably been raised in his prior two petitions. Kenfield’s first and second petitions demonstrate that he has already raised the claims he now raises in this third petition. Because Kenfield’s claims of IAC and flawed crime scene analysis were raised in the previous petitions, and his remaining claim could have been raised in the original petition, the petition must be dismissed under statute. Sections 46-21-105(1)(b), (2), MCA. ¶12 Kenfield further claims that his current petition is timely because he possesses “newly discovered evidence” of actual innocence under § 46-21-102(2), MCA. However, as the District Court correctly concluded, Kenfield clearly knew about the alleged problems with the crime scene analysis because he addressed the same issues in 7 his original petition, which was affirmed by this Court. Kenfield I, ¶¶ 5-6. Because he has previously presented the evidence, Kenfield’s “new” independent analysis of the shooting evidence is not “newly discovered evidence.” ¶13 The only “new” evidence presented by Kenfield is an eleven-page report created by Skylark that analyzes the bullet trajectories. The analysis evaluates the trajectories of three of the ten bullets fired at the sheriff’s office during the incident using Kenfield’s truck to measure the trajectories. The report does not draw out the premise of the analysis, but Kenfield advances the same argument that he made in his original petition for postconviction relief—that the Department of Justice used a truck not representative of his truck. The truck used in the original reconstruction sat lower than Kenfield’s truck; thus, Kenfield posits, because his truck sits higher there is no way the shots could have been fired from his truck. Skylark concluded that the shot positions, when traced back to Kenfield’s truck, are consistently lower than the rear window, and close to the height of the side window of the truck. Kenfield argues this is evidence of actual innocence. ¶14 Kenfield’s “newly discovered” evidence analyzes only three of the bullets fired on the evening of the incident, but fails to provide an analysis of significant evidence against Kenfield, including the seven additional shots fired at the sheriff’s office. There is no evidence of actual innocence regarding Kenfield’s convictions of the misdemeanor and felony criminal mischief charges pertaining to the other shots fired that night. Those shots include the bullets that hit and damaged several businesses in Chester, including The Roadhouse, Sugar Shack, Moodie Implement, Cenex Harvest States, Fraser Oil, Tiber Tractor, and The Grand Bar. Section 46-21-102(2), MCA, regarding newly 8 discovered evidence includes a qualifier that new evidence may be raised if “proved and viewed in light of the evidence as a whole would establish that the petitioner did not engage in the criminal conduct for which the petitioner was convicted . . . .” Given the extent of his criminal conduct and convictions in the case, we conclude that a re-analysis of three of the ten bullets fired does not overcome evidence of Kenfield’s guilt. ¶15 In addition, the new report is simply an additional analysis of the same evidence used at trial and in Kenfield’s two previously denied petitions for postconviction relief. Given the extent of the discussion of the crime scene analysis in the court record, there is no question that the bullet trajectory issue is not newly discovered. Because the evidence is not newly discovered, Kenfield’s petition does not meet the requirements set forth in § 46-21-102(2), MCA. Schlup “Gateway” Claim ¶16 Kenfield’s remaining argument is a Schlup procedural claim, where under federal law Kenfield argues that his new crime scene analysis evidence is sufficient to grant him passage around state and federal statutory time bars, otherwise known as the “Schlup gateway.” Schlup v. Delo, 513 U.S. 298, 316, 115 S. Ct. 851, 861 (1995). Kenfield seeks to use Schlup to gain review of his IAC claim through the lens of his “new” independent crime scene analysis. ¶17 “A Schlup procedural, or ‘gateway,’ innocence claim alleges that newly discovered evidence demonstrates that ‘a constitutional violation has probably resulted’ in a wrongful conviction.” State v. Beach, 2013 MT 130, ¶ 14, 370 Mont. 163, 302 P.3d 47 (quoting Schlup, 513 U.S. at 327, 115 S. Ct. at 867). A Schlup claim accompanies an 9 assertion of trial error, which in this case involves Kenfield’s IAC allegation that his counsel failed to use a proper crime scene analysis at trial. Beach, ¶ 14 (citing Schlup, 513 U.S. 315-16, 115 S. Ct. at 861). To meet the Schlup standard of proof a petitioner need only produce evidence that creates “sufficient doubt about his guilt to justify the conclusion that his [criminal sanction] would be a miscarriage of justice unless his conviction was the product of a fair trial.” Beach, ¶ 14 (citing Schlup, 513 U.S. at 316, 115 S. Ct. at 861-62) (emphasis in original). A Schlup gateway petitioner must “show that it is ‘likely’ or ‘probable’ that ‘no reasonable jury’ would find him guilty.” Beach, ¶ 16. If the Schlup petitioner makes the required showing, the petitioner passes through the “gateway” that entitles him to present his constitutional claims of trial error, despite the procedural bars that would normally prohibit such claims. Beach, ¶¶ 14, 16. In Beach, we noted that because this Court respects the finality of a verdict, the reviewing court must determine whether the petitioner has supported his innocence claim “with new reliable evidence—whether it be exculpatory scientific evidence, trustworthy eyewitness accounts, or critical physical evidence—that was not presented at trial.” Beach, ¶ 8 (citing Schlup, 513 U.S. at 324, 115 S. Ct. at 865). ¶18 The pitfall for Kenfield’s Schlup claim is that the evidence is not “new reliable evidence . . . that was not presented at trial.” Beach, ¶ 8. As we noted above, the record in this case is replete with similar evidence regarding the crime scene analysis at trial, on Kenfield’s original postconviction relief petition with accompanying IAC claim, and once again on his second petition for postconviction relief. Specifically, the evidence that Kenfield brings forward on this third petition can be boiled down to the use of one 10 different factor: Kenfield’s truck. The height of Kenfield’s truck versus the truck in the “flawed” crime scene analysis allegedly demonstrates Kenfield could not possibly have fired the shots from the truck. This is not newly discovered evidence. This same evidence was reviewed and available for Kenfield at trial and his counsel strategically chose not to use the information. ¶19 We concluded in Kenfield I that it was not IAC when Kenfield’s counsel chose to rely on the cross examination of the State’s crime scene analysis at trial rather than present an independent analysis of the data. Kenfield I, ¶ 6. We affirmed the District Court’s conclusion that Kenfield’s defense counsel made a strategic decision, among many, to hold back his expert in part to avoid the risk that the expert would not look as qualified as the State’s expert. Regardless, the evidence contained in Kenfield’s current analysis was available at trial and the “new” analysis presents nothing new. In the order dismissing Kenfield’s third petition, the District Court concluded that this issue was addressed in the original petition. We agree. We conclude that Kenfield has not presented any evidence that can be considered new or different from what was available at trial or what he has already presented in this case. Because he has failed to provide new evidence, the Schlup gateway Kenfield seeks is not open for him to pass through. Because it was previously addressed, and because the evidence that Kenfield presents is not new, we affirm the District Court’s dismissal of the petition pursuant to § 46-21-105, MCA. We also conclude that Kenfield’s IAC-related claim similarly fails because Kenfield previously raised it and the District Court properly dismissed the claim as barred under § 46-21-105(2), MCA. 11 ¶20 2. Whether the criminal charging process used for Kenfield was consistent with the 1972 Montana Constitution and Montana statutes. ¶21 Kenfield argues that the charging process used in his criminal case was unconstitutional because it violates the 1889 Montana Constitution. Petitioner fails to recognize that the State of Montana adopted and ratified a new Constitution in 1972. “Montana’s specific constitutional and statutory provisions define a district court’s jurisdiction and provide for commencing a state prosecution.” State v. Montgomery, 2015 MT 151, ¶ 9, 379 Mont. 353, 350 P.3d 77 (citing Mont. Const. art. II, § 20(1) and art. VII, § 4(1); §§ 3-5-301(1), -302(1)(a), and 46-11-101, MCA). We have also concluded that “‘[t]he district court has original jurisdiction in all criminal cases amounting to felony . . . .’” Montgomery, ¶ 9 (quoting Mont. Const. art. VII, § 4(1)). Accordingly, the District Court properly determined that Kenfield’s claims are not valid or sustainable under the Constitution or laws of the State of Montana. ¶22 Additionally, the postconviction relief statutes require that the district court dismiss a second or subsequent petition unless the petitioner raises grounds for relief that “could not reasonably have been raised in the original or an amended original petition.” Section 46-21-105(1)(b), MCA; State v Osborne, 2005 MT 264, ¶ 14, 329 Mont. 95, 124 P.3d 1085. Kenfield’s claim could reasonably have been raised in his original petition. We affirm the District Court’s dismissal of the claim as it was not an abuse of the court’s discretion. 12 CONCLUSION ¶23 The District Court made proper factual findings regarding Kenfield’s third petition for postconviction relief, and its conclusions of law are correct. Accordingly, we affirm the District Court’s dismissal of Kenfield’s petition because he failed to present any newly discovered evidence. We also affirm the District Court’s conclusion that the criminal charging process used to charge and prosecute Kenfield was consistent with the 1972 Montana Constitution and Montana statutes. /S/ MICHAEL E WHEAT We Concur: /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ PATRICIA COTTER /S/ JIM RICE

August 16, 2016

c2095cab-a353-4ef1-ac0d-67cc0616374b

State v. Killsontop

2016 MT 235N

DA 14-0756

Montana

Montana Supreme Court

DA 14-0756 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 235N STATE OF MONTANA, Plaintiff and Appellee, v. KURTIS LEE KILLSONTOP, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-14-43 Honorable Robert L. Deschamps, III, Presiding Judge COUNSEL OF RECORD: For Appellant: Paul D. Sullivan, Measure, Sampsel, Sullivan & O’Brien, P.C., Kalispell, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Micheal S. Wellenstein, Assistant Attorney General, Helena, Montana Kirsten H. Pabst, Missoula County Attorney, Missoula, Montana Submitted on Briefs: August 24, 2016 Decided: September 20, 2016 Filed: __________________________________________ Clerk 09/20/2016 Case Number: DA 14-0756 2 Chief Justice Mike McGrath delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Kurtis Killsontop appeals from his March 2014 conviction and sentence on two counts of assault with a weapon. Killsontop contends that the District Court erred in admitting testimony of one victim’s prior consistent statement. We affirm.1 ¶3 In December 2013 police officers in Missoula responded to a report of a stabbing at a residence. The officers found several highly intoxicated persons, including Killsontop and Regina Matt, who had been stabbed. Matt, Killsontop and others who had been at the residence gave varying accounts of what happened and whether Killsontop stabbed the victims. ¶4 At trial Matt testified that Killsontop stabbed her and she acknowledged that as officers escorted her out of the residence she repeatedly yelled that Killsontop had stabbed her. She testified that she did not actually see Killsontop stab her, but that someone at the hospital told her that it happened. Matt admitted that she later told officers that some “Native dudes” stabbed her, but that another person who had been at 1 The issues on appeal relate only to the assault on victim Matt. Killsontop does not attack his conviction for assaulting victim Swanson. 3 the residence coached her to say that. Killsontop gave varying accounts about what happened and ultimately claimed that both stabbings were accidents. ¶5 Detective Lang interviewed victim Matt shortly after the incident and again just prior to the trial. Lang testified, over defense objection, that Matt told him in the second interview that Killsontop stabbed her. Lang also testified that Matt told him that any different account she gave resulted from being coached by another person who had been present at the residence. ¶6 On appeal Killsontop contends, and the State agrees, that Detective Lang’s account of what Matt told him was not admissible under M. R. Evid. 801(d)(1)(B) as a prior consistent statement because the defense did not impeach Matt with allegations of subsequent fabrication, improper influence or motive. In addition, both sides agree that this was trial error, not structural error. The State, however, argues that the error was harmless and does not support reversal of the conviction. ¶7 A conviction may not be reversed unless the record shows that the error was prejudicial to the defendant. Section 46-20-701(1), MCA. A trial error may be non-prejudicial if there was other evidence admitted to prove the same facts as the tainted evidence, and if the quality of the tainted evidence was such that there was no reasonable possibility that it contributed to the conviction. State v. Van Kirk, 2001 MT 184, ¶ 44, 306 Mont. 215, 32 P.3d 735. Here there was evidence, other than Lang’s testimony about what Matt said to him, to prove that Killsontop stabbed Matt. Matt testified on direct that there was “no doubt” that Killsontop stabbed her. Witness Gillis testified that Killsontop stabbed Matt in the back and that Matt ran out of the residence screaming that she had 4 been stabbed. When police arrived Matt lunged at Killsontop and screamed that he had stabbed her. And Killsontop testified that he stabbed both victims, but by mistake. Detective Lang’s testimony that Matt said the same thing to him was not significant qualitatively. There was not a reasonable possibility that it contributed to the conviction. ¶8 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. In the opinion of the Court, this case presents a question controlled by settled law or by the clear application of applicable standards of review. ¶9 Affirmed. /S/ MIKE McGRATH We Concur: /S/ LAURIE McKINNON /S/ PATRICIA COTTER /S/ BETH BAKER /S/ JIM RICE

September 20, 2016

dae23f57-83f0-4c71-8e1c-017356917de9

State v. Allen

2016 MT 185

DA 15-0662

Montana

Montana Supreme Court

DA 15-0662 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 185 STATE OF MONTANA, Plaintiff and Appellee, v. JOSHUA JAMES ALLEN, Defendant and Appellant. APPEAL FROM: District Court of the Fourth Judicial District, In and For the County of Missoula, Cause No. DC-14-504 Honorable John W. Larson, Presiding Judge COUNSEL OF RECORD: For Appellant: Colin M. Stephens, Nicholas K. Brooke, Smith & Stephens, P.C.; Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General; Helena, Montana Kirsten Pabst, Missoula County Attorney; Missoula, Montana Submitted on Briefs: June 22, 2016 Decided: August 2, 2016 Filed: __________________________________________ Clerk 08/02/2016 Case Number: DA 15-0662 2 Justice Jim Rice delivered the Opinion of the Court. ¶1 Joshua James Allen (Allen) appeals from the denial of his motion to dismiss thirty-four of thirty-five charges of violating an order of protection by the Fourth Judicial District Court, Missoula County. We affirm. ¶2 Allen raises the following issues: 1. Did the District Court err by denying the motion to dismiss multiple charges of violating an order of protection pursuant to § 46-11-410(2), MCA? 2. Did the District Court err by denying the motion to dismiss multiple charges of violating an order of protection on double jeopardy grounds? ¶3 Because we conclude that Issue 2 was not preserved for appeal, we address Issue 1 only. PROCEDURAL AND FACTUAL BACKGROUND ¶4 On September 9th, 2014, Allen sent a series of messages by text, Facebook, and phone to his former girlfriend, B.D. B.D. had previously obtained an Order of Protection against Allen prohibiting him from contacting her. Allen sent B.D. a total of 35 individual messages in a two-hour period. B.D. alerted the police to the unwanted messages. The content of Allen’s messages ranged from obscenities, to apologies, to admissions he was drinking, to declarations of love, to indications he knew B.D. had called the police. ¶5 The State charged Allen by Information with 35 counts of violating an Order of Protection under § 45-5-626, MCA. Allen moved to dismiss 34 of the 35 counts on the grounds that the offenses were “a continuing course of conduct” rather than a series of 3 individual crimes. The District Court denied the motion. Allen then entered a plea agreement with the State. Pursuant to the plea agreement, the State dropped all charges of violating an Order of Protection and Allen instead entered a guilty plea to one count of felony stalking. In the agreement, Allen reserved his right to appeal the denial of his motion to dismiss. He appeals. STANDARD OF REVIEW ¶6 A district court’s denial of a motion to dismiss is reviewed de novo. State v. Zink, 2014 MT 48, ¶ 9, 374 Mont. 102, 319 P.3d 596 (citation omitted). DISCUSSION ¶7 1. Did the District Court err by denying the motion to dismiss multiple charges of violating an order of protection pursuant to § 46-11-410(2), MCA? ¶8 “When the same transaction may establish the commission of more than one offense, a person charged with the conduct may be prosecuted for each offense.” Section 46-11-410(1), MCA (emphasis added). “A defendant may not, however, be convicted of more than one offense if . . . the offense is defined to prohibit a continuing course of conduct and the defendant’s course of conduct was interrupted, unless the law provides that the specific periods of conduct constitute separate offenses.” Section 46-11- 410(2)(e), MCA (emphasis added). ¶9 Allen argues he could only be charged with one offense because his actions formed the same transaction and the crime of violating an order of protection is intended to prohibit a continuing course of conduct. Thus, according to Allen, § 46-11-410(2)(e), 4 MCA, quoted above, barred the State from charging him with multiple offenses for violating the order of protection. We disagree for two reasons. ¶10 First, we recently held that the statute criminalizing the violation of an order of protection—§ 45-5-626, MCA—is not “defined to prohibit a continuing course of conduct.” State v. Strong, 2015 MT 251, ¶ 19, 380 Mont. 471, 356 P.3d 1078. Therefore, § 45-5-626, MCA, does not come within the multiple conviction prohibition stated in § 46-11-410(2)(e), MCA.1 ¶11 Second, Allen fails to note the critical distinction between the two subsections of § 46-11-410, MCA, upon which this case turns. As emphasized in the quotations of the statute above, § 46-11-410(1), MCA, uses the word “prosecute[],” and, as we have explained, this provision “expressly allows a person to be charged with and prosecuted for multiple offenses arising out of the same transaction.” State v. Dixon, 2000 MT 82, ¶ 49, 299 Mont. 165, 998 P.2d 544. In contrast, § 46-11-410(2), MCA, uses the word “convict[ion],” which “prohibits the State from convicting a defendant of more than one offense” if the offense is within the purview of § 46-11-410(2), MCA. Dixon, ¶ 49 (emphasis in original). By its plain language, § 46-11-410(2), MCA, is not implicated by the State’s charging decisions. Rather, it is implicated only after a conviction is obtained, and even then, only when a defendant is convicted of multiple offenses. See 1 The State notes that, in contrast to the defendant in Strong, who pled and was sentenced to three counts, Allen pled and was sentenced to only one count under the plea agreement, but does not argue that the issues raised here have been mooted by Allen’s single conviction. Allen states in reply that, upon the denial of his motion to dismiss, he faced a “plethora of charges” that could have been sustained had he proceeded to trial and been convicted, and thus he “resolved this case through a plea agreement to one count of stalking.” 5 Dixon, ¶¶ 48-50. Thus, even if a charged offense falls within its purview, § 46-11- 410(2), MCA, provides no avenue for Allen to challenge the State’s charging decisions because it does not prohibit the State from charging a defendant with more than one offense. Dixon, ¶ 49. ¶12 Although we have previously stated “a defendant may be prosecuted for more than one offense arising from the ‘same transaction’ unless the charges are among those described in subsection (2),” Strong, ¶ 17 (quoting State v. Goodenough, 2010 MT 247, ¶ 16, 358 Mont. 219, 245 P.3d 14), the issue in both Strong and Goodenough was not whether the State could charge multiple offenses, but instead whether a defendant could be convicted of multiple offenses, making it unnecessary in those cases to make this distinction. Strong, ¶¶ 16-19; Goodenough, ¶¶ 14-18. ¶13 Allen contends that if his argument is not accepted, “the statute could be used as an unreasonable weapon” because “if the matter is simply one of prosecutorial discretion or largesse, an overly zealous prosecutor could have levied an individual charge against Allen for every character typed into the text message.” Allen raises a viable policy concern, but it is not for the judiciary to undertake review of the State’s charging decisions absent a statutory or constitutional violation. See Strong, ¶ 23 (“Charging decisions are generally within the prosecutor’s exclusive domain, and the separation of powers [doctrine] mandates judicial respect for the prosecutor’s independence.”) (internal quotations and citation omitted). By its plain language, § 46-11-410, MCA, is not violated, or even implicated, by the State’s charging decisions, and therefore provides no 6 mechanism for courts to examine those decisions. The District Court correctly denied Allen’s motion to dismiss thirty-four charges of violating an order of protection. ¶14 2. Did the District Court err when it denied the motion to dismiss multiple charges of violating an order of protection on double jeopardy grounds? ¶15 Allen made a passing reference to double jeopardy in his briefing before the District Court, but did not develop a constitutional argument. As such, Allen’s constitutional claim is not preserved for our review. See In re G.S., 2002 MT 245, ¶ 48, 312 Mont. 108, 59 P.3d 1063 (general references to constitutional provisions in the district court insufficient to preserve those issues for appeal). ¶16 Affirmed. /S/ JIM RICE We concur: /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER /S/ PATRICIA COTTER /S/ MICHAEL E WHEAT

August 2, 2016

4146873d-0035-437d-82a4-5e4d69596e90

Matter of B.J.T.H. and B.H.T. H.

2016 MT 198N

DA 15-0513

Montana

Montana Supreme Court

DA 15-0513 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 198N IN THE MATTER OF: B.J.T.H. and B.H.T.H. Youths in Need of Care. APPEAL FROM: District Court of the Third Judicial District, In and For the County of Deer Lodge, Cause Nos. DN 11-03 and DN 11-04 Honorable Ray Dayton, Presiding Judge COUNSEL OF RECORD: For Appellant: Myshell Lyday, Lyday Law, PLLC, Missoula, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Katie F. Schulz, Assistant Attorney General, Helena, Montana Karen P. Kane, Assistant Attorney General, Child Protection Unit, Missoula, Montana Submitted on Briefs: June 15, 2016 Decided: August 16, 2016 Filed: __________________________________________ Clerk 08/16/2016 2 Justice Laurie McKinnon delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(d), Montana Supreme Court Internal Operating Rules, this case is decided by memorandum opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 S.H.V.H. (Mother) appeals from an order entered by the Third Judicial District Court, Deer Lodge County, denying her Motion to Set Aside Relinquishment Due to Undue Influence.1 She argues that (1) the District Court erred when it failed to find consent was obtained by duress and fraud, and (2) that she was denied the effective assistance of counsel during the hearing on her motion. We affirm. ¶3 Mother is the birth mother of twins, B.H.T.H. and B.J.T.H., born in July of 2009. On September 12, 2012, the District Court terminated Mother’s parental rights finding that Mother had executed a knowing and voluntary relinquishment after receiving counseling. Mother failed to appeal, but subsequently filed a request for an out-of-time appeal. We granted her request and appointed counsel. In her first appeal, Mother raised the following issues: (1) Did the District Court err in denying Mother’s request to discharge her court-appointed counsel; (2) Did the District Court err in accepting Mother’s relinquishment; and (3) Did the District Court err in denying Mother’s request to modify the treatment plan and stay the termination hearing. We observed that 1 On June 15, 2016, this Court entered an order consolidating, for purposes of appeal, In the Matter of B.J.T.H., Cause No. 15-0513, and In the Matter of B.H.T.H., Cause No. 15-0514. 3 “Mother . . . argues that the District Court erred in accepting her relinquishment because her consent was obtained by duress and she was not offered the required three hours of relinquishment counseling.” In re B.J.T.H., 2013 MT 366, ¶ 11, 373 Mont. 85, 314 P.3d 911 (hereinafter, B.J.T.H. I). Mother had not raised the issue of duress in the District Court. This Court affirmed the judgment of the District Court terminating Mother’s parental rights, B.J.T.H. I, ¶¶ 17, 22, but remanded for a determination to be made on the single issue of whether Mother had received the required relinquishment counseling. We did not specifically determine whether plain-error review was appropriate to allow review of Mother’s remaining duress claims, if any. ¶4 Following remand, the District Court conducted a hearing on January 22, 2014, to determine whether the counseling received by Mother satisfied the provisions of § 42-2-409(1), (2), MCA. Mother again did not raise any claims of duress. The District Court determined that Mother had received the requisite counseling. Mother appealed, arguing that the District Court’s decision was not supported by substantial evidence and that the counselor had failed to produce a written report in compliance with the provisions of § 42-2-409(4), MCA. We again affirmed the judgment of the District Court terminating Mother’s parental rights, In re B.J.T.H., 2015 MT 6, 378 Mont. 14, 340 P.3d 557 (hereinafter B.J.T.H. II), concluding that all statutory requirements regarding counseling had been satisfied. ¶5 On February 18, 2015, Mother filed a Motion to Set Aside Relinquishment Due to Undue Influence arguing that, during a court recess at the September 5, 2012 termination hearing, she was coerced into signing the relinquishment and fraudulent allegations were 4 made to her by her family about future contact Mother would have with the children. At a hearing on June 17, 2015, the District Court began by expressing its opinion that Mother had multiple opportunities to raise the issue of undue influence by family members. The District Court opined that Mother could have asserted such a claim at the termination hearing; any time prior to the entry of the District Court’s initial judgment terminating her parental rights pursuant; on her first appeal; in a petition for rehearing before this Court; or in her second appeal. In an abundance of caution, however, and to prevent further delay of permanency, the District Court received evidence pertaining to Mother’s allegations of undue influence by family members. Following the hearing, the District Court entered a comprehensive order stating its reasons why it did not accept Mother’s fraud theory. Mother has now filed the instant appeal from the District Court’s order—her third attempt to set aside the termination of her parental rights and prevent adoption. ¶6 Regarding Mother’s allegation that family members induced her to relinquish the twins because of fraudulent promises, we cannot ignore the chronology of these proceedings and the delay in achieving permanency for the children. The events giving rise to Mother’s claim arose on September 5, 2012, when Mother signed her affidavit of relinquishment. Six days elapsed before the State’s petition to terminate was filed. Another 128 days elapsed between the time the District Court entered its order terminating parental rights and the entry of judgment. At no time did Mother make a claim of duress based upon fraudulent allegations made to her by family members. Mother’s claim of duress was for other reasons. 5 ¶7 Mother allowed the time period for filing an appeal to expire. This Court nonetheless granted her an out-of-time appeal and appointed counsel. Mother did not indicate in her motion that she had been coerced into signing the relinquishment affidavit as a result of undue influence, but instead represented that she had made significant changes in her life and was now fit to parent her children. In her first appeal, Mother’s opening brief made a claim of duress based upon the alleged deficiencies in the affidavit and was not based upon undue influence or fraud exerted upon her by family members. On remand, Mother was represented by counsel and again did not raise allegations of undue influence or fraud by family members. Mother also did not assert such a claim in her second appeal before this Court. ¶8 We are indeed cognizant that § 42-2-417(1)(a), MCA, allows a court to set aside a relinquishment based upon “clear and convincing evidence, before a decree of adoption is issued, [on the basis that] the consent was obtained by fraud or duress . . . .” (Emphasis added.) However, Mother has already raised an issue of duress and voluntariness of her relinquishment, which this Court has considered and denied. Mother merely seeks today to assert a different theory of duress and/or fraud. We will not allow such a piecemeal splitting of issues, especially given that permanency of these children has been undeniably withheld as a result of this prolonged litigation. We observe that the only reason an adoption decree has not been entered for these children is because of Mother’s several appeals. ¶9 Mother also asserts that she was denied the effective assistance of counsel during the June 17, 2015 hearing, on her motion to set aside her relinquishment. To the extent 6 we have already determined that Mother’s claims of duress were considered and denied prior to the June 17, 2015 hearing, it is unnecessary to address the effectiveness of counsel at the hearing on her motion. We observe, however, that Mother fails to cite any deficient conduct by counsel during the hearing or advance a basis upon which we could find she was prejudiced by counsel’s deficient conduct. In re C.M.C., 2009 MT 153, ¶ 31, 350 Mont. 391, 208 P.3d 809. Mother’s argument that counsel “would have been able to testify (on a limited basis) to what was [sic] transpired during the unrecorded meeting” and that it would “bolster” her testimony is based upon pure speculation. Significantly, the District Court specifically found that the testimony of family members was credible and that Mother’s was not. The District Court was correct to deny Mother’s ineffective assistance of counsel claim. ¶10 The children were removed from Mother two years after birth, and now nearly five years later, B.J.T.H. and B.H.T.H. still have not achieved permanency. Mother cannot assert a claim of duress in a split and piecemeal manner as she attempts to do. We do not favor such manner of litigation “as it creates a needless waste of judicial resources. Moreover, in the context of the welfare of the child involved, it is clearly not in [the child’s] best interest to prolong this litigation.” In re B.G.B., 183 Mont. 347, 352, 599 P.2d 375, 378 (1979). ¶11 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for memorandum opinions. The issues in this case are legal and are controlled by settled Montana law, which the District Court correctly interpreted. 7 ¶12 Affirmed. /S/ LAURIE McKINNON We Concur: /S/ MICHAEL E WHEAT /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ JIM RICE

August 16, 2016

4b9f010b-f105-425c-b495-ebb752e372b5

Folsom v. Livingston

2016 MT 238

DA 15-0499

Montana

Montana Supreme Court

DA 15-0499 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 238 DAVID W. FOLSOM and ALANA L. FOLSOM, Plaintiffs, Appellants, and Cross-Appellees, v. CITY OF LIVINGSTON, a political subdivision of the State of Montana, Defendant, Appellee, and Cross-Appellant, EAGLE’S REST, LLC, a Montana limited liability company, JOHN DOES 1-X, Defendants and Appellees. APPEAL FROM: District Court of the Sixth Judicial District, In and For the County of Park, Cause No. DV 13-25 Honorable Brenda Gilbert, Presiding Judge COUNSEL OF RECORD: For Appellants: Terry F. Schaplow, Terry F. Schaplow, P.C.; Bozeman, Montana For Appellees: Michael J. Lilly, Berg, Lilly & Tollefsen, P.C.; Bozeman, Montana (for City of Livingston) Susan B. Swimley, Attorney and Counselor at Law; Bozeman, Montana (for Eagle’s Rest LLC) Alison P. Garab, Lund Law PLLC; Bozeman, Montana (for Eagle’s Rest LLC) 09/20/2016 Case Number: DA 15-0499 2 Submitted on Briefs: July 20, 2016 Decided: September 20, 2016 Filed: __________________________________________ Clerk 3 Justice Jim Rice delivered the Opinion of the Court. ¶1 Following a jury trial, Plaintiffs/Appellants David W. and Alana L. Folsom (Folsoms) appeal from the orders of the Sixth Judicial District Court, Park County, granting motions in limine by Defendant/Appellee Eagle’s Rest, LLC (Eagle’s Rest). The Folsoms also challenge the jury instructions. On cross appeal, Defendant City of Livingston (Livingston) challenges the District Court’s awards for damages and attorney fees to the Folsoms. We affirm in part, reverse in part, and remand for further proceedings. 1. Did the District Court err by excluding expert testimony of a professional appraiser? 2. Did the District Court err in granting the motion in limine that prevented David Folsom from testifying as an expert at trial? 3. Did the District Court properly instruct the jury regarding unjust enrichment? 4. Did the District Court err by awarding negligence damages to the Folsoms in view of their election of breach of contract damages? 5. Did the District Court err in awarding attorney fees to the Folsoms? FACTUAL AND PROCEDURAL BACKGROUND ¶2 In 1990, Recreational Leasing Inc., the Folsoms’ predecessor in interest, constructed sewer and water lines and a sewer lift station outside of the City of Livingston, and transferred these utilities to Livingston pursuant to a Reimbursement Agreement (Agreement). The Agreement provided that Livingston would collect proportional reimbursement fees (referred to herein as “payback fees”) when new 4 development connected to the water and sewer lines, and pay these fees to Recreational Leasing, Inc. The Folsoms succeeded to this contractual interest. ¶3 Eagle’s Rest acquired property near Livingston in 2006 and began constructing Eagle’s Landing Condominiums. It constructed Buildings A and B, which were condominiums, and Building K, which was a clubhouse. These units were connected to the sewer and water lines covered by the Agreement. Livingston initially calculated a payback fee for the hookups, but the fee was not paid by Eagle’s Rest or collected by Livingston, and the Folsoms were not paid as provided in the Agreement. ¶4 In 2012, the Folsoms made an initial inquiry about the payback fees for the Eagle’s Landing Condominiums hookups and then filed this lawsuit. Based upon the amount of the payback fees due under the Agreement, Livingston made an offer of judgment to the Folsoms “in the amount of $25,693.70, together with costs and reasonable attorney’s fees to be determined by the Court.” The Folsoms rejected the offer, and the case proceeded against both Livingston and Eagle’s Rest, with the Folsoms claiming breach of contract, negligence, unjust enrichment, and quantum meruit. The District Court issued a Scheduling Order setting an expert disclosure deadline of July 11, 2014, and setting a deadline of October 31, 2014, for all “pretrial motions, including motions in limine and motions for summary judgment.” ¶5 Meanwhile, Livingston sought and received payment of $25,693.70 in fees from Eagle’s Rest on May 22, 2014. Livingston then delivered a check for that amount to the Folsoms. The Folsoms returned the check uncashed on July 9, 2014. 5 ¶6 Counsel for the Folsoms sent a draft of their pretrial order submissions to the counsel for the Defendants in February 2015, listing professional appraiser William Bridwell as an expert witness regarding the value of the Eagle’s Landing Condominiums, and Bridwell’s written appraisal as an exhibit. Eagle’s Rest filed a motion to exclude Bridwell’s expert testimony and his appraisal on March 2, 2015, well after the motions deadline in the scheduling order, arguing that Bridwell had not been disclosed as an expert witness and permitting him to testify would be prejudicial. After hearing arguments at the pretrial conference, the District Court issued an order excluding Bridwell and his appraisal. ¶7 The next day, the Folsoms filed a notice stating they would instead rely on David Folsom’s testimony regarding the value of the Eagle property. Eagle’s Rest filed a second motion, this one to likewise exclude David Folsom’s testimony as undisclosed expert testimony, which was also granted by the District Court. ¶8 These motions were disposed of on the eve of trial, which was conducted from March 23 to 27, 2015. The jury was instructed by the court as follows: The Court has decided some issues as a matter of law in this case. Specifically, the Court has ruled that the City of Livingston breached the parties’ Reimbursement Agreement by failing to pay Plaintiffs the sum of $25,436.40 for Buildings A and B in Eagle’s Rest at the time they were connected to the water and sewer lines on October 4, 2006. The Court has further decided that the City of Livingston cured this breach of contract in June of 2014, when it tendered the sum of $25,693.70 to the Plaintiffs. The City will be obligated, by the Court’s Order, to pay this sum to the Plaintiffs. 6 Because the payback fee issue regarding Buildings A and B was decided as a matter of law, the special verdict form asked the jury to consider the issue of a payback fee only for the clubhouse. The form asked: “Did the City of Livingston breach the Agreement with Recreational Leasing, Inc., by failing to calculate and collect a payback fee for the Eagle’s Landing clubhouse?” In answering, the jury selected “no.” In answer to questions about the Folsoms’ negligence claim, the jury first found that Livingston was 60% negligent, while the Folsoms were 40% negligent. In answer to the question, “What amount of money will reasonably compensate Plaintiffs for the injuries caused by negligence?”, the jury answered: “$17,742 which is 60% of $25,000 error plus $2[,]742 travel compensation.” Additionally, the jury specifically found that no implied contract existed between the Folsoms and Eagle’s Rest, that Eagle’s Rest did not retain a benefit conferred by the Folsoms by connecting to Livingston’s water and sewer lines, and that the Folsoms’ expectation to receive compensation from Eagle’s Rest in the matter was unreasonable. ¶9 After trial, and upon a motion from Livingston, the District Court ordered the Folsoms to make an election of remedies—either for breach of contract or for negligence. The Folsoms elected to recover under breach of contract. The District Court then entered judgment, specifying that the Folsoms recovered nothing from Eagle’s Rest, but awarding as to Livingston $25,460.40 in contract damages for Buildings A and B, $2,742 for the Folsoms’ travel expenses, and $2,571 “in damages relative to payback fees for the clubhouse, which sum is reasonably construed as damages for negligence and is not a 7 form of double damages as the clubhouse payback fee was left to the jury’s determination.” The District Court also awarded $140,980 in attorney fees to the Folsoms as the prevailing party, pursuant to the fee provision in the Agreement. The District Court awarded almost all of the attorney fees claimed by counsel for the Folsoms, minus only the billable time spent in pursuing an injunction against the Defendants. ¶10 The Folsoms appeal the District Court’s decisions in granting the motions in limine and in instructing the jury. Livingston cross-appeals the award of negligence damages to the Folsoms, and the award of attorney fees. STANDARD OF REVIEW ¶11 “A motion in limine can seek to prevent or limit the introduction of evidence at trial, and the authority to grant or deny the motion rests in the inherent power of the district court to admit or exclude evidence so as to ensure a fair trial. Where a decision on a motion in limine involves the exercise of discretion, this Court will not overturn the district court absent an abuse of discretion.” Meek v. Mont. Eighth Judicial Dist. Court, 2015 MT 130, ¶ 9, 379 Mont. 150, 349 P.3d 493 (internal citations omitted) (citing Hulse v. Dep’t of Justice, 1998 MT 108, ¶ 15, 289 Mont. 1, 961 P.2d 75; and State v. Weldele, 2003 MT 117, ¶ 41, 315 Mont. 452, 69 P.3d 1162). “We review for an abuse of discretion a district court’s rulings on the admissibility of expert testimony.” Norris v. Fritz, 2012 MT 27, ¶ 17, 364 Mont. 63, 270 P.3d 79 (citing Weber v. BNSF Ry. Co., 2011 MT 223, 362 Mont. 53, 261 P.3d 984). 8 ¶12 “We review jury instructions for an abuse of discretion to determine whether, as a whole, they fully and fairly instruct a jury on the law applicable to the case.” Ammondson v. Northwestern Corp., 2009 MT 331, ¶ 30, 353 Mont. 28, 220 P.3d 1 (citing State v. English, 2006 MT 177, 333 Mont. 23, 140 P.3d 454). “The district court maintains broad discretion when instructing the jury. The instructions must prejudicially affect the defendant’s substantial rights to constitute error.” State v. Hudson, 2005 MT 142, ¶ 10, 327 Mont. 286, 114 P.3d 210 (internal citations omitted) (citing State v. Nelson, 2001 MT 236, 307 Mont. 34, 36 P.3d 405; and State v. Goulet, 283 Mont. 38, 938 P.2d 1330 (1997)). ¶13 Livingston challenges the District Court’s award of negligence damages to the Folsoms. We review a district court’s conclusion of law for correctness. See Slater v. Cent. Plumbing & Heating Co., 1999 MT 257, ¶ 13, 297 Mont. 7, 993 P.2d 654. “This court reviews for correctness a district court’s conclusion regarding the existence of legal authority to award attorney fees. If legal authority exists, we review for an abuse of discretion a district court’s order granting or denying attorney fees.” City of Helena v. Svee, 2014 MT 311, ¶ 7, 377 Mont. 158, 339 P.3d 32 (internal citation omitted) (citing Hughes v. Ahlgren, 2011 MT 189, 361 Mont. 319, 258 P.3d 439). DISCUSSION ¶14 1. Did the District Court err by excluding expert testimony of a professional appraiser? ¶15 The Folsoms argue the District Court abused its discretion by excluding the testimony and report of appraiser Bridwell concerning the value of the Eagle’s Rest 9 property. Eagle’s Rest moved to exclude this testimony because the Folsoms had not disclosed Bridwell as an expert witness. The Folsoms argue the motions deadline had long passed and the District Court “should have denied [Eagle Rest’s] motion immediately for this reason alone.” They also argue that the District Court failed to take into account that Eagle’s Rest had ample notice of their reliance on Bridwell’s testimony and report, noting that they had listed Bridwell as a fact witness and had referenced his report in their pleadings and discovery responses. Eagle Rest responds that it became aware of the Folsoms’ intention to rely on Bridwell as an expert only when the Folsoms’ pretrial order submissions were received, and promptly sought to exclude this testimony. ¶16 A district court has “broad discretion over the admissibility of evidence and control of pretrial and trial proceedings.” Stevenson v. Felco Indus., 2009 MT 299, ¶ 32, 352 Mont. 303, 216 P.3d 763. Given the last minute identification of Bridwell as an expert, we do not fault either the timing of Eagle Rest’s motion or the District Court’s discretionary determination to take up the issue instead of dismissing it as untimely. See State v. Wedele, 2003 MT 117, ¶ 66, 315 Mont. 452, 69 P.3d 1162 (it was a matter of the District Court’s discretion to either “modify the scheduling order and accept the motions” or to “deny such motions as untimely based upon [a party’s] failure to comply with the scheduling order.”). ¶17 Further, the District Court correctly cited Superior Enters. LLC v. Mont. Power Co., 2002 MT 139, 310 Mont. 198, 49 P.3d 565, where, as here, a witness had been disclosed as a lay witness, but ended up providing expert testimony. Superior Enters., 10 ¶ 14. We reversed, concluding that because the defendant did not identify the witness as an expert in discovery disclosures, it was an abuse of discretion for the District Court to allow the expert testimony. Superior Enters., ¶ 20. We conclude the District Court did not abuse its discretion in excluding Bridwell’s expert testimony. ¶18 2. Did the District Court err in granting the motion in limine that prevented David Folsom from testifying as an expert at trial? ¶19 The District Court also granted Eagle’s Rest’s motion to exclude David Folsom’s testimony about the value of the Eagle’s Rest property because he had not previously been disclosed as an expert witness. The Folsoms argue that the District Court erroneously classified David Folsom’s testimony as expert in nature and that this Court has held that a lay person may testify as to the value of real property if she or he is familiar with the property in question, citing State v. Peterson, 134 Mont. 52, 328 P.2d 617 (1958). ¶20 Folsom’s proposed testimony about the subject property’s value included average sale prices of Eagle’s Rest condominiums and Eagle’s Rest’s net land development profit, “based on public information and the land development experience of David Folsom.” The District Court reasoned that the proposed testimony was “beyond what is presumed to be possessed by men generally[,]” and did not abuse its discretion by ruling that Folsom’s testimony was expert in nature. See Superior Enters., ¶ 14 (“[The witness’] testimony relates information which is not within common knowledge or experience of lay people and is, therefore, in the nature of expert testimony.”). Despite the fact that Folsom was essentially attempting to provide the same testimony that 11 Bridwell would have offered, he had likewise not been disclosed as an expert witness. The Folsoms argue that David Folsom’s land development experience was revealed in discovery, early in the litigation, but at that point in time, David Folsom was simply a plaintiff and a potential lay witness. As we said in Superior Enters., ¶ 19, “[f]or purposes of trial preparation, there is a big difference between knowing about a factual witness and understanding that he will be called as an expert witness by your opponent.” ¶21 As with Bridwell, the District Court did not abuse its discretion in excluding David Folsom’s expert testimony at trial. ¶22 3. Did the District Court properly instruct the jury regarding unjust enrichment? ¶23 The Folsoms argue that the unjust enrichment instruction erroneously excluded the requirement of necessary restitution in the event the jury found that Eagle’s Rest had been unjustly enriched, and erroneously stated that the plaintiff must show misconduct on the part of the defendant in order to recover for unjust enrichment. However, the jury was instructed about the basic elements of unjust enrichment (“the retention of a benefit conferred . . . in circumstances where compensation is reasonably expected”), and specifically found these basic elements had not occurred. Therefore, the jury never reached further issues involved in a claim of unjust enrichment. Reviewed as a whole, we find no reversible error in these instructions. ¶24 The Folsoms argue the instructions regarding implied contracts incorrectly included superfluous instructions regarding express contracts. The District Court instructed the jury that an agreement can be reached between two parties by their conduct 12 if it appears that the parties mutually intended to agree. However, the jury specifically found that no implied contract existed between the Folsoms and Eagle’s Rest, and therefore, any additional instructions regarding the elements of express contracts would have been unnecessary. Reviewed as a whole, we find no reversible error. ¶25 The Folsoms argue that the District Court erroneously instructed the jury that if the plaintiffs did not prove unjust enrichment, then the jury must dismiss the claim for quantum meruit damages. The Folsoms argue that they “may prove unjust enrichment in the form of ELC’s increased property value, even if they don’t prove quantum meruit.” We have previously held that quantum meruit is the measure of equitable damages in an unjust enrichment action. See Storms v. Bergsieker, 254 Mont. 130, 133, 835 P.2d 738, 740-41 (1992). The jury was instructed that “[i]f you determine that Eagle’s Rest, LLC has been unjustly enriched, you must calculate the damages based upon the evidence provided by the plaintiffs. The measure of damages for a claim of unjust enrichment is . . . quantum meruit. . . .” However, the jury found that no unjust enrichment had occurred to entitle the Folsoms to any equitable damages. It was not error for the District Court to instruct the jury not to consider the damages that would follow unjust enrichment if that claim had been not proven. We affirm the instructions given to the jury. ¶26 4. Did the District Court err by awarding negligence damages to the Folsoms in view of their election of breach of contract damages? ¶27 The question of Livingston’s failure to collect payback fees for the clubhouse as a breach of contract claim, and damages to compensate the Folsoms for Livingston’s 13 negligence, were separate questions of fact asked of the jury on the verdict form. The issue of breach of contract damages for the payback fees for Buildings A and B was never put to the jury. Instead, the District Court instructed the jury that this issue had already been decided as a matter of law. Accordingly, the verdict form asked the jury to find whether Livingston breached the Agreement by failing to collect a payback fee for the clubhouse. The jury stated “No.” However, the jury nonetheless found that Livingston was 60% negligent and that the Folsoms were entitled to 60% of the damages associated with failure to pay the payback fees for Buildings A and B ($15,000), and 60% of the claimed travel expenses ($2,742). Livingston moved the District Court to require the Folsoms to elect their remedy either under breach of contract or negligence, and the District Court did so. The Folsoms chose breach of contract. Thus, they received an award of $25,436.40 in contract damages—decided as a matter of law before trial—but also were granted $2,742 for travel expenses the jury had awarded in negligence, and $2,571 for clubhouse payback fees. On cross-appeal, Livingston argues that the District Court erred by awarding the travel expenses as negligence damages because it contradicts the District Court’s own reasoning that the Folsoms must choose one remedy or the other. In addition, Livingston argues that the District Court erred in awarding the payback fee for the clubhouse, as this award of damages had no basis whatsoever in the jury’s verdict. ¶28 In response to the election of remedy motion, the District Court initially observed that “the jury could not consider any damages for [Livingston’s] failure to pay [the Folsoms] for the connection of [Eagle Rest’s] Buildings A and B” because the jury had 14 been instructed that this breach had been cured by Livingston and that Livingston was already obligated to pay these fees. It thus concluded that a damage award for payback fees on Buildings A and B based upon breach of contract and a negligence damage award based upon the same issue would constitute a double recovery, and required the Folsoms to elect their remedy between breach of contract and negligence. It has been acknowledged that potential liability in tort may coexist with potential liability in contract, and in such a case, “an injured party has the right to elect which form of action he will pursue.” Corp. Air v. Edwards Jet Ctr. Mont. Inc., 2008 MT 283, ¶ 49, 345 Mont. 336, 190 P.3d 1111 (citing Thiel v. Taurus Drilling, 218 Mont. 201, 710 P.2d 33 (1985)). An exclusive availability of remedy is not always the case, as we have previously stated: A cause of action may sound in tort although it arises out of a breach of contract, if a defaulting party, by breaching the contract, also breaches a duty which he owes to the other party independently of the contract. . . . [A] tort arises out of a breach of contract if the party also breaches a duty which he owes to another independently of the contract, and which duty would exist even if no contract existed. Boise Cascade Corp. v. First Sec. Bank, 183 Mont. 378, 392, 600 P.2d 173, 181 (1979) (internal quotation marks and citation omitted). Here, there were not independent duties, and the District Court was well within its power to direct the Folsoms to elect one form of remedy over another for the fees on Buildings A and B, citing for additional support § 27-1-303, MCA (“A person may not recover a greater amount in damages for the breach of an obligation than the person could have gained by the full performance of the obligation on both sides unless a greater recovery is specified by statute.”). 15 ¶29 It is clear that the District Court understood the election of remedies requirement to apply only to the damages associated with the payback fees for Buildings A and B. The jury specifically awarded damages of $2,742 for “travel compensation” under negligence, which the District Court determined did not duplicate any damages Fossums had obtained by their breach of contract claim. See Renville v. Taylor, 2000 MT 217, ¶ 14, 301 Mont. 99, 7 P.3d 400 (“The function of this Court is not to agree or disagree with a jury’s verdict.”); Sandman v. Farmers Ins. Exchan., 1998 MT 286, ¶ 41, 291 Mont. 456, 969 P.2d 277 (“Moreover, in our review of jury verdicts in civil cases, we have stated . . . that we do not decide whether the verdict was correct or whether the jury made the right decision; that we will not lightly overturn the verdict of a finder of fact, especially a jury . . . .”) (citation omitted). We therefore affirm the District Court’s judgment of $2,742 in travel expenses. ¶30 However, the District Court’s decision to award the $2,571 for payback fees for the clubhouse is without basis in the jury’s verdict. In awarding this amount, the District Court stated, “[the Folsoms] are further entitled to the $2[,]571 in damages relative to payback fees for the clubhouse, which sum is reasonably construed as damages for negligence and is not a form of double damages as the clubhouse payback fee was left for the jury’s determination.” The jury did make a determination on this issue, specifically finding that Livingston had not breached the contract in regard to the clubhouse fees. Neither did the jury award these damages under negligence. There being no award of this 16 amount by the jury, the District Court contradicted the verdict and erred by granting this amount, and we reverse this award of damages. ¶31 5. Did the District Court err in awarding attorney fees to the Folsoms? ¶32 Livingston argues “the District Court abused its discretion by awarding Folsoms attorney fees incurred in prosecuting all of their tort claims.” Notably, Livingston does not dispute the District Court’s conclusion that the Folsoms were the prevailing party and were entitled to an award of reasonable attorney fees, but, rather, argues that the amount of the award—$140,980—was not reasonable. We affirm an award of attorney fees to the Folsoms, but reverse the amount of the award as unreasonable, and remand to the District Court for reconsideration. ¶33 In general, attorney fees are available only when provided for by statute or by contract. See Blue Ridge Homes, Inc. v. Thein, 2008 MT 264, ¶ 78, 345 Mont. 125, 191 P.3d 374 (“A court may award attorney fees only where a statute or contract provides for their recovery.”) (citation omitted). Fees are not generally available for tort claims. The Agreement provided for attorney fees to the prevailing party for claims arising thereunder. Further, “[alt]hough reviewed for abuse of discretion, an award of attorneys’ fees must be reasonable.” Houden v. Todd, 2014 MT 113, ¶ 37, 375 Mont. 1, 324 P.3d 1157 (citation omitted). In determining whether an award is reasonable, we have previously articulated non-exclusive guidelines for the district courts to consider. These guidelines include: “(1) the amount and character of the services rendered; (2) the labor, time and trouble involved; (3) the character and importance of the litigation in which the 17 services were rendered; (4) the amount of money or the value of the property to be affected; (5) the professional skill and experience called for; (6) the attorneys’ character and standing in their profession; and (7) the results secured by the services of the attorneys.” Plath v. Shonrock, 2003 MT 21, ¶ 36, 314 Mont. 101, 64 P.3d 984 (citation omitted). ¶34 Livingston argues that the “results secured” in this case highlight that the award of almost all of the Folsoms claimed attorney fees was unreasonable. Early in the case, Livingston made a formal offer of judgment for the breach of contract damages, in the amount of $25,693.70, “together with costs and reasonable attorney’s fees to be determined by the Court.” This offer was rejected, and the case was litigated through trial. In 2014, once Eagle’s Rest had been named a defendant in the Second Amended Complaint, Livingston delivered a check to Alana Folsom in the amount of $25,693.70. The check was returned to the city, uncashed. The Folsoms ultimately claimed over $1,000,000 in damages stemming from the breach of the Agreement, but, after trial, received a small damage award in the range of the pretrial offers. ¶35 As the District Court noted, the Folsoms’ actual recovery was “minimal in light of their demand.” After several years of litigation, the Folsoms essentially received what Livingston had offered them all along, making the “results secured” factor a significant one in the determination of reasonable attorney fees here. We conclude it was an abuse of discretion for the District Court to award essentially all of the attorney fees incurred by the Folsoms, including those associated with their tort claims, and we, therefore, reverse 18 the award. We remand for consideration of an award that would more appropriately reflect what the litigation accomplished. ¶36 Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. /S/ JIM RICE We concur: /S/ MIKE McGRATH /S/ LAURIE McKINNON /S/ MICHAEL E WHEAT /S/ JAMES JEREMIAH SHEA Justice James Jeremiah Shea, concurring. ¶37 I concur fully with the Court’s opinion. I write separately to address the Folsoms’ counsel’s baseless, and completely inappropriate, ad hominem attack on the District Court Judge who presided over this case. ¶38 The Folsoms’ counsel devotes an entire section of his opening brief before this Court to allegations that the District Court Judge essentially engaged in public malfeasance because she “was simply not going to allow the Plaintiffs the potential of a large jury verdict, and the ensuing publicity for the Court.” I will not go into the substance—or, more appropriately, lack thereof—of these allegations because, aside from the fact that the record divulges no basis for them, their lack of merit and relevancy is best illustrated by the Folsoms’ counsel’s own admission that “these actions of the Court 19 are not part of this appeal.” This then begs the question: So why make these allegations if not to gratuitously malign a member of the judiciary? ¶39 The Folsoms’ counsel’s criticism of the District Court Judge is further belied by the fact that this Court has unanimously affirmed the District Court’s rulings on all of the Folsoms’ assignments of error. Ironically the only error we have found in this case is the District Court’s award to the Folsoms of some damages to which they were not entitled, Opinion, ¶ 30, and the District Court’s award of essentially all of the Folsoms’ attorney fees, which we have concluded is incommensurate with what the Folsoms’ counsel actually accomplished with this litigation, Opinion, ¶ 35. ¶40 Eagle’s Rest points out in its brief that the Folsoms’ counsel’s attack on the District Court Judge appears to violate M. R. Prof. Conduct 8.2(a), which provides, in pertinent part: A lawyer shall not make a statement that the lawyer knows to be false or with reckless disregard as to its truth or falsity concerning the qualifications or integrity of a judge, adjudicatory officer or public legal officer . . . . Eagle’s Rest’s point may be well taken. If there is a legitimate basis for the Folsoms’ counsel’s allegations of malfeasance towards the District Court Judge in this case, I cannot find it in the record before this Court. That being noted, due process requires that we refrain from making that judgment at this juncture. This is more appropriate for consideration by the Commission on Practice. /S/ JAMES JEREMIAH SHEA

September 20, 2016

9286a7ba-8fbf-494d-b5f4-fcc968a7f48f

State v. Berg

2016 MT 211N

DA 15-0787

Montana

Montana Supreme Court

DA 15-0787 IN THE SUPREME COURT OF THE STATE OF MONTANA 2016 MT 211N STATE OF MONTANA, Respondent and Appellee, v. BRENDA D. BERG, Petitioner and Appellant. APPEAL FROM: District Court of the Thirteenth Judicial District, In and For the County of Yellowstone, Cause Nos. DC 96-44, DC 96-129, DC 96-326, DC 96-344, DC 96-517, DC 97-191 Honorable Rod Souza, Presiding Judge COUNSEL OF RECORD: For Appellant: Brenda Berg, Self-Represented, Billings, Montana For Appellee: Timothy C. Fox, Montana Attorney General, Jon Bennion, Assistant Attorney General, Helena, Montana Scott Twito, Yellowstone County Attorney, Billings, Montana Submitted on Briefs: June 29, 2016 Decided: August 23, 2016 Filed: __________________________________________ Clerk 08/23/2016 Case Number: DA 15-0787 2 Justice Patricia Cotter delivered the Opinion of the Court. ¶1 Pursuant to Section I, Paragraph 3(c), Montana Supreme Court Internal Operating Rules, this case is decided by unpublished opinion and shall not be cited and does not serve as precedent. Its case title, cause number, and disposition shall be included in this Court’s quarterly list of noncitable cases published in the Pacific Reporter and Montana Reports. ¶2 Brenda D. Berg, appearing pro se, appeals from a November 2015 order of the Thirteenth Judicial District Court, Yellowstone County, denying her Motion for Reconsideration of Restitution. We affirm. ¶3 In February of 1998, Berg was sentenced in the Thirteenth Judicial District Court, to three years with all but four months suspended for each of the crimes underlying Cause Nos. DC 96-044, DC 96-129, DC 96-326, DC 96-344, DC 96-517, and DC 97-191. The suspended time was contingent on Berg’s payment of restitution to the victims in the amount of $27,463.89. On November 13, 2014, Berg filed a Motion for Reconsideration of Restitution with Memorandum in Support arguing that the imposition of restitution was improper because the State had not filed affidavits of the victims’ losses in accordance with § 46-18-242(1)(b), MCA, and that a portion of the award was improper as it was based on dismissed or unfiled cases. ¶4 A trial court must have a statutory basis for modifying a defendant’s sentence. State v. Baker, 1999 MT 251, ¶ 14, 296 Mont. 253, 989 P.2d 335. Where a defendant fails to cite statutory authority for the sentence modification, this Court construes the motion as a petition for postconviction relief. Baker, ¶¶ 14-15. 3 ¶5 A petition for postconviction relief may be filed at any time within one year of the date on which the conviction becomes final. Section 46-21-102(1), MCA. A petition based on newly discovered evidence may be brought within one year of the date the petitioner discovers, or reasonably should have discovered, the existence of the evidence. Section 46-21-102(2), MCA. In relevant part, a conviction becomes final when the time for appeal to the Montana Supreme Court expires. Section 46-21-102(1)(a), MCA. From the time the judgment is entered, a defendant has 60 days within which to file an appeal to the Montana Supreme Court. M. R. App. P. 5(b) (1997). Further, this Court has consistently held that while a certain amount of latitude may be given to pro se litigants, it is nonetheless reasonable to expect such litigants to adhere to procedural rules. Greenup v. Russell, 2000 MT 154, ¶ 15, 300 Mont. 136, 3 P.3d 124. ¶6 Berg was convicted and sentenced in February of 1998. Roughly sixteen years passed between the time Berg’s conviction became final and the filing of the instant motion. Therefore, Berg is well outside of the timeframe allowed by § 46-21-102(1), MCA. ¶7 Further, Berg may not avail herself of the newly discovered evidence provision contained in § 46-21-102(2), MCA. Berg argues that, because the information that gave rise to this current claim was only recently discovered as a result of requests made to the district court, the information should be considered newly discovered evidence. However, the statute provides that the time in which a petition may be filed begins to run from “the date on which the petitioner discovers, or reasonably should have discovered, the existence of the evidence.” Section 46-21-102(2), MCA. As the records Berg 4 requested have been in existence since 1998, they should have reasonably been discovered years ago. ¶8 Berg’s sentence put her on notice that the restitution award was predicated in part on both dismissed cases and unfiled cases in March of 1998; therefore, she cannot now claim that the evidence is newly discovered. Because Berg may not proceed under either §§ 46-21-102(1) or -102(2), MCA, Berg’s motion, which we have construed as a petition for postconviction relief, is time barred. As such, the District Court did not err in denying Berg’s Motion for Reconsideration of Restitution. ¶9 Finally, Berg seeks consideration regarding her time served. We note that Berg originally filed a “Motion for Reconsideration of Time Served and Re-Calculation of M.W.P. for Parole” in the Thirteenth Judicial District Court, Yellowstone County. That motion was denied without prejudice by the District Court in July 2015, for failure to correctly serve the proper parties. Berg may refile that motion in the District Court and correctly serve the proper parties. Alternatively, Berg may assert her claims on writ of habeas corpus as the writ is the appropriate avenue for relief in cases involving calculation of “good time” credits. Eisenman v. State, 2000 MT 170, ¶ 13-14, 300 Mont. 322, 5 P.3d 542. ¶10 We have determined to decide this case pursuant to Section I, Paragraph 3(c) of our Internal Operating Rules, which provides for unpublished opinions. In the opinion of this Court, this case presents a question controlled by settled law. 5 ¶11 Affirmed. /S/ PATRICIA COTTER We Concur: /S/ JIM RICE /S/ LAURIE McKINNON /S/ JAMES JEREMIAH SHEA /S/ BETH BAKER

August 23, 2016